Home-Based Business Vs Franchise Business – A Side-By-Side Comparison For Success

There are many popular franchise business opportunities that are available to those looking to run their own business. They provide a viable, proven system to produce income with a product that is highly-advertised and purchased by the vast majority of society.

But one question you want to ask yourself is this: At what cost does success come with a franchise business opportunity?

The two biggest models available to a brand-new entrepreneur are franchises and network marketing opportunities. This article weighs the pros and cons of starting a franchise business and a home-based network marketing business and will help you decide which model works best for you.

1. Cost – This is a very important element and should be considered very early in your search for a new business, regardless of franchise or home-based. Most franchises cost thousands of dollars just to invest. Once you’ve invested, you have lots of overhead to consider, such as personnel, health benefits, inventory, marketing, advertising, and more. This will inevitably lead you to reach into your pockets for more, thus putting you further in the red before you even think about opening your doors.

With network marketing, your start-up costs are significantly lower and relative to the company you join. Your overhead is also lower, as you don’t need to worry about hiring personnel, paying for health benefits, and in some cases, house boxes of inventory. If you decide this is a more viable route for your start-up budget, you want to be sure you expose yourself to the knowledge needed to market your business and product. Remember that your product won’t promote itself, and neither will your opportunity. So be sure your company provides marketing training. If they don’t, reserve a specific amount of your start-up capital for marketing courses and training.

2. Time – This is extremely important to evaluate because most entrepreneurs are looking to leverage time in their favor by starting their own business. If you value your time, this is as much of a cost as your initial investment. If you’ve left ‘Corporate America’ schedule behind and are looking for a way to earn a steady stream of income on your own watch, a franchise business opportunity may not be the best direction to go. Until you get your business off the ground and have the revenue available to hire a staff, you are working from the second you open the door to the second you close, every single day. This can create more time imprisonment than an actual “9 to 5″ job.

When you pit this against a network marketing business on the basis of time, network marketing will win every time. By starting a home-based network marketing business, you are still a business owner, but you are not confined to a corporate schedule that tells you when you have to be open. If you need to take an afternoon off, you have that luxury available to you. The important thing to keep in mind is you are 100% accountable for all of your output. You want to be sure you’re putting in the necessary effort to ensure your business survives and thrives. The good news is you are able to do this at your convenience. And if you don’t want to quit your day job right away, you can choose to work your business part-time.

3. Length of time to turn a profit – In a franchise business, it can take anywhere from 2-5 years to recoup all of your initial investment. Also, keep your ‘time’ investment in mind as well. The amount of hours you spend trying to get out of the red can weigh tremendously on your psyche. Before making the investment, you want to make sure you are capable of going a lengthy amount of time before you see positive fiscal results.

Contrarily, a network marketing business gives you the opportunity to turn a profit in a much quicker fashion. This is possible simply because your initial investment for starting your business is drastically lower. The thousands and thousands spent to start a franchise is normally reduced to hundreds when it comes to a home-based business. Most network marketing companies charge a small start-up fee and a monthly charge that provides the business owner with back-office assistance and several other key factors to running their business. If you market your business properly right from the start, you set yourself up for a much faster return on investment by taking the network marketing path.

To conclude, no one model is the right way to go. Both franchise business and network marketing opportunities have proven to be successful over the years. It boils down to which level of investment you’re willing to make, how much time you’re willing to commit to your business’s success, and how long you’re willing to wait for a return on your investment. Regardless of which direction you decide to go, the same basic principle applies: Expect to get out your business what you put into it.

Is Business Ownership Right For You?

The reality of the current downturn in the economy is that many companies will need to restructure to create the private sector jobs President Obama is talking about. At the time of writing this article there is 7.2% unemployment or the good news, 92.8% full employment. That’s good news if you’re one of the 92.8% but bad news if you’re one of the 7.2%. And these are national figures so if you live in some States in the US the unemployment rate is higher.

