What Are The Pros & Cons Of Buying An Independent Business Vs. Buying a Franchise?
Professional Business Broker’s Guide To Help You Decide Whether To Buy a Local Business Or a Franchise In Arizona
You may have dreamed of owning your own business for a long time. You love the idea of being your own boss, and you want the financial freedom that being a business owner can offer. You may have kicked around a few ideas for businesses that you could start, or you may be at a total loss for what kind of business you’d like to run. You could buy an independent business that has been locally successful and help it to grow, or you could open a franchise and continue with an idea that has already been established and proven to be successful in a more widespread way.
So, what do you choose? How do you begin with your Chandler business broker if you don’t have a clear starting point? Here are some pros and cons to help you decide whether it would be best to buy an independent business or a franchise:
Room For Business Growth
Whenever you buy any business, you are buying an established brand. So, you know that the business you are buying already has a track record of success. But what can you expect from the business in the future? Will it continue at the level it is now, or will it get better? Ideally, when you buy a business, you want it to have a lot of room to grow.
Franchises are unlikely to grow exponentially. That’s not to say that they can’t, but they are typically pretty stable when it comes to performance. That’s why people like buying them. They are often a “safe” bet, if there can ever actually be one in business. However, if you buy an independent business, there is potential for you to grow that brand. You can expand offerings, open new locations, or just improve the brand reputation. You will typically have more room for growth with an independent business.
A Flexible Company Allows You To Make Changes
Franchises spring from successful businesses that have spent years figuring out what works and what doesn’t. As a result, those businesses aren’t too keen to let their franchisees try to reinvent the wheel. You will have to follow pretty strict protocols about how you operate the business. If you get any creative ideas about changing the product, adding a new service, overhauling the look of the building or any of the online branding, you can forget about it. You aren’t going to have the flexibility to make these changes.
You will have that flexibility with an independent business. After you close the sale, the business is yours to do with as you like. You can change anything you want. That means you can also do things that could improve the business and increase your profits. You might even grow the business to the point that you are the one offering the franchise.
A Risky Business Lowers Your Probability Of Success
A lot of people buy franchises because they are relatively low risk. You get plenty of data about the historic success of the business and the return you can expect to get from it. You also get the backing of a larger corporation that has a vested interest in protecting its brand – which means that it doesn’t want to see you fail. Plus, sometimes you get all this for much less than what it would cost to start a business yourself.
Taking on an independent business typically comes with a lot more risk. The business may already have some history, but it doesn’t come with the backing of a major brand that will provide support and reputation management. All the decisions you make will have a major impact on the brand and its ultimate success or failure.
Buying a business is a major decision. There is ultimately no right or wrong answer about whether an independent business or a franchise is the right choice. However, you should think through all the issues carefully to ensure that you are making the best choice for you. Then work with the right Mesa business broker to find the right opportunity at the right time.
Contact a Business Broker To Buy Or Sell Your Company In Scottsdale
Phil Reese is an experienced Arizona business broker who has been helping people buy and sell businesses since 2001. He is a member of the International Business Brokers Association, the Arizona Business Brokers Association and is a Certified Business Intermediary (CBI). Contact his office in Scottsdale or Phoenix today to discuss the process of buying or selling a business.
Written By: Phil Reese
Phil Reese – Arizona Business Broker
7077 E. Marilyn Road, Bldg. 4 Suite 200
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