One of the best ways to diversify your income is to start your own business. However, that can be time-intensive and have the possibility of failure. Another way to be your own boss is to buy a franchise. Here's how to decide.
In the early years of running a business, you may stay up at nights worrying about how you're going to meet payroll. But, over time, once you acquire enough knowledge and experience, you have a good probability of becoming wealthy as a business owner.
By contrast, if you don't make your big move and you remain an employee of some corporation for the rest of your working life, then the best that you can hope for is to not get passed over for promotions and to earn enough to be able to make consistent contributions to your 401(k).
Start Your Own Business or Remain an Employee?
There are advantages when you start your own business — and they often outweigh the benefits of being “only” an employee. There's nothing wrong with working for a company, but it's a good idea to diversify income streams and consider a side business if you aren't interested in going full-time on your own. After all, you don't have the same job security past generations had.
The question is not whether you should become your own boss or remain an employee but whether you should start your own business from scratch or sign up for a franchise. One way to do this is to use a retail franchise where a commercial property scout will find you a great store location that has a high chance of getting a lot of walk-in traffic.
Let's take a look at both sides of the equation:
Start Your Own Business
Let's assume, for the sake of illustration, that you have considerable bookkeeping experience.
The idea of outsourcing your skills to a number of clients might appear to be a good idea. Instead of working for one business, where there is a cap on your income and everything you do is micromanaged, you can work for multiple businesses. You will not only have a chance to earn more, but you will also have the freedom to set your own schedule.
However, one thing you have to remember is that you are not simply continuing your bookkeeping job, switching from one employer to multiple employers. You are now running a business. This means that you have to do more than bookkeeping. You also have to manage a business.
Consequently, you will have to register a business name, buy a commercial office space, and advertise in the local papers. Moreover, if you know how to build websites or can afford to hire a web designer, you can even create your own site and get considerable traffic from Facebook ads.
You will also need to get good at marketing and sales. However, once you become proficient in generating leads and closing sales, you may have a new problem. Instead of a scarcity of clients, you could have too many. Since you will probably not want to leave money on the table by turning people away, you will hire employees. Once you hire employees, you will then have to learn how to administer.
If you can do all this or are willing to learn how, then, you should definitely start your own business. After all, you have a marketable skill and you are willing to learn everything you need to know how to grow your business.
However, what if you don't have a marketable skill? What if you're fairly clueless about marketing and have never sold a thing in your life? And what if the idea of managing your own business without any guidance is overwhelming? If this is the case, you might be better off joining a franchise.
Start a Franchise
When you join a franchise, many of the difficulties of starting your own business either simply disappear or are mitigated.
For instance, a franchise will work for you if you don't have a product to sell or a marketable skillset. It will also make the entire process of running a business — marketing, sales, administration, etc. — easy because you will be in business for yourself but not by yourself. A franchisor will offer you comprehensive training both at headquarters and later on, you will receive hands-on training when you open a store or run the service business.
Whether or not you decide to start your own business or buy a franchise, the upside is huge.
Instead of working hard to make someone else rich, you will be the direct beneficiary of all your long, hard hours at work. So, you should start your own business if you have a product to sell or a service to offer and know what you're doing or willing to learn. Conversely, you should join a franchise if you are unfamiliar with business and need guidance and support in order to have your own successful business.