Regardless of your local unemployment statistics, if you have lost your job or are concerned your company may downsize but you need to make some money to put a roof over your head, feed the family, buy the gas to get around plus all the other things you need to do in life, perhaps you are thinking it’s time to get off the employment rollercoaster. This means putting yourself in control so you can work the hours you want, work in an industry you want to be part of and ultimately be in control of your own destiny. If that makes sense, what are your options?

The three options of business ownership

If you think business ownership may be an option for you, there are basically three choices. Option one is to start your own business. This means you have to come up with a creative new idea, test it to make sure there is a commercial market for your idea, and then once you get enough feedback, build and execute a business plan. This plan not only needs to ensure you make enough money to pay the costs of running your business and personal needs but also cover any debt you’ve incurred while you created, tested and deployed your idea.

Option two is to buy an existing business that has any of the following three goals. Your first goal could be to find a business that’s not doing well, determine the reason it is underperforming and then put in place the changes to have the business head in a positive direction. Your second goal could be to look for a business that’s holding its own and simply take the place of the existing owner with the expectation of enjoying the life style of this business owner. The third goal could be to look for a business that’s growing well but bring your skill set, new energy and capital and either continue the growth of the business or considerably add to it.

The third and final option is to buy the rights to a new franchise. Just so I am clear, you could always buy an existing franchise and continue its current ownership but this is really a variation of option two above. New franchises are appearing on the market all the time in a diverse range of industries and formats. At last count I had franchises in 84 different industries such as accounting, automotive, animals/pets, beauty care, building materials, children’s education, clothing, transportation, travel, upholstery and wholesale etc while the formats range from Business to Business (B2B), Retail, Home based etc to name a few. The option of buying a new franchise tends to appeal to those who have worked in Corporate America but decide to look elsewhere for their future. The best advantage of a franchise for a new business owner is that it brings a system or business model that has had the wrinkles ironed out; similar to the model used in Corporate America. The franchisor has proven the business model, fine tuned the systems, built the training for the franchisee, knows what accounting systems to use and has these up and running and is looking to re-create these business models across the US and often into Canada and Mexico, and around the world.

Understanding risk
If you’re deciding whether business ownership is right for you, one of your most important evaluations will concern risk. We see this everyday with how we handle our money. We know we need an account to pay our bills and often use a checking/savings account combination. The money is very safe (backed by the US Government) and available whenever we need it. Because this money is needed for virtually immediate use our risk tolerance is very low. With that need taken care of our next decision involves putting aside excess capital that hopefully stays ahead of inflation but is only tied up for the short term of say 6 months to 2 years. For this option we look to CDs, Bonds or Treasuries which we also know are safe and meet our low risk tolerance.

We also understand the importance of another form of investing and that’s regularly putting retirement money into a 401K plan or similar which is money invested for the long term of 10 years or more. We know this money is at a higher risk as it fluctuates in value on a daily basis with movements in the stock exchange. For this higher risk we require a higher return on investment. With those needs addressed, and if we have any additional spare money, we then look at other longer term investing options which includes buying shares in the stock market, buying corporate bonds, playing the foreign currency markets, trading commodities or some other form of investment we know and handle ourselves or pay a financial advisor to manage for us.

The bottom line is that you have many options with the final option you choose to make based on your risk tolerance. When deciding whether to start your own business, buy an existing business or buy the rights to a franchise, the level of risk will be one of the major decisions you need to evaluate. Your comfort with which option to choose will also depend on a number of variables. These include how much money you have to invest, the skill set the business requires and how closely this matches yours. Another major factor includes your financial status. Do you need to borrow, what is the condition of your credit score and, is your credit report acceptable to a lender? It may also ensure your background doesn’t preclude you from business ownership due to a criminal record or other circumstance.

