💡 Should you buy a Business or Franchise?

Good morning business buyers, brace yourself for a listing packed email of opportunities.

We believe every Aussie business should find its perfect buyer.

I can already feel the electrifying energy in the air as you embark on this epic journey.

So lets navigate your way through the intricate dance of closing deals… Let the adventure begin!

This week we had 156 new businesses listed.

So today we break down:

• Should you buy a business or are you better suited to buying a franchise?

• Plus the 7 most interesting new businesses this week 👇

7 Most Interesting Business For Sale this Week:

Should you business or franchise?

Buying an existing business and buying a franchise are two different approaches to acquisition entrepreneurship.

Each option has people that have been successful with each path, but which option is right for you? Let's explore the advantages and disadvantages of both options:

Buying an Existing Business:

Pros:

1. Proven Track Record: An established business already has a track record. This gives you the best possible insight into what the business is capable of.

2. Existing Customer Base: You inherit an existing customer base, which means there's already some brand recognition and customer loyalty built-in.

3. Established Systems: The business likely has established processes and systems in place, making it easier to step into the role as the new owner.

4. Immediate Cash Flow: If the business is running profitably, you can start generating income right away.

5. Flexibility: As the owner, you have more freedom to make changes and adapt the business to your vision and ideas. If you want to make big changes, you have complete freedom to do that.

Cons:

1. Higher Initial Investment: Acquiring an established business can be more expensive upfront compared to starting a new franchise.

2. Potential Challenges: There may be hidden issues within the business that you only discover after taking over, such as staff turnover, bad reputation, or operational inefficiencies.

3. Less Support: You won't have the same level of ongoing support and training that a franchise would provide. Often sellers might provide 30-90 days transition but after that you are on your own.

4. Rebranding Challenges: If you plan to change the business significantly, rebranding can be challenging, as you may risk losing some existing customers. This often happens when a new owner wants to change the name of the business once they take over.

Investing in a Franchise:

Pros:

1. Established Brand: Franchises come with a recognised brand name, which can attract customers more easily. Often franchises have large media budgets that lets them advertise on TV and billboards, that other smaller businesses might not be able to afford individually.

2. Proven Business Model: Franchises typically have a well-established and successful business model, reducing the risk of failure. They should have examples of what other franchisees are making.

3. Ongoing Support: Franchise owners receive continuous support, training, and guidance from the franchisor, which can be valuable, especially for first-time entrepreneurs. Plus franchisees have also mentioned how nice it is to have a network of other franchisees going through the same challenges.

4. Easier to Secure Financing: Banks and lenders may be more willing to provide financing for a franchise due to its proven track record. Plus a new franchise may be less up front investment making it more affordable.

5. Scaling: If you wanted to buy multiple businesses. Once you have mastered one franchise operations you may be able to buy other franchise locations from other franchisees. Often using seller financing, to expand your territory for limited up front cost.

Cons:

1. High Initial Franchise Costs: Franchisees need to pay an initial franchise fee and ongoing royalties. These are used to help fund the franchise system as a whole but can cut into individual business margins.

2. Limited Flexibility: Franchisees must follow the rules and guidelines set by the franchisor, limiting your ability to make independent business decisions. If you want to rebrand or change focus of the business then you might not be able to in a franchise system.

3. Shared Success and Failures: The success of your franchise may be influenced by the performance of other franchisees within the same brand.

Ultimately, the decision between buying an existing business and investing in a franchise depends on your individual preferences.

Both options can help you become a successful business owner.

Business For Sale around Australia

Till next Tuesday!

Sam from Business For Sale