A hot theme at the moment seems to be “Whats the best option for starting up my own business? Self-employment or buy a franchise opportunity?”. These are typically people who are out of work due to redundancy or lay off, or still in full time work and just looking for a change of focus in their working life.

So what are the advantages and downsides of self-employment over a franchise business. Both choices do symbolize a way of working for yourself seeing as regardless of whether you form a business based on your own personal idea or buy a franchise business opportunity, you will still in fact own the company and will be responsible for whether it succeeds or is a failure. So here are some of the key differences:-

Self-Employment

Pros

All income is yours to administer.
You can work to your own personal ideas and find a structure that works for you.
Satisfaction in knowing you are building a business for yourself, in your own personal way.

Cons

Its recognized that self-employment in the UK has a high breakdown rate with approximately 4 out of 5 businesses failing within 3 years.
You will be building up a brand and reputation from scratch.

A Franchise opportunity

Pros

The NatWest/BFA annual survey consistently reports in the region of 90% of UK franchisees are trading profitably in any given year. Other countries have comparable statistics on franchising.
You’re working to a business formula that ought to have been tested as successful by a franchisor.
Most franchisors make available training and support backup.
The franchise business might have well-known branding and history which you could benefit from.
There are a wide range of franchise opportunities obtainable including franchises to suit women, work from home franchises, retail franchises and quite alot more. You can read some of the franchise success stories to find out more.

Cons

There will often be an upfront franchise fee to cover setup and training costs.
Many UK franchise businesses charge recurring franchise management fees (typically a proportion of proceeds or profit) which cover ongoing training and backup.
You will usually have a contractual attachment to the franchise owner for so long as you operate the franchise opportunity.

These are really just a rough guide as there are other points. Whichever preference you pick out its key to observe that running a business demands determination, dedication and a good deal of hard work!

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