A survey in 2020 showed that a staggering 64% of the UK workforce wanted to start their own business. And recent analysis of Google search data revealed a big increase in the number of people planning to start their own business, with a new study of UK trends based on Google search data showing that the number of people considering starting a business has increased since the pandemic.
This research by Novuna Business Cash Flow, analysed the most searched for queries about starting a business. The survey then compared the data from pre and post-pandemic, with results showing that monthly searches for how to start a business increased by 36% between March 2020 and January this year.
Yet, despite regular reports that a sizeable number of Brits would like to have their own business, we don’t necessarily see those plans coming to fruition. And the stats for business failure by start-ups show that nearly 50% of new businesses fail before they are 5 years old.
So it probably isn’t surprising that, although lots of people want to start a business of their own, many of them do not go ahead.
But buying a franchise could enable these ambitions to be realised in a much less risky way, with support and training, so perhaps many are missing out on their dream of owning their own business due to the fear of failure.
According to a survey by CBInsights, here are the top reasons why stand-alone businesses fail and for each one, let’s take a look at how buying a franchise instead could reduce those risks:
42% of startups fail because there is no market need for their products or services, 17% failed because of a poor product offering and 17% failed because they lacked a business model.
It is not enough to have a great idea; you need to be sure that other people will want to buy what you are selling!
With a franchise, you are buying a tried and tested format which has already proved that there is a demand. You should be able to see other franchisees operating in different areas and the franchisor will have piloted the operation to get any problems ironed out before recruiting franchisees. There should be evidence that there is strong demand for the product or service and a blueprint to follow to ensure that the business can be successfully launched.
29% failed because they ran out of cash.
As part of the franchise vetting process, you will normally be expected to put together a business plan and work out how much working capital you need. This is an important step which many business founders either omit or do not spend enough time on. It can take some time to build up a new business, you will need to market your services to potential customers, you may need to pay staff and premises costs and it is possible that some of your customers may not pay you immediately.
The business planning process can seem daunting, but your franchisor should help, with templates to take you through it step by step, enabling you to plan where your customers will come from, decide on marketing budgets, and build a ‘roadmap’ to follow as you launch your new venture. Franchise business plans should be based on the previous experience of the franchisees who have already launched, as well as the franchisor’s pilot trading history so there is a solid foundation for you to build on.
23% failed because they didn’t have the right team running the business.
As part of the franchise, you will be provided with comprehensive training in all aspects of running your franchise business. In addition, some franchisors also provide training for your staff and help with the recruitment of suitable staff which will help you to get your team up and running effectively at the outset.
18% failed because of pricing and cost issues, 17% failed because of a poor product offering, 14% failed because of poor marketing and 14% failed because they ignored their customers.
All of these issues can be overcome with proper planning, training, regular reviews and checking on progress against plan and, guess what? Yes, the franchise structure does just that, making sure that you stay on track as you build your business.
You should receive regular reviews from your franchisor and their team who will provide support to get you back on the right trajectory if your new business isn’t quite where it should be.
One of the mottos in franchising is ‘You are in business for yourself but not by yourself’ and this above all is what makes a franchise operator much more likely to succeed than a stand-alone new business owner.
So, if you have always wanted to take control of your career and run your own business, make sure you take a good look at the franchising opportunities available and give yourself the best chance of success!
