For many people, their dream job is to be able to work from home. Being a small business owner offers a wide array of freedoms and working from home gives the opportunity for more time with family. While it can be difficult to start a business from scratch, many budding entrepreneurs look to buy-into home based franchises. In 2011 an article by the Wall Street Journal looked at the growing industry of home-based franchises, which were expanding at a rate of 7% per year. What the Wall Street Journal found was that, while home-based franchises offered lots of opportunity, there were often hidden downsides.
Part of what makes these franchises so attractive is certainly a great opportunity, but also affordability. Most companies advertise franchise fees below $50,000, touting their relative low start-up cost. But, the buyer should always beware of hidden fees and expenses. Most new business owners don’t think to budget for monthly technology and marketing fees, travel costs to training sessions and conventions, purchasing of sales leads, or renting storage space for their wares. Some companies also take a percentage of sales in royalties!Also, many people have a mistaken notion of how much work goes into running a home-based business. While the explosion of information technology in the last decade has done much to facilitate communication with customers and clients, much of the time you spend on the business is actually still spent outside the home, “pounding the pavement” by chasing leads and holding meetings.
Anyone looking to get a fresh start in life by owning their own home-based business should carefully examine all the options. While franchises offer good opportunity, other home-based businesses can provide just as much profit potential without the hidden costs and fees. Look for companies that offer to handle some of the “heavy lifting” for you, such as product shipping and developing marketing materials. If that business offers a large network of support, that’s even better.
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