Franchise Or Traditional Business – Which One is the Best Investment Opportunity?

What are the pros and cons of buying a franchise versus a traditional brick and mortar business versus some other business opportunity. A traditional franchise is a great way to buy brand recognition. The main reason to buy a franchise is because of the systems that are already in place and the brand recognition. For the privilege of having a known brand and a proven system you have to pay a lot. Franchises are not cheap. A fast food franchise could run easily $250,000. This would require a down payment and a loan. The down payment could run 10 to 20% and you still have to qualify for the loan. Some franchisors provide financing. Typically the cost of the real estate where the store is going to be located is extra. Once you have bought your franchise and are making payments to the franchisor and payments for the real estate you still have to make royalty payments on product sold. This may include a percentage for the products purchased from your franchise supplier and a royalty on the product sold. The up side here is the fact that you have a known brand and as long as you have good advertising in place and a good location you should be making sales. Of course your sales should continue to increase if you have planned well and eventually you will be in a profit making position. This typically takes a few years.
Buying a mom and pop, brick and mortar business may cost you less money, however you will have to do a lot of research to know if you are making a good deal. The real estate itself must be researched as well Indoor Winter Garden Kit as the type of business and past sales data. Most of this will have to be done on your own. When buying a franchise a lot of this is done for you. After all, the franchisor does want you to succeed.
There are many types of business opportunities that do not require a massive investment for the right to sell and distribute a product. Many of these can be done from home. Some require that you handle inventory and some ship the product direct. A direct sales business is a great way to start your own business and have your company handle all the inventory, shipping and handling. Usually all the advertising cost for your product must be done by you. The company maybe willing to help and may have a system in place, yet you will have to pay for it. The compensation plan varies as much as the type of products. Things I Wish I Knew When I Started Gardening Some pay you a set amount for each product sold, some pay a percentage based on your rank in the company, some pay you on product sold by someone else on your team, etc. With many business opportunities (MLMs) you never get to earn all of the profit on a product. Some of it always goes to someone else. Understanding the compensation plan and how it works is critical prior to investing. Just because the plan may sound real simple it does not mean you are retaining all of your commissions. Or maybe it is real simple except you are going to have to sell a lot of product to make a little money.
So with so many variations of businesses to consider which may be right for you. Certainly doing your due diligence and speaking to experts in the type of business you are considering is a good start. I am here to assist you so feel free to ask me your questions. I have a great blog as well as a web site in which you can contact me.

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