In the last ten years, there has been a marked increase in the number of young entrepreneurs who start their own franchises straight out of college. Low cost franchises can offer special opportunities to these young go-getters that traditional jobs just can’t. Being in business for yourself well before your 30s means that you have plenty of time to get your business on sure footing before you have more responsibilities – like children or a mortgage payment.
Low cost franchises offer a unique opportunity to young entrepreneurs who may not have the capital to invest in a larger ticket franchise business. Getting money for any type of business can be tough these days, but with a short credit history and a lack of capital, funding can be almost impossible for the young entrepreneur. With a low cost franchise, there is less money that you need to come up with in order to be in business.
Another advantage for young entrepreneurs is that many low cost franchises are set up to appeal to younger target markets. For example, computer services, sandwich shops and wedding related franchises all appeal to younger markets. When you take into account pregnancy and young child related franchises, there are even more opportunities for young entrepreneurs to create business in their very own demographic. Having something in common with the target market can help a lot with marketing ideas and making connections. This can be a huge asset to the success of a franchise.
However, starting a low cost franchise under the age of 30 isn’t always a positive experience. There may be drawbacks that an entrepreneur faces as they try to make their business successful. In addition to the problems they may have in obtaining financing, young entrepreneurs are also more likely to gloss over the important parts of business they may not be familiar with. While selling to customers and marketing in the local area may be “easy,” issues like handling payroll and preparing for tax time may be totally foreign. Young entrepreneurs may be tempted to let these important parts of the business slide, which may cause more problems for them in the long run.
The key to having success as a young entrepreneur in a franchise business is to look for opportunities to learn and build your skills. Owning a franchise rather than going out on one’s own can be a big boost to the success rate of a new business. A franchise business will allow a new entrepreneur to enter the market with a safety net. It’s like going into a business with a personal mentor who provides guidance and insight.
If you’re a young entrepreneur considering a low cost franchise, here’s what to look for before you make the leap:
- Learn as much as you can about the nature of the franchise business and evaluate whether you’re willing to work within the system.
- Decide what changes may be possible within the framework of the franchise business in order to suit your local market.
- Evaluate the Franchise Disclosure Document that a franchise is required by law to provide. This will give you a clear view of the profit margin on product lines and how much is being made by other franchise owners.