Starting a business can be daunting even to the most seasoned of veterans. The primary focus of any good business owner is to make good decisions. When it comes to opening a business, there are countless decisions to make from even before day one. When should you open? How much should you spend? What kind of business should you open? Should you open one with a partner, multiple, or just go it alone?
All of these are excellent questions to answer yourself, and should be carefully considered before you decide to “pull the trigger” so-to-speak. If you choose rashly, you could potentially lose hundreds, thousands or even hundreds of thousands of dollars.
We believe that anyone can be an amazing business owner as long as they find the right type. After doing some research we’ve collected data for four main types. Each one of these have their own unique advantages and disadvantages, and none of them are a one size fits all solution.
The first type of business is the Sole Proprietorship. SPs are owned by an single person or family, and can be fairly risky to start. These businesses are usually smaller in scale, and are unique to each area. SPs rarely have more than one physical location, and typically start with low or even no brand recognition.
The second type is a Franchise. A franchise is a business that is looking to expand their influence by bringing on other business owners with the same business model. Franchises prove a safer option for business owners to make money by providing them with a proven business model, training, support, and more in exchange for a franchise fee and/or royalty. Franchises are great for investors of every experience level.
The third type of business is a Partnership. Much like an Sole Proprietorship, Partnerships are typically smaller-scale businesses that are typically location-specific. The main difference between a partnership and a SP is the fact that there are multiple owners of the business. Partnerships are usually formed, to combine resources such as time, money, or experience in order to increase their success rate.
Finally, the fourth is a Corporation. A corporation is a business that can be open for investors, called shareholders, to buy into. The business can then use these investments to increase the scale of their business much faster than a typical business. When the corporation profits, a portion of the money made then goes back to the shareholders plus interest in a mutually-beneficial relationship.
As far as which type of business is the best goes… that’s a tough question to answer. Each of these businesses have their owns pros and cons, and are best suited for different types of people with varying levels of experience. Personally, I lean towards owning a franchise, because I’m a cautious person by nature, but what’s best for me may not be best for you.
The best kind of business is always the one that’s best for you. To find out more about which types of business suit you best, check out this Personality Quiz on FranchiseMatchup.com.
If our article caught your interest, and you’d like to learn more about potentially opening a franchise, please reach out to us via the form below so we can talk. We’d love to hear from you!