In either case, they exchange money which they need for knowledge which they also need. This is a wise trade, since a small mistake made early can compound to a big problem later, but it is costly. Not to mention the sole الإقامة الذهبية في الامارات the competitor down the street for guidance on how best to organize his/her store. So like a person entering a dark room, they must feel their way carefully or they will trip over what they can’t see. Even with care, ignorance is not bliss and can cost the owner dearly… maybe cost the enterprise to fail.
Risk: The new businessman has “tied up” in the venture several thousands of dollars which they cannot afford to lose. Also, hundreds or even thousands of hours of their lives invested as well… which in time can never be recaptured. Look at what happened to Hostess, maker of Twinkies and Wonder Bread.
As you can see, the traditional small business venture can run upwards of tens of thousands of dollars with more “work” involved than having a job. You simply bought yourself a job with the business.
Franchising, on the other hand, is that you plug into an already proven system. People think you are “buying a franchise”, but actually you invest your assets in a system to utilize the brand name operating system, and ongoing support. Think of one of the largest franchises of our time, McDonald’s. People who buy a McDonald’s franchise buy into the system already in place of producing Big Mac’s and Filet o Fish without having to “reinvent the wheel”. All you have to do is follow the “system” and your franchise will be successful, so they say. But the desire to “be my own boss” is not fully satisfied by a franchise.
Franchisees cannot think of themselves as an independent owner. If they do they will be tempted to try to change the system. Does Mickey D’s sell hot dogs at all? Of course not! The home office does not permit anyone to “tinker” with their formula. The franchisee owns the assets of their own franchise, but is licensed only to run someone else’s business system. The desire to become a franchisee is grounded on belief that they can be more successful using someone else’s brand, and operating according to their methods, than they would be if they opened up their own independent business and competed against them.
The problems with most franchises like McDonald’s, is that: it costs substantially more than a small business, there are royalty fees (usually 5-10% gross profit), loss of personal control… need to quit your full time job and be “locked in” to suppliers chosen by the franchisor, the inability to will your business to your family, a one-sided contract drafted by franchisor that may not fully protect your territory and interests. However, a franchise allows for: opening more quickly, developing a profitable customer base faster, has less risk, national advertising presence, built-in name recognition, strong support system that can be called upon for advice, readily identifiable trade name and goodwill associated with it, centralized, and collective buying power.
Now that you understand the differences between the two, what we need is a home based business that can adapt the best of both worlds: a way to generate full-time income with part-time work, a system that produces residual income that keeps coming in although one’s advancing age eventually prevents putting in much, if any, time.
More and more companies are entering forms of innovative cooperation with outside marketers. Reducing their own in house personnel has prompted them to enter strategic business alliances or joint ventures in which two or more business entities help each other. Since the 80’s, three powerful trends have converged.
First, threatened by corporate layoffs, highly capable men and women are looking for ways to diversify their income. Quite a few have asked themselves, “why go back to a corporation, even if I can find one to hire me, and risk being cut by the same layoff axe in a couple of years? Why not become an Independent Contractor?”
Second, not everyone laid off was “dead wood”. When companies cut their ranks by tens of thousands, they also cut thousands who were productive. They need to hang on to the productivity of the people they did not keep. So they started scrambling to find Independent Contractors to reach their market
Third, since the early 90’s, the introduction of the personal computer and soon after, the internet have allowed small, part-time businesses with few or no employees to compete on a level playing field with anyone in the world. Some of the smartest businessmen in the world have found a unique way to harness these trends to their advantage.
This is where MLM and e-commerce come in. Successful business models that harness the power of the internet and e-commerce along with the concept of independent contractors has made MLM companies a major power house in business today. Companies like Avon, Mary Kay, Herbalife, Amway, Melaleuca, Primerica, Pampered Chef, Ambit Energy, and many others have all realized the top 20 reasons for non-traditional business.