Before I entered the home business industry, I weighed heavily the option of opening a franchise. I signed up for newsletters and received daily updates on the franchise opportunities that were available. What I found was very much like the home business industry, there are many, many opportunities to choose from. I knew it would be difficult to decipher the good ones from the bad ones and I spent a lot of time doing it. In the end, I came to the conclusion that none of them would be a good fit for me and I opted for the home business.

Now don’t get me wrong, I’m not calling out the franchises. There are many success stories for this type of business, and for many it is a great option. They just weren’t conducive to my goals and the lifestyle I wanted to live. I am simply going to show the similarities and differences between home-based businesses and franchises to better understand why home-based businesses may be a better option.

The similarities between the two are abundant. Both offer a variety of different opportunities to meet your budget guidelines. I have seen franchise options that require starting capital as low as $10,000. Some even offer in-house financing. With a home business, you can get started with an investment as low as $1000-$2000.

Both offer a proven business model to help ensure your success. This includes things like training that is based on what has and hasn’t worked for others. With a franchise, you can connect with other franchisees for advice on running your business more efficiently, just as you can connect with successful leaders in the home business industry.

The biggest similarity of all is that both will require a lot of dedication and hard work. You can’t buy a franchise and expect to make money the next day. The time and effort you put into it will ultimately determine your success. There is no such thing as a free lunch in this world and get rich quick just doesn’t exist. You have to be passionate about what you’re doing and do it every day to reach your goals. Both businesses have a failure rate that can be caused by a number of things. It could be due to a bad business model, or simply because someone didn’t work hard enough to make it successful.

Although some of the similarities we mentioned may sound great, it is the differences that may make you doubt whether or not the franchise is the path you want to take. With franchises you have a lot of overhead and operating expenses. You’re going to have to pay rent for the space you rent, plus additional things like electricity, water, and sewer.

In most cases, you will need to have employees and the payroll that goes with them. You will have to go through the trouble of finding people you can trust. You must make sure that they are not people who steal from you. If you don’t want to be there all the time, you’ll need to hire a store manager on top of that.

There will also be things like equipment or inventory that will be required to operate successfully. Not to mention the franchise fees and royalties that must be paid in order for you to remain a franchise and use the franchise name. Typically, this is a hefty flat fee and a percentage of sales. Add that to the money you spent to buy the franchise and you’ll see how quickly your costs can add up. For a more popular franchise, you will pay millions of thousands of dollars and you will be required to have a set amount of cash and assets to be considered.

It could be years before you even make a profit and you’ll have to work 60 to 80 hours a week. Even when you make a profit, it could be a very small margin. All those long hours he puts in could be for very little pay.

With a home business you eliminate all those variables. It has a low initial cost and you can work at the pace that best suits your current situation. Like me, most people started while they still had a job. There are no additional overhead costs other than what you already have at home and no employees need to be hired. You won’t have to worry about traveling to a physical store every day or what you’ll do if you find time to go on vacation. With a home business, you can work anywhere you have access to the Internet.

You will not have to pay any franchise fees and you will be able to make a profit much faster. Your earnings will be higher and you won’t have to work those 60 or 80 hours a week. The differences are tremendous and the risk is much, much less.

That said, it’s important to do your research. As we’ve outlined here, it’s easy to see why starting a home-based business can be a much better option. I’m not saying the franchise is a bad thing. If you’re thinking of opening a store, make sure you’re prepared for the challenge ahead. The same goes for home businesses. Remember to weigh the pros and cons and educate yourself. Making an informed decision and working hard will contribute to your success.

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