What’s the next step?
If you’ve read the above and think business ownership is right for you or you would like to know more, your next steps are to become more educated so when you get to make that final decision whether you will or will not go into business ownership, you have as much information as possible. For this reason I have written three guides to help those considering business ownership. These guides are respectively called – Successfully Start Your Business, Successfully Buy Your Business and Successfully Buy Your Franchise: Expert Advice from a Business Broker. I’ve personally been in business ownership for 25 + years having owned and operated 5 businesses; two in my native Australia and now three in California. I still remember the fear and sleepless nights deciding whether to buy my first business and relocate to a new city with my 6 months pregnant wife. But as I look back, business ownership provides a wonderful set of experiences and skills I would never have known if I didn’t recognize and manage the risk that comes with business ownership. There is no question; business ownership is not for everybody. But business ownership is a skill to acquire and once it’s acquired brings about opportunities those working a job never see. Plus one of the rewards to it all is that it puts you in control so when you go through recessions you have the capacity to succeed.

Importance of your Buyer Profile
Before you start looking at business ownership, know your Buyer Profile so it reduces your chance of failure or giving up because you are burnt out from the process. For most new business owners, naturally enough their goal is to find the perfect business. This makes sense but it only makes sense if you know what you want but I also think “perfect” is too high a standard. Businesses are dynamic and constantly changing. This is because it is primarily dealing with people, whether they are owners, family members, customers, employees, lenders, landlords or government agencies. Look for what you want, but make sure your criteria is not too high.

So how do you know what business to look for? The answer to this question is by building and creating your personal Buyer Profile. Most buyers are not sure where to start the process. From my experience from buying and looking at many businesses and working with a large number of new or potential business owners the first step is to start with yourself. Most buyers don’t do it because they don’t know what they are looking for and expect it will reveal itself to them as they start their search process. If this is what you choose to do it will increase your chances of failure as there is no such thing as the perfect business plus each buyers profile is unique. It is unique because there are so many variables. The variables include levels of education, amount of downpayment to buy a business, credit scores, credit report, business and life experiences, management experience, family support, personal situation such as being single or married with 4 children to support and most important of all, the location where you live and the opportunities available. If you come to your decision to look at business ownership and you are fresh out of college your frame of reference is really the subjects you studied in college and your life and business experiences. If you’re a 40 year old executive who has worked in Corporate America in the technology field for the last 10 years as a sales manager, but in your earlier years worked in retail books and the travel industry, you have much more diversity to pull from.

Your Buyer Profile is a critical starting point for you. I normally spend about two hours with each client before introducing any business opportunities to them as I want to get a basic level of understanding of the industries of interest to them and their preferred format such as whether they like retail, Business to Business (B2B), Food, Automotive or, Children’s services etc plus an extensive range of other questions. If the buyer knows what they do and don’t like it allows them to focus and thereby greatly increase their chances of finding the business they want.

The rewards to business ownership for each person are unique and real. If you think business ownership right now with the economy in recession is not a good option, I would disagree. The economy is constantly changing and looking for new ways to invest capital and provide a return on investment. Some areas of the economy are about to explode such as health care, businesses in energy efficiency, the “green” industry and, new technology innovations to name a few. It will take time to research, create and execute a plan and then explore any other options available to you. Making the decision to take the risk is the hardest part. Once that is done, the rest takes care of itself. If you think business ownership is part of your future, learn as much as you can, accept it comes with risk and get on with it as the rest will be up to you. Whether you stay in your current job, find a different job because you aren’t enjoying what you are doing or move into business ownership, at the end of the day it’s still all up to you and how you manage the risks that come from each decision you make.

Could a Lawn Care Business Be Right For You?

Providing a lawn care service in your local area can offer you an opportunity to become financially successful through self-employment. Would you like to be your own employer? Do you want to run your own business and on your own terms?

Choose the right neighborhood and you’ll find that lawn care services are always in demand. In fact, there are many advantages to becoming involved in this type of business. They range from independence to low start up costs to immediate positive cash flow.

Let’s say you live in the city of Mississauga and you want to offer a basic grass cutting service or regular lawn treatments to control weeds and grubs. You could get the word out quickly just by going door to door and leaving a simple business flyer that announces your new Mississauga lawn care business. Describe what your lawn services company specializes in and offer a limited time discount for the first 10 customers.

