Coming up with that idea is one of the coolest feelings in the world. It makes you daydream during the day and keeps you awake at night.
August 14, by Adrian Rather than carrying out a company formation to start a new limited company, people often buy into an established franchise to get started in business. But what are the advantages and disadvantages of a franchise? Advantages of a Franchise As a business structure, a franchise can certainly be an appealing option.
With a number of advantages, it is often the choice of those looking to start a new business without the risks associated with going out on their own. An Established Business A franchise offers the advantage of operating under the banner of an already established business.
The ideas, the brand, the operating techniques and much more are already tried and tested and in place ready to be implemented again and again at a new location as each franchisee takes up the mantle.
A Known Brand Operating under the banner of a franchise allows a franchisee to take advantage of the previously established brand of the business. This means there Advantages and disadvantages of entrepreneurship in theory be far less work and cost involved in trying to establish and build on the brand of the business.
It will already be known and trusted by the market and therefore should produced a steady stream of brand-loyal customers.
Adopting a franchise means the advantage of the franchises trademark and the benefits of a registered trademark. Simpler Business Financing Yet another advantage of franchises is the fact that acquiring business finance is generally easier.
Investors are far more willing to invest in a business with an established network, secure brand and effective support structure. In some instances, finance may be acquired from the franchisor, making life even simpler for the new business.
Business Relationships The franchisee can also take advantage of the numerous business relationships already established by the franchisor. In all likelihood, relationships with suppliers and perhaps distributors will already be in place and easy to manage.
The advantages of already established relationships with advertisers and marketing teams may also be of benefit to the new business start-up. Support and Security Franchises offer the advantage of a support and security system. Often franchisors will offer training schemes and support with things like the management of accounts, sales, advertising and more.
These sorts of things may well be included in the price of the franchise fee. The security offered by the franchise can give the impression that the business will be less likely to fail. People often think that another advantage of starting a franchise is that they will make more money.
The fees that a franchisee pays to the franchisor often means a big cut in profit and due to the limits imposed by the rules of the franchise it is often less easy to invest the profits in a tax-efficient way as you could by forming a new limited company.
A franchisee might benefit from higher profits in the beginning, but in the long term, they will often find that starting their own business would have been more profitable.
Disadvantages of a Franchise Just as with any business model, there are disadvantages to setting up a franchise. Quite often people are under the mistaken belief that the advantages outweigh the disadvantages, but this is because they are commonly blinded by the potential risks of starting a new business from scratch.Entrepreneurship has its share of advantages and disadvantages.
Freedom: Being your own boss offers unparalleled freedom in terms of the type of work and the amount of work.
Of all the choices you make when starting a business, one of the most important is the type of legal structure you select for your company. Not only will this decision have an impact on how much. Entrepreneurship Development Institute of India is one of the leading management institute in India offering 2 year full time PGDM program in Business Entrepreneurship, MBA Courses in BE.
Entrepreneurship The advantages of “globalization” are that it provides a wide range of markets to large corporations. It also provides them with a source of cheap labor. Virtual team is an emerging new-age trend with followers across business sectors. Just like any other new trend, virtual team also has to undergo strict scrutiny of researchers to weigh its advantages and disadvantages before being accepted by the professionals.
A private limited company is one type of business structure. In this lesson, you will learn what a private limited company is and explore some of its advantages and disadvantages.