Many people are unaware of home-based franchise opportunities, which is unfortunate because these are some of the most affordable franchises available; they often enjoy greater profitability per revenue dollar than location-based franchises.
As with any franchise, there are pros and cons, so it’s important to understand what these
are, and how well you can maximize the advantages, while overcoming the disadvantages.
Let’s look first at the advantages:
- Fast ramp-up: Home-based businesses can be ramped up very quickly because you don’t have to spend months searching for the right location, followed by another few months of construction before opening. Franchisees typically launch these businesses within a few weeks of signing their franchise agreements.
- Low start-up costs: Home-based businesses have some of the lowest start-up costs because you don’t have to build an expensive location or buy a lot of inventory. You’ll probably need to buy some office furniture and equipment, and maybe lease a car, but it’s still hundreds of thousands of dollars less expensive than a location-based franchise Low operating costs: Home-based businesses often have the lowest operating costs because you don’t have to pay a lot of money in monthly rent and occupancy costs.
- Lower risk: With location-based businesses, you have to pay rent and other costs, whether you’re profitable or not. With home-based businesses, there are fewer expenses to manage, which helps mitigate your risk.
- Flexibility: Home-based businesses enable you to have tremendous flexibility for managing how your work life and family responsibilities integrate.
Challenges to Consider with Home-Based Franchises
The most significant disadvantage is that, without a physical location, there’s less visibility for customers to find you. This means that you’ll have to do more sales, marketing and community engagement work.
If it’s a B2B professional services business, there will be an ongoing need for outbound prospecting and selling.
If you buy a consumer services business, you’ll need to invest in regular monthly digital marketing to ensure customers can find you… That’s still a lot less expensive than renting a retail location, though!
Another disadvantage is that these businesses often rely heavily on the owner to perform a significant amount of work, making them less scalable than location-based businesses. Some home-based businesses are scalable, though. Strong franchisees grow these businesses to the point where they have enough customers and staff that it makes sense to move to a physical location after a few years.
Is a Home-Based Franchise Right for You?
If you’re curious about what affordable home-based businesses might be suitable for you to run, let’s have a 15-minute call. Book a call now.
Originally posted on LinkedIn
