Franchising 101: Owning Your Own Business vs Working a Job
Should you start your own business and become your own boss, or stick with your 9 to 5? There is no single right answer. Being in charge appeals to many people, filling them with excitement and a sense of achievement. Others are drawn to the steady salary and security of a corporate career, along with the comfort of not being responsible for every business detail. Before you make any big decisions, it’s important to consider the advantages and disadvantages of being an entrepreneur vs employee, as well as a few ways that franchising could be the solution and ease the transition into owning your own business.
Business Owner vs Employee
- Advantages: When you own a business, you unlock earning potential. You reap the rewards of your work, meaning you can generate higher earnings for yourself based on the success of your business and how much you want to scale. Successful business owners may choose to further their growth and income potential by opening another business or expanding to additional locations. In addition to taking a salary, business owners can also enjoy the profits when the business is successful.
- Disadvantages: As a business owner, there is no guaranteed income. Not only that, but after starting your business, it may take a while before you are able to take a salary or enjoy the profits. Depending on your method of financing, the initial investment to start the business may also set you back financially in the short term. The FTC recommends estimating your operating expenses for the first year as well as your personal living expenses for up to two years and having that amount available.
- Advantages: The most obvious advantage of having a corporate career is the guaranteed paycheck. Not only does that paycheck offer a sense of security but knowing what to expect in your compensation enables you to plan and budget accordingly.
- Disadvantages: As a corporate leader, you may have the opportunity for advancement in the form of raises and promotions depending on your experience and education. However, ultimately, your income may be limited to either a fixed salary or some other predetermined level of compensation.
2. Career Development
- Advantages: One of the benefits of entrepreneurship is the freedom to follow your passion, diversify your interests, and enter a different industry or explore new possibilities. Business owners gain career development and experience from being involved in all aspects of the various business functions such as management, finance, marketing, operations, and human resources.
- Disadvantages: Many new business owners start out doing everything themselves, or with a limited staff. This can cause burnout by performing work that you don’t enjoy or are not necessarily adept at doing until you’re able to scale the business and hire employees.
- Advantages: Employees often receive career development opportunities such as skill development, new responsibilities, or promotions. Beyond those opportunities, some employers provide training, professional development, or tuition assistance to pursue higher education. Being able to advance within a company or career can keep your job interesting and fulfilling.
- Disadvantages: Depending on an employer to offer opportunities for career development means that employees are usually limited to the industry that they are in. Even if a promotion is available, there typically isn't an option to explore new fields. It also means that if the company doesn’t grow or offer new activities, then the role of an employee may stay the same.
3. Work-life Balance
- Advantages: A valuable perk of being a business owner is the flexibility to choose when, where, and how you work.
- Disadvantages: Balancing time between your business and personal life is important yet developing a successful work-life balance is often the biggest challenge business owners face. Research done by The Alternative Board found that most small business owners work over 50 hours per week. Many business owners also frequently have difficulty switching off after hours.
- Advantages: For employees, work-life balance is built into the system with set hours and the ability to relinquish responsibility when you go home. Today’s companies are also making strides in providing better work-life balance for their employees such as flex time, remote work, and unlimited paid vacation time.
- Disadvantages: An optimal work-life balance can mean different things to different people, and how it’s implemented may depend on the company you work for. Employees at a job generally lack personal control over their work-life balance.
Franchising As The Solution
Is starting a business worth it? When it comes to working a job vs. owning a business, each has its own distinct advantages and disadvantages. Many employees long to take control of their career by starting a business or changing industries and simply aren’t comfortable with the risks. Perhaps they don’t want to lose their job and income security, or they don’t want to start at the bottom of a new company again. Owning a franchise offers a solution, providing the benefits of owning your own business with lower start-up risk than building something from scratch.
Owning a franchise helps mitigate startup risks compared to a traditional business. They do this by having a proven business model and brand recognition, helping to remove some of the initial legwork required to start a business. Franchise owners won’t need to develop a product or create a business model because much of that has already been done. The Bureau of Labor Statistics reports that 92% of franchisees were still going strong after two years while 20% of independent businesses close after two years. The high success rate of franchises appeals to people who are looking for a change and want to own a business but do not want to risk security.
Professional and Personal Development
For those looking to start a business or break out into a new industry, most franchises don’t require any prior experience or industry knowledge. This is thanks to the robust support systems and training that is provided. You can enter into an industry that aligns with your goals, passions, and interests, while developing your skills on the job. Franchise owners can scale their business to be as large as they want with the support that they need. And few things are as gratifying as watching your own business grow from your efforts.
As a franchisee, your job is to grow and lead the business, not work in it! Since you are buying an established brand, you don’t have to spend long hours building everything from scratch. Even delegating and outsourcing is easier with a franchise because much of it is built into the franchise model. As your business grows, you should be able to outsource or delegate day-to-day tasks to employees and work the number of hours you want while spending time with your family and pursuing your hobbies. With franchise business ownership you’re not on your own like starting a business from scratch, with extra support, mentorship, operational playbook, training, and support staff there when you need it.
The Choice is Yours
Are you still asking yourself, should I start my own business? Neighborly provides the support and knowledge you need to help make your business ownership goals a reality. Talk to a franchise consultant who can answer your questions and tell you about the mutual evaluation process to ownership.