In year three of the global pandemic, we continue to see huge numbers of people looking to leave behind the traditional 9-to-5 workforce. Many people have seized the opportunity not to simply leave their existing jobs, but also to leave behind that model of work—instead choosing to work for themselves.
There’s tremendous value in being your own boss. Owning a business can be rewarding, allowing you the flexibility and work/life balance you can’t achieve otherwise.
But did you know that the failure rate for small businesses remains high? After two years of business, approximately 20% of new businesses have closed. That number rises to half of the businesses by the five-year mark and nearly seven in 10 businesses by year 10.
How can you make sure you find success? While there’s no absolute when it comes to owning a business, particularly in times of
economic uncertainty, you’re much more likely to find success when operating a franchise than when opening up a standalone business. Read on to learn why.
Factors That Cause Standalone Businesses to Fail
While there are many different issues that can crop up and cause a business to close, as we’ve learned with certainty these past few years, there are two that are very common:
Reason for Failure No. 1: No Market for the Product/Service
Many people who open up a business find over time that there’s simply no market in the community for the product or service they’re offering. There may be an overabundance of other businesses with the same offering, or it may simply be something the people in that area or region don’t need or value.
You’re less likely to run into this problem when operating a franchise for two reasons. First, franchise organizations do in-depth research to identify the best markets to enter, meaning the legwork is done for you. And second, the brand is already established—and it’s already one in demand.
Reason for Failure No. 2: The Product Is a Dud
Again, this is an area where franchises offer a major benefit. When you’re opening up a standalone small business, you’re going at it alone. You are responsible for creating a product or service and getting it out into the community.
There is always the risk that your offering will fall flat. It’s a very real risk. When you invest in a franchise, the franchise organization has done the heavy lifting in creating (and marketing) the initial product or service offering. That will have involved a good deal of research into what works and what doesn’t, so by the time it gets to you, the offering is more likely to succeed.
If you’re ready to turn your dreams of business ownership into a reality through a franchise, we’re ready to help! Reach out today to take the first steps in the franchising journey.