Running a successful business today requires extensive knowledge, skills, resourcefulness, and more. With 20% of small businesses failing within the first year and about half shut down after five years, getting help from seasoned and savvy professionals may make the difference between grand success and utter failure. Luckily, by investing in a franchise, FranNet found through a survey of 1,260 franchises, that 91.2% of the franchises were still in business after two years.
Understanding how the franchise model overcomes some of the biggest challenges small business owners face not only equips them with resources, processes, and strategies that will unleash their potential and vision but also offers entrepreneurs a vast and vibrant network of other owners both locally and nationally to help along the way.
5 Biggest Challenges for Small Business Owners
Although there is flexibility, freedom, and autonomy in being your own boss instead of working in Corporate America, there are some significant challenges for small business owners that can fundamentally affect your short- and long-term success. Here are some of the most challenging:
1. No Time and No Life
From working 9-to-5 and having a predetermined work schedule to being “open for business” almost every hour of every day with an unlimited to-do list is a sizeable challenge entrepreneurs face. There never seems to be enough time, and owners often must wear multiple hats, from CEO to accountant to customer service representative. This can result in a poor work-life balance and make business ownership feel overwhelming.
2. The Competition Is Brutal
In today's hypercompetitive business landscape, small businesses face fierce competition from established corporations and other small businesses. To stand out in a crowded marketplace, small business owners must differentiate their products or services, build a strong brand identity, and effectively communicate their unique value proposition to customers. This can leave business owners with an intense feeling that they’re fighting for survival every day, especially when their competitors are experienced and established in the community.
3. Multiple Marketing Challenges for Small Business Owners
Small businesses often operate in highly competitive markets, facing competition from large corporations and other small businesses. Consequently, many small business owners face marketing challenges on all fronts because they don’t know the best way to reach their target audience or build their brand from the ground up.
With so many options, many of which