The advantages of owning a franchise outweigh those of starting an independent business. From working with mentors that can provide invaluable advice to having the backing of an established company for training, marketing and operations, owning a franchise is a great start for any entrepreneur’s journey.
Buying an existing franchise is an even better way to get started on your entrepreneurial journey. Franchise Owners can take advantage of a proven business model and an established brand to get started on the path to business success.
While you investigate investing in a franchise, consider speaking with a franchisee looking to retire from the business. This will give you a better idea of all your alternatives before stepping into the world of entrepreneurship.
Why You Should Consider Buying An Existing Franchise
One of the biggest advantages of buying an existing franchise is that the business is already generating revenue. You also don’t need to worry about the additional set-up costs that come with starting a new franchise.
Apart from the cost savings, you will also gain a network of other franchise owners and a base of customers to operate from. An existing franchise is a great way to begin a business without the hassle required to start one.
Some of the benefits of buying an existing franchise include –
Existing Customer Relationships
When you decide to buy an existing franchise, you’re getting the pre-established relationships that already exist with current customers. These connections can be invaluable. Studies have estimated, that gaining a new customer can cost five times more than retaining a current client. When you buy an existing franchise, you already have a solid customer base.
Whether you choose to buy an existing franchise or start a new one, it’s important to do your homework. It may seem that some industries, for instance, have a lesser need for customers to return. However, WIN Home Inspection has created a unique model by offering 35+ essential inspection services, encouraging customers to return so they can assess needs they didn’t even know they had.
When starting a business or buying a franchise, location is an important consideration. Your decision on where to locate can affect the availability of skilled employees, the amount of foot traffic you receive (if you are opening a store) and a variety of other important factors. When you decide to invest in an existing franchise, you may be one step ahead of business owners starting fresh.
This isn’t to say that you have to keep the franchise’s current location. In fact, the owners may be selling their franchise after learning that they picked an imperfect location. Fortunately, you can figure this out beforehand. Do some research into the surrounding area and look at the company’s profit sheets from recent months.
It’s important to note that some companies focus on location even for new franchisees. At WIN Home Inspection, for instance, your territory will be based on how many real estate agents and transactions exist in a certain locale. In a world where more people are finding professional services online, devoted territories are just as important as a good location.
Established Brand Recognition
Another benefit of investing in a franchise is the established brand recognition. This is the case with all franchises, but when you buy from an existing owner, the local area has already established a personal relationship with the company.
Consistent brand presentation has been shown to increase revenue by up to 23 percent. This makes your franchise purchase – whether new or already existing – a profitable business from the beginning.
While the reputation in the community the previous owner built can prove beneficial, it’s also important to note that some customers may feel out of place. Even though you’re running the same company, they may be concerned that they won’t receive the same service.
This could potentially put buying a new franchise or an existing one on equal grounding. Even if some customers think service levels won’t remain consistent, though, you can alleviate their concerns through excellent business and personal aptitude.
Vendor Relationships in Place
One of the most overlooked aspects of running a business is vendor relationships. No matter how great your idea is, you’ll need other businesses to make it work. Whether it’s training, certifications, marketing, operations, buying insurance, purchasing inventory or hiring a maintenance professional, vendor relationships can have a significant impact on your success.
When you invest in a strong franchise, you can mitigate those headaches. And with purchasing an existing franchise, you can gain additional insights and experience into how these established relationships add value.
Mentorship and Training from Retiring Franchisees
Franchise owners can take advantage of the mentors that already provide their expertise to others in the business. One need only consider the fact that the 5-year survival rate for most businesses is 50 percent, but 70 percent of companies whose business owners have mentors make it past this mark.
The great thing about buying an existing franchise is that you can also gain mentorship and training from the previous owner. Few will have the level of experience they have in running that business within that community. Establishing relationships with existing franchisees is still important but maintaining contact with the previous owner – if they’re willing – could prove invaluable.
Trained Team in Place
Dependent on your overall goals and needs, you may not find it necessary to have any employees. If you do, however, it can be beneficial to already have them in place. When you buy an existing franchise, the current owner has already gone through the trouble of hiring and onboarding employees. This can save you significant costs and allow you to hit the ground running.
On average, it costs about $3,000 to onboard a new employee. This is because you’ll need to find the right person for the job, train them, put in hours to get them “on the books” and other essential tasks. Even after spending money to hire workers, many companies lose their investment due to turnover. When you come into an existing franchise, your employees may already be mainstays at the company.
Of course, you may prefer to bring your own team. Even better, you may be able to cut costs by handling the company yourself. These are all important questions to ask when deciding between a new and preexisting franchise.
The benefits of investing in a franchise far outweigh starting a business on your own from scratch. Further, buying an existing franchise could potentially create even more advantages for you. Take the time to research your options, and you’ll find which works best for you.
Owning your own business can be exciting and fulfilling. WIN Home Inspection offers invaluable resources for you in your journey toward business ownership and a rewarding career. If you want to learn more about the franchising opportunities at WIN, contact us at email@example.com to connect with one of our franchise advocates.