đź•’Estimated Reading Time: ~4 minutes
If you’re looking into the idea of being your own boss, it’s important to know that there’s more than one way to go about doing it. You can:
- Start a business from scratch
- Buy a franchise
- Buy a business opportunity
Let’s briefly look at these three ways to go into business.
1. Starting a business from the ground floor is a good choice if you have a unique idea for a product or service.
In addition, if you like the idea of having total control of things, don't mind shouldering all of the load, and you would prefer to keep all the profits, a pure startup is the way to go.
2. If you don’t have your own product or service idea, but you want to be your own boss, a franchise business is worth a look.
That’s because when you buy a franchise, you get to ride the coattails of someone who has already come up with a business idea and is implementing it in real-time.
Of course you’re paying for that advantage in the form of a one-time upfront fee and monthly royalties, but you have ownership of your own business location.
3. You could look into business opportunities.
A "business opportunity" is similar to a franchise, but it's a business model that offers a lot more flexibility than a franchise does.
For starters, when you purchase a business opportunity, you receive a business “package.” This package usually includes equipment, training, along with documentation on how to operate the business.
As to the flexibility of a business opportunity, unlike a franchise opportunity which maintains tight controls and requires specific procedures to follow, business opportunities generally don’t have as many rules and guidelines. So if you fancy yourself as being an “entrepreneur” in the purest sense of the word, you should take some time and explore business opportunities as a way to be your own boss.
The Royalty Question
In addition to the flexibility that business opportunities offer, your monthly outlay will be significantly less than if you bought a franchise opportunity. That’s because business opportunities don’t charge royalties. Royalties are a flat fee or a percentage of your revenue paid to the franchisor in exchange for being a part of its system and having access to all of its processes and procedures. For example, if your franchise business did $20,000 in revenue last month, and your franchise agreement stipulates that you pay a 5% royalty, you’d have to send your franchisor a check for $1,000 for that month.
So how do sellers of business opportunities make their money?
They make it upfront.
For instance, if you purchase a non-franchised sign making business opportunity, and your total upfront investment is $225,000, a portion of that is profit for the seller.
The Support Level of Business Opportunities
Today’s business opportunities tend to include formal training and startup support. After that, in most cases the support you’ll receive is generally minimal.
Now, I’m not saying that the seller of a business opportunity will gladly take your money and leave you hanging after you open your business. Not at all. But it would be unrealistic for you to expect to have the type of formal support you’d have if you bought a franchise instead.
That said, some business opportunity sellers offer extra support after the initial purchase, but you have to pay for it.
Is a Business Opportunity Right For You?
If you like the idea of owning a business that:
- Provides a startup package and formal training
- Allows you to have maximum control on how the business runs
- Enables you to max out your entrepreneurial skills
- Has very few rules
- Doesn’t require you to pay royalties
A business opportunity could be the way for you to go.
To find out, check out the Franchise Direct Business Opportunity section of this website. After all, you do want to be your own boss, right?
The Franchise King®, Joel Libava, is a top franchise expert. He’s written over 2,000 different articles on franchise ownership and personally consults with people who are looking to buy a profitable franchise. Go here to find out how The Franchise King® can help you become your own boss.