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Regardless of your online business model, industry, or motivation, it’s no secret that the majority aspiring business owners are fascinated by entrepreneurship to generate profits. However, there are many options available if you end up attempting to grow your wealth portfolio. After all, anyone considering starting a business has probably made money in other ways – through traditional employment, passive investing, real estate, syndicating private investments through family and friends, private transactions, or being a partner in independent firms.
One option to contemplate is owning a franchise. In fact, franchises can behave just like the income streams listed above, but may offer additional advantages. Let’s have a look at how owning a franchise business compares to 4 alternative sources of income: corporate work, real estate investing, owning a non-franchise business, and passive investing.
1. Franchising and dealing in an organization
Most franchise owners have skilled experience, often in corporate America, which is a serious asset, providing experience and business acumen. Owning a franchise is comparable to a company position by way of hours worked, teamwork and management skills, with key differences. Primarily, the differences result from 4 fundamental issues that affect corporate employees:
- Autonomy: Controlling your destiny (outcomes) in a company role could be difficult when many aspects are beyond your control.
- Flexibility: In a company role, you are often working around another person’s schedule, which makes it difficult to administer your personal life.
- Goal/passion: If your job is not fulfilling or you are not satisfied with selling widgets, it may be difficult to remain focused in a management position.
- Financial security: Corporate positions were once a protected path to constructing income and wealth; nevertheless, in today’s economy, this becomes dangerous as you approach middle age and are still in middle management positions.
In these 4 areas, franchise ownership offers alternative options that allow for greater control each on a big scale and in your on a regular basis life.
2. Franchise and real estate investments
Like investing in real estate, franchising requires a certain level of upfront costs and investment. Like rental properties, owning a franchise is a giant responsibility that can require maintenance, ongoing costs and hands-on management.
However, franchising can often provide a greater return on investment than real estate. Consider a beauty salon franchise, where beauty professionals rent apartments from you to run their business. In this scenario, you might be accountable for the initial investment, improvements to the leased facility, and filling the salon with beauty professionals. However, after this stage there just isn’t much to do each day
As with investment properties, your time spent in lots of franchise models could be highly valued, but unlike real estate, you provide a novel service with higher barriers to entry, typically generating a greater return on investment. Once you begin your online business, you’ll typically enjoy high-level supervision and fewer day-to-day operations.
3. Franchising and ownership of a non-franchised enterprise
Whether you own a franchised or unfranchised brand, ownership of the business is ownership of the business, right? Evil.
Depending in your specific business goals, each of those models offers many options to contemplate. Primary differences include level of control, available financial and time leverage, branding and marketing opinions, research and development capabilities, staffing and training practices, and shared industry knowledge.
Franchise ownership means you might be starting a brand new business, but not from scratch. There are tried and true frameworks for motion. For the proper candidate, that is an excellent place to begin. However, when you want control over the concept and specific details, a non-franchise business could also be a greater option. Just do not forget that starting a business from scratch takes motion Very time for things that don’t generate revenue (logo, user manual, configuration of office facilities, etc.). If you are taking a business-from-scratch approach, be sure you are prepared for a protracted ramp-up period.
4. Franchising and the passive investment portfolio
No business is really passive – when you want truly passive income, consider buying stocks and bonds. While there are franchises which might be passive, they require rather more capital (consider a hotel chain). Of course, truly passive franchise models don’t fit into probably the most realistic budgets.
That said, there may be a middle ground. Successful franchise owners often find that the time spent running and managing the business decreases over time. Most franchise models may ultimately be run by a general manager quite than the franchise owner. While full-time employment could also be crucial at first, franchise owners who’ve built their operating platform may develop into semi-passive over time.
If you might be within the strategy of evaluating your portfolio and in search of alternative options, it’s possible you’ll want to contemplate owning a franchise. By comparing franchising to other, more traditional ways of getting cash, reminiscent of corporate work, real estate investing, owning a non-franchise business, and passive investing, you will find a way to make the very best decisions that suit your profession goals.
Ultimately, it is important to know your options to chart the very best path forward. Who knows? You could discover your next necessary step in your profession.