When entrepreneurs plan to put up a new business, they’re more likely inclined to the idea of launching their own brand rather than buying a franchise or an existing business, even if it means having to start from scratch. With a brand of purely their own idea, they will have opportunities to explore their own creative freedom, introduce new trends, and outwit their competitors.
But while those are all incredible perks of starting a business from scratch, the challenges involved in it aren’t always survivable. Creating a business plan alone is already taxing — how much more will it be when you’re already trying to obtain funding? Unless you have enough savings to finance your capital, applying for business loans can be a real struggle.
That said, if you’re thinking of starting a business from scratch, here are the challenges you need to be prepared for:
Business Plan Problems
Your business plan has to outline your goals and how you’ll attain them, plus the possible problems you’ll face and your solutions. Once your business is up and running, all the plans and strategies you’ve developed must be implemented, unless you discover that they’re ineffective. However, if the business plan isn’t faulty, to begin with, yet you still made decisions that strayed you farther away from your goals, then you’re setting yourself up for failure.
High Failure Rates
According to the U.S. Bureau of Labor Statistics, approximately 45% of new businesses fail during its first five years. Of course, this shouldn’t be a reason for entrepreneurs to withdraw their plans, but if you’re not willing to risk your success, you can buy a franchise, instead. That way, you’re starting as a recognized brand with an established business model and a stable customer base.
Starting your first business from scratch means you need to network extensively to obtain considerable funding options. If you’re experienced, you may have an advantage from the profits you’ve earned from your existing or past businesses, but newcomers sure won’t have it easy.
If you buy a franchise, your financing struggles can be lifted if your franchisor offers financing programs. But even if they don’t, obtaining commercial loans may still be easier for you, since you’d be working with a tried and true business plan, which would be useful in getting the approval of lenders.
Coming Up with New and Original Ideas
As the owner of your independent business, you’re in charge of developing new and original ideas that will aid in the progress of your success. You need the ability to think creatively on the spot, which induces a tremendous amount of pressure, especially if you’re inexperienced.
This is probably the hardest challenge all entrepreneurs face, especially newcomers. Like forming new ideas on the spot, decisions should be made abruptly at times, too. If you’re also managing a company, its progress will largely depend on your big decisions.
But all of these challenges can be mitigated by opting to buy a franchise instead of starting from scratch. A franchise business can be greatly profitable, as proven by popular fast-food chains and famous ice cream store franchises. As the old proverb goes, “if you can’t beat them, join them.” What more victorious than being a part of an empire you just used to admire from afar before?
Owning a franchise doesn’t mean you can no longer make your entrepreneurial dreams come true. If you still wish to launch your own brand someday, you can use your hard-earned profits to make that a reality. Who says you can only own one business at a time? As long as they’re not competing with one another, you can be the boss of as many businesses as you like.