Pros and cons of franchises under 10k
Buying a franchise is becoming an increasingly popular way of going into business. For many people, it is the idea of giving up their corporate job and enjoying the freedom of becoming their own boss that motivates them.
For others, it may be looking for a new source of income following redundancy. Whatever the reason, purchasing a franchise can be a quicker, more accessible route into business, particularly with franchises under 10k.
When you buy a franchise, you are buying an established business and a proven system. All of the trial and error or guesswork associated with starting a new business from scratch has already been eliminated. This means that as long as you invest in a proven franchise opportunity and follow the franchisor’s system, your chances of starting and developing a successful business are significantly higher.
Many famous franchises, like the big fast food or hotel chains, require an initial investment of millions of dollars and so are beyond the reach of the average person. Fortunately, there are many franchises that can be bought for $10k or less. You may be wondering whether it is worth buying one of these businesses, so to help you, we have put together a list of the pros and cons of investing in low-cost franchises.
The pros of buying a franchise for 10k or less
It is more accessible. If cost is a limiting factor for you, buying a franchise for 10k or less could be the answer. There are many good low cost investment opportunities out there, which potentially means that you can get started on your own business without the need to take out a loan, decimate your savings or remortgage your property.
It mitigates the risk. Whilst any amount of money should not be taken lightly, investing in franchises under 10k means that you are not exposing yourself to greater financial loss if things do go awry.
It is flexible. Many low investment business opportunities are home-based service businesses, which means that they can be run from anywhere where you have a telephone, an internet connection and a computer. This could mean ditching your commute and avoiding sitting in traffic for hours each day, giving you more time at home with your family.
It also means that you get to choose when you put the hours in. You might want to work around family commitments or simply work when you are most productive. That being said, any new business will make huge demands on your time, especially while are you starting out.
You are part of a network. Buying a franchise means that you become part of a network of experienced franchisees. Many will have encountered the same issues and most will be happy to help guide you through setting up and developing your new business.
The cons of looking at franchises for sale under 10k
Do you get what you pay for? When you invest in a high-cost franchise opportunity, you would expect the franchisor to offer you a superior degree of professional support. For some, this may come in the form of technological support, such as systems to manage customers, accounting or payroll. For others this may mean that they have a formal, in-house real estate department to ensure that you get the best possible location to set up your new franchise business.
When you are looking at franchises for sale under 10k, it is unlikely that you will have access to the same level of support. The best thing you can do, is speak with other franchisees to get an idea of the support offered by the franchisor, and base your investment decisions around that. You may even feel that you already have the necessary expertise and that lower levels of support are not an issue for you.
The brand may not be as well-recognised. With a high-investment franchise, you will most likely be buying an established brand and a well-recognised product. This may not be widely the case with franchises under 10k.
It is more than likely that the reason for the franchise’s low cost, is that you will be helping the franchisor establish the brand. However, with this comes an opportunity. As the brand becomes stronger and the franchise increases in value, so the value of your investment will increase.
Therefore, investing in cheaper franchises is not necessarily a bad thing. You just need to do your homework beforehand, in order to identify the right opportunities.
Are all costs included? One potential pitfall to look out for when purchasing a franchise or starting any business, is that you have taken account of all of the costs. You will need to know exactly what is included in the franchise package and then also take account of anything extra, such as vehicle costs and insurances.
Even though the franchise will cost less than 10k, you may need more than this in total to start and run your business.
Should you consider franchises under 10k?
Franchises under 10k are a great way to start a new business and realise your dreams of becoming your own boss without risking huge sums of money. Only you can decide whether the pros outweigh the cons. Owning a franchise isn’t for everyone; there is a lot of hard work involved, and you are bound by working to someone else’s ideas, systems and rules.
But if that suits you, there is the potential to build a successful business on the back of an already established model, where the marketing and brand recognition is done for you. The key is simply to do your homework, and pick out the right investment opportunity for you.
Browse our list of low cost franchise opportunities and get started with your own business today.