10 Advantages of a Local Lawn Care Business

1. There is an easy entry to the trade. A student with a lawnmower can be a lawn care provider. So, too, is someone with a stenciled cube van or pickup truck and several employees.
2. You are your own boss.
3. The hours are flexible. Within reason, you can set your own hours.
4. You can work out of your own home, cutting down on costs associated with a more complex business start-up.
5. It is outdoor work.
6. If you offer top quality service you will always have plenty of work.
7. There is room to grow.
8. To start up your business requires little financial outlay or investment.
9. Usually, you do not have to have a license.
10. Any specific or specialist knowledge you may require for a job, you can learn.

5 Disadvantages of a Local Lawn Care Business

1. The workdays can be long and very weather dependent.
2. The winter months are slack. Little work is required up to and following the advent of the cold season when grass becomes dormant.
3. The work is heavy. It requires lifting, lugging and hauling machinery of various types.
4. Depending upon what type of lawn care services you offer, you may be handling toxic substances.
5. You may be working with potentially dangerous machinery.

You need to consider both advantages and disadvantages carefully before you decide to start-up lawn care business – or any other sort of business for that matter. Think about this list of advantages and disadvantages and see if you can add some of your own points to these lists. You really need to consider your own character and then try to decide if you want to run your own small business?

Questions to Ask Yourself if You Are Thinking About Starting a Local Lawn Care Business

o Can you work alone?

If you are fond of company and/or require a push to get going, do not consider any form of self-employment let alone starting up a lawn care business. The same applies if you spend more time procrastinating than actually working. You need to set a schedule. You may even have to lay out other schedules for employees. Furthermore, this type of business sometimes demands you do the job now before the grass grows any higher or the crab grass problem becomes worse.

o Are you a self-starter?

You have to be able to put together a business plan. You must consider all the angles. You need to be confident in your own qualities and character to start and move on the project.

o Can you initiate the project and maintain high levels of involvement from start to finish?

It is not simply good enough to start out at a high level of enthusiasm and commitment. You need to maintain a high level of energy and involvement throughout all aspects over the duration. If you do not see to the running of all aspects of your company/business, it will not be a success. Every business requires tweaking and ongoing maintenance. You have to be fully engaged in the process from the initial decision to the final move to sell the company. If you cannot commit yourself to a set period-of-time, do not begin to open a business.

o Are you good at sales?

Can you sell yourself and your work? You will need to do this. At the beginning, you will need to sell both yourself and your work. You are new in a field where there is already competition. You have to sell yourself to clients as being the best for the job. You have to present yourself and your business as professional, reliable, apt and more than acceptable. If you are a one-person-show, you will also have to sell your business on paper, on the net and in other forms of media. You may even end up doing cable TV shows or radio talk shows to improve or garner business. Can you handle needing to be a sales person?

o Are you a people-person?

If not you are wasting your time. The lawn care business is a service industry. By its very definition, this means you are serving other people. Therefore, your daily work and business involves public relations as much as it does lawn care. You must deal with people on a day-to-day basis to ensure your company is doing the right job. You have to talk to people to obtain more customers. You have to set up a means of communicating with possible customers.

You also have to deal with employees. You will need to train and instruct them. In the process, you also have enough self-awareness to know who to delegate to and when. This also requires the psychological ability to understand the employees and their needs. Being aware will also help you in hiring the right people for your business and firing the wrong types. Hiring refers to not only the people you employ to work in the company but those you need to ensure you have the right logo on your vehicles, to print the business cards, to advertise your business on their web site or in print and to handle your accounts.

Listen to Your Intuition

Throughout the analysis process provided above, be thoughtful and honest with your answers. Try to be objective in your assessment of your own nature and character. If you believe that the advantages outweigh the disadvantages, then consider it a step in the right direction. What is your gut feeling telling you about the possibility of becoming a lawn care contractor?

If the idea really feels right then sit down with a pen and paper, or computer and printer, and set out your goals. Start to formulate at least an elementary business plan. These steps are an integral part towards starting up what will hopefully become a very successful local lawn care business.