Starting, buying or franchising

Consider all the options available to you - starting a business, buying an existing business, or going into a franchise. Choosing the best option can be the difference between running a business that makes you money or one that costs you money.

Starting a business

Advantages

  • You have complete control over the business.
  • You can choose and set-up every aspect of the business (products and services, premises, equipment, suppliers, staff).
  • You can develop your business and grow over time.

Disadvantages

  • It may be difficult to obtain the initial finance.
  • You may not have an established customer base, and you may have to compete with strong, existing businesses.
  • Your business may not be profitable at first.

Buying an existing business

Advantages

  • There is an existing customer base.
  • You do not have to purchase equipment and stock.
  • Previous financial records give you an estimate of running costs and profits.

Disadvantages

  • The business may have financial or legal problems.
  • The business's success may depend on the skills and experience of the previous owners.
  • The previous owners may be selling as they see tough times ahead so you may not be able to grow or expand the business.

Going into a franchise

Advantages

  • You are supported by the franchisor and have access to training, information and resources.
  • Market exposure is higher than with most businesses as your business is an established brand.
  • Your expenses may be lower through the collective buying power of the franchise.

Disadvantages

  • You cannot run your business independent of the franchisor.
  • If you want to make changes to your business you may not be able to. You can be restricted by your franchise agreement.
  • Your reputation can suffer if other franchisees have a poor reputation.

Seek advice before you sign

You must get professional advice before you start or buy a business, or go into a franchise. Your solicitor, accountant and business adviser can help you to thoroughly examine a business or franchise before you sign a sales contract or franchise agreement. We recommend that you consult advisers who specialise in buying or franchising, as they have the experience and knowledge to help you avoid any problems.