Franchise versus Network Marketing Opportunity: Which Business Model is Right for You?

by Steven Dobson · 1 comment

There are records of substantial success using both business models just as there are substantial records of failures for both business models. Before you decide which business model is best for you, make sure that you have fully researched both, and then you can make an educated decision on the franchise versus network marketing opportunity.

Before you start any new business venture whether is purchasing a franchise or participating in a network marketing opportunity; you must conduct market research to determine if their is a legitimate need for the product or service that you are going to provide.

Franchise – when you purchase a franchise you are purchasing a proven and tested business model. You are leveraging someone else’s product or service and success record. But before you run out and put your hard earned money into a franchise there are a few things you must consider. You’re going to need a prime location to place your franchise and that prime location will go for a premium amount since it is commercial property. You can either rent or purchase the property. Depending on the franchise and the location you can spend in some cases an equal amount on both. With the franchise comes training to make sure that you have the knowledge and skills necessary to operate a successful business. You will also have to worry about employees and the personal and professional issues that are associated with being a business owner. Business insurance is a must to protect yourself from lawsuits that may arise from customers or employees that may be injured while within the confines of your operating location. They are only a handful of the things that you will have to consider when choosing the franchise business model. Start up cost can be in the tens of thousands and go as high as several million depending on the franchise and the location.

Considering the franchise fees, the cost of the prime real estate whether you’re renting or buying, the yearly franchise fee, and all the other expenses you have with a franchise you also have to determine how many years you will have to be in business before you can see a return on your investment. Unlike a job, your work days are longer because you own the franchise and have to make sure that everything is running as planned until you can hire and train someone as a manager to relieve you of some of your duties.

Network Marketing Opportunity – as with the franchise business model you are also leveraging someone else’s product or service and success record. However, unlike the franchise business model, you don’t have to worry about finding a prime location to operate your network marketing opportunity from because you can work from the comfort of your home. You also don’t have to worry about hiring employees because you don’t need any employees when you’re just getting started in network marketing. Every network marketing company provides training for its new representatives, but all network marketing companies are not equal, and not all Network Marketing training is equal. Unlike the start up cost associated with operating a franchise, the startup cost for a network marketing opportunity can range from a few hundred dollars to a few thousand dollars depending upon the product or service.

The most important thing that you get with both business models is leverage. Leverage is the only thing that is going to allow you to realize your financial dreams. Both business models require you to seek additional business skills and further self development in order to run a successful business.  There are similarities and there are differences in both business models. Only you can decide between the franchise versus network marketing opportunity business model is right for you.

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