Choosing Between a Franchise, Business Opportunity, or Go It Alone

The three most common ways to start a business is through purchasing a franchise opportunity, a business opportunity, or do your own thing. We are all pretty familiar with the latter so why would you choose one over the other. I chose a business opportunity and I’m glad I did. I”m not going to say one business type is better than the other but instead, I’ll talk about my experiences with each.

I started by looking at franchises. I went to the franchise websites like and others. A simple google search will yield plenty of franchise results. What are franchises? They are in most cases successful businesses with a proven method of doing business. A franchise opportunity must also report to the government regarding the successes of their franchisees and the income producing capabilities of each. Franchises are chosen by franchisees because they have a proven business method and for those with no business experience that are seeking a business investment a franchise can seem promising. A franchisor, for the reasons mentioned, has an incentive to support a franchisee and help make him or her successful. Franchises are typically the most expensive form of opportunity and offer the least control of the business to a new business owner. A franchisee either does things the way the franchisor says or the license to do business under their name is revoked.  Royalties are paid to the franchise system and are used to support advertising, marketing, support staff, and more. A franchisee reports his income regularly to the franchisor to make sure royalties are being assessed properly. Sometimes, this makes specific types of businesses unprofitable as volume comparitive to competitors must be greater or you must sell at a higher price point to yield a profit. The competitors I’m speaking about are those in the same business as you that are not franchises and don’t  have the additional overhead.

A business opportunity is similar to a franchise. They are found on the same websites as the franchises so be careful to understand which type you are inquiring about. The big difference is that there is no explicit government reporting and their is no explicit support for the purchaser of a business opportunity. Respectively, with regards to the latter, the income projections should be reviewed very carefully as in some cases, they can be faulty and the you should inquire from others in the business opportunity regarding the level of business support they’ve received over the years. A business opportunity typically will have some measure of business support, you purchase all your equipment and fixings through them (it’s where they make their money), and their is limited training. Typically, they are not as costly as a franchise. I purchased a business opportunity and spun two businesses of it that I may otherwise have not been able to do under a franchise agreement.

If you go solo then you are truly on your own. Choosing this path is the most difficult for those that are not experienced. The SBA will typically dissuade you from leaving your day job until you’ve got your business going and it can support your lifestyle. Professionals such as doctors and lawyers etc. aside, unless you have a salable skill then starting in a business with no experience can be a daunting task. There are many “tricksters” out there that are happy to take your money and sell you on their service or product. It took me about two years to develop my relationships with my vendors. The first few that came through my doors were very happy to sell me what I couldn’t use. By the way, I purchased a signage business opportunity. From there I spun off for tradeshow displays and graphics. My sign shop goes by a different name.

Consider carefully and seek professional help from the SBA and other agencies that can consult with you regarding your idea.

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