Businesses For Sale in Cairns

6 Rules to Comply with When You buy franchise Sydney

Businesses For Sale in Cairns

Businesses For Sale in Cairns

Starting a business from scratch can be a challenging journey. There are many different ways to start a business such as franchising, buying an existing business, entering into partnership, or starting a small business from scratch. Regardless of your choice, you must study each technique to know which one is the most feasible and practical given your situation. Budget-wise, franchising or buying an existing business can simplify your initial planning process if you want to open a business in Cairns. But first let’s take a look at the difference between the two different models. Knowing the basics between franchising and buying an existing business will give you a head start in your entrepreneurial journey. In this section, we will give you a detailed difference between franchise and buying a business.

Businesses For Sale in Cairns

Business – Full Ownership but Little Guidance

Franchising and business are two different things. When you buy an existing business, you get full level of control over your assets and finances including the inventory and how you will run it. The fact that you are able to take full ownership of the business, create your own rules, train your employees, and set your own standard is the biggest advantage of buying a business. The only disadvantage of this type of business model is that you take the risk of starting with very little support. You can’t expect the previous owner to train you how to run things.  You may be given the business manuals and touch base on basic information about the niche, but not the level of support you get with franchising. With or without experience, buying a business makes you fully independent. That means you need to take over its control and be in charge of its future. However, without guidance there’s a risk that you will struggle as you figure out the best way to steer things in the right direction.
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Franchise – More Guidance but Less Control

A franchise is a business model where you only buy the right to operate the business but not the ownership. In result, the business owner who is the franchisor lets you use the logo, name, and business model so that you can build the business. However, you will have to abide with the standards set by the franchisor. Your independence is somehow limited by the terms and conditions of the franchise and you cannot deviate in marketing or branding. There are two common forms of franchising such as the following: Product/Trade Name Franchising In this model, the franchisor only allows the franchisee to use the trade name but the former continues to have full ownership of the business.  This is mostly applicable in supply chain management wherein the products are delivered to the franchisee to be sold in his market. Business format franchising The franchisor and franchisee have an ongoing relationship which is a full-spectrum business management. The latter will receive a full business package, including support through marketing plants, training, and seminars. In some cases, the franchisor would help the franchise to look for funding.

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Consider three factors before franchising or buying a business

 If you are wondering which route to go, the following tips will help you determine whether you should franchise or buy a business.

  • Quantify your investment – Assess your disposable income and calculate how much you are willing to up for investment. Your budget is one of the major determining factors when you open up a business because both franchising and buying an existing business comes with a price.
  • Consider your talent and lifestyle – Be more aware of your skills and experience. Knowing your full potential will help you eliminate unrealistic business ventures. For example, if you want to start a business but you don’t have enough skills to get started, you can go for a franchise. Although the control is limited in a franchise, it provides you with ample support to thrive. Moreover, most businesses that are open for franchise have already established a name in the industry which means you won’t have to work too hard in creating a brand name and making your business popular. On the contrary, if you are an experienced business owner, you can buy an existing business.
  • Review the full landscape – Look at the existing infrastructure and business model before making a choice. Ask about contracts, leases, existing cash flow, inventory, and whether the business has outstanding loans. If it is a franchise, research about the background, how many years it has been in the business, the number of branches, and how well it is performing. The more you know, the more you can make a sound decision.
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Businesses For Sale in Cairns

Pick the right franchise or existing business for you

Regardless of your decision which one to go, it all boils down to whether you did your due diligence. Franchising and buying an existing business require ample research so you can understand the business from both a financial standpoint and in the overall landscape. You should explore the following if you are interested in franchising:
  • All existing reports – Put your detective hat on and start digging more information about the business you are franchising. Remember, the status of the business your franchising can drastically affect your future as an entrepreneur. If the franchise is in bad shape, it will drag your investment down. Conversely, buying a franchise that has a good track record and performance will help you maximize your investment to the fullest potential and get a better ROI.

Businesses For Sale in Cairns

  • Understand the terms and conditions – Every franchise is unique. Make sure that you have the right to use the franchise name, trademark, and do business in your area. Find out if you will get training and support. Learn about the associated fees and the rules regarding profit, bad merchandise, product replenishment if applicable, and other nitty-gritty of business.
  • Learn about the franchise contract – Read the contract thoroughly and try to focus on important highlights like sales quotas, equipment, supplies, and inventory. Understand the dos and don’ts when running the franchise and exit rules.
Conclusion Whether you’re franchising or buying a business, make it sure to conduct a thorough assessment regarding the best model applicable for your situation. If you are still in doubt, an accountant can help understand the full costs of operating and business and even help estimate your potential profit. If you want to franchise a business in Cairns, The Local Guys can offer a lucrative business
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