So you’re ready to start a business. You’ve researched opportunities, gotten your finances in order, and committed yourself to taking the entrepreneurial leap. Now you’re probably being bombarded by choices.
If you have an independent streak, you might want to start a business from scratch. If you’re more system-oriented, you might want to become a franchise owner. If you’re good at building on existing success, you might want to buy an existing business.
Each of these options can lead to successful business ownership. The common thread is that all of them give you the chance to be your own boss—an idea that millions of people ponder every day but only a small handful ever pursue. Depending on your circumstances and goals, each might represent the “right” choice for you.
First, the definition of business opportunity
Many people think of the term as a catchall for any scenario where an entrepreneur can make money. However, a specific definition of “business opportunity” exists under federal and state law. This is a commercial arrangement where a seller offers a packaged opportunity to start a company—or a “business in a box.”
Franchised businesses fall under this umbrella term, but distinct legal definitions exist. For instance, a packaged business opportunity can apply to anything from vending machines to lists of clients. Franchises, on the other hand, are more structured—more up-front fees and investment costs, more rules and regulations, but also far more support for business owners.
A franchise is a business model where one business owner (the “franchisor”) sells the rights to their business logo, name, and model to an independent entrepreneur (the “franchisee”). The two most common forms of franchising are:
- Product or trade name franchising, where the franchisor holds the right to the name or trademark of a business and sells the right to use that name and trademark to a franchisee, and
- Business format franchising, where the franchisor and franchisee have an ongoing relationship, sharing services like employee training, product supply, marketing plans, and funding assistance.
An example of a well done franchise business model is CMIT Solutions. They are a Managed Services Provider (MSP) franchise that specializes in IT solutions. With over 250 locations, they’ve built their brand immensely since starting in 1998 and are now recognized as the largest IT franchise in North America. This “packaged business opportunity” offers a mainstreamed managed services model that provides franchisees with recurring revenue streams and clients with efficient and affordable technology solutions. New franchisees can expect extensive training prior to launch, and ongoing support after. Part of that support includes an award winning Marketing Playbook. The extensive network CMIT Solutions has built has allotted for long lasting relationships throughout the IT industry which continues to provide optimal support for the franchisees. Check out a few of the success stories to learn more.
Should I buy an existing business?
Nothing comes easy in the business world—including long-term success. The Small Business Administration estimates that about 20% of all new business ventures fail in the first year, while roughly half fail by the fifth year. That lends a little levity to the record-breaking numbers of new business applications submitted to the SBA in the last few years: 3.5 million in 2019, 4.4 million in 2020, and 5.4 million in 2021.
Buying an existing business provides some protection against such concerns since you’re taking over an existing business model which often includes an established client base, defined operating expenses, and well-trained employees. However, without external guidance—or the guiding hand of the previous business owner—you could struggle as you navigate the ups and downs of running the company.
Franchising gives you hands-on assistance that can be a lifeline for new business owners. In some situations, you can even take over an existing franchise, blending the best aspects of venturing out on your own and investing in a previously successful company.
What is the benefit of a franchised business compared to an independent business?
Being your own boss is a major motivator for most people. After a long career of working for big companies or climbing the corporate ladder, you may want to call your own shots. Autonomy also comes from overseeing your own schedule. For those with families, this is huge as you can build personal time and flexibility into your regular work schedule.
The good news is that autonomy is achievable with both independent businesses and franchise opportunities. Some franchises, such as those in the fast-food industry, may require you to work certain hours. But others, such as those in the technology or IT service sector, only ask that you follow a standard business-hours template.
With franchises, the big benefit is extensive operational support—a critical part of new business success. From pre-launch coaching to ongoing mentorship, to knowledge of best practices and examples of tried-and-true business models, to marketing playbooks and turnkey sales strategies, franchise businesses provide robust support.
If you choose to blaze your own trail with an independent business, you will be responsible for developing and maintaining these systems. Ultimately, you’ll succeed or fail on your own. Many entrepreneurs appreciate this kind of risk, while others gravitate toward the support and stability of franchising. Again, there’s no “right” or “wrong” path forward—only the appropriate fit for your particular circumstances.
At the end of the day, the most important indicator of success is not whether a company is independent or a franchise, but rather the industry it operates in, the quality of its product, and the overall economic climate. At CMIT Solutions, our 225+ franchisees provide reliable IT support and cybersecurity protection to the businesses in their community. Technology is increasingly integral to day-to-day business operations, making our services a critical must-have for thousands of clients across North America.
With a stable business model, predictable recurring revenues, and one of the strongest potentials for growth in any industry, now is the time to learn more about owning an IT franchise with CMIT Solutions. Visit cmitfranchise.com to find out how to carve your own path.