If you’re thinking of starting a business in the Boston Metro, you have two obvious choices; building an independent business from scratch, or buying a franchise. Both present challenges and opportunities, and each require capital to get started. Here are some tips to help you make your choice!
Franchises are not fail-safe. Having a good business location is just as important for a franchise as it is an independent business. Name recognition alone rarely induces customers to go out of their way for a product or service.
However, franchises can be a better option for entrepreneurs who may have less business experience, or who aren’t as familiar with the industry they wish to invest in. Franchises are turn-key operations, with established operational procedures and business systems.
Here are other points about franchising:
Business support. This can include corporate marketing, training, ongoing coaching, and employee hiring systems. You may have a network of other franchise owners and managers for in-the-trenches help.
Profitability. While not guaranteed, franchises offer reasonable projections of gross profit margins. In return for business support and use of naming rights, franchisees pay a royalty fee. The royalty fee eats into your profits, but this expense is also predictable.
Brand recognition. Selling a product already known and trusted by consumers, is easier than coaxing people to try your unknown brand. This helps you reach profitability sooner.
Lower costs for inventory and equipment. As part of a large buying pool, your inventory and equipment costs can be lower than those of an independent business. There are exceptions, however. Some franchise systems are infamous for having oddly expensive requirements like colorful, branded napkins and straw wrappers.
Look carefully into all operating costs, including required purchases for ongoing inventory needs. These costs can increase over time!
High initial investment. You wouldn’t believe what it costs to open a cinnamon-roll franchise under a certain brand. Unless you’re already wealthy, some franchise costs are beyond the reach of first-time business owners. Start-up capital requirements vary widely; do your homework!
Limited freedoms. As a franchise owner, you are given a path to follow, and you are required to follow that path, with very little, if any, wiggle room.
As an independent business owner, you can call your own shots, make decisions about marketing and pricing that reflect your local area, and be creative with your business plans and operational procedures.
In summary, look at all of your business options in the Boston Metro! Being independent may carry higher risks, but the barrier to entry can be much lower. Weigh your personal strengths and resources in the decision.
Having a strategic business location aids your success! When you are ready to begin, relocate or expand your business, team up with an experienced commercial real estate broker at Jay Nuss Realty Group, LLC! Whether you are thinking of buying or leasing Boston Metro commercial real estate, we can help you find the ideal property. Please contact us today for expert guidance!