It may be no surprise that the vast majority of Americans want to own their own business. However, a new survey confirms what is stopping them from taking the entrepreneurial plunge. Coverall North America, Inc., one of the leading franchisors of commercial cleaning businesses, polled 1,000 potential small business owners to understand their bigger obstacles to starting a business. The top three answers included startup costs, financial risk and lack of experience.
The cost to start a business could range from a few thousand dollars to a few hundred thousand dollars. On top of that initial investment there are endless roles and responsibilities, from sales and marketing to running the day-to-day operations of a business.
“One potential way to reduce costs and risk and jumpstart the entrepreneurial experience is to invest in a franchise,” says Coverall’s CEO, Richard Ascolese. “Franchises provide people with the instant credibility and backing of a reputable name, as well as guidelines and to operate the business as well as a potential pipeline of customers.”
The International Franchise Association says there are about 795,000 franchises in the US and that number is rising. There are more than 8,000 people operating Coverall cleaning franchises across the county. As we celebrate small businesses and Small Business Week, the US Small Business Administration highlights franchising as a great option for people to consider when seeking to start a business.
Ascolese outlines the following benefits for those who are considering investing in a franchise:
Operations 19% of people Coverall surveyed said lack of experience has kept them from starting a business. Managing financials, hiring employees and driving sales are a lot of work. Franchisees are offered training, guidance and support to help manage all aspects of a business. Just like any small business owner, Franchised Business Owners have the opportunity control their work hours, grow the business at their pace and oversee the hiring of additional employees. As opposed to independent startups where the owners have to figure everything out on their own, franchisees have a guide to follow.
Customers want to know the people they are hiring to do work are reliable. And brand recognition can contribute to their level of confidence. Potential customers expect they will receive a consistent product and service that is associated with that brand. Along with reputation that stems from a known entity comes credibility that a person has the support of an entire organization, even if he or she is the sole proprietor of an independently owned and operated franchise.
Reaching potential customers and developing a brand costs time and money. A franchisor can help do that for small business operators, which is what a portion of franchise fees are used for. Whether it’s through digital advertising or flyers and collateral that can be shared with customers, having the support of a larger marketing department alleviates much of the stress of creating content and managing ad budgets. It’s important to market locally and sell to customers but having that broader support and guidance goes a long way.
39% of people surveyed said startup costs are their biggest obstacle. It could take months for entrepreneurs to bring-in business once they start a company. Franchisors can alleviate some of the risk by providing a pipeline of customers ready-to-go for a new business owner. Having outside support to provide leads and identify customers is invaluable to a startup.
Many franchises, such as Coverall, over specialized training beyond the initial investment. Continuing education is vital. Industries and technology are frequently changing. Franchisors have a team of people constantly researching the market to identify the latest trends. While small business owners may be tied up with day-to-day operations of a business, a franchisor will make sure the small business owners are up-to-date on information. On top of that, there are often resources people can routinely go to for answers to questions. Many franchisor also have groups and platforms where franchisees can communication and learn from one another, rather than being isolated and trying to grow without proper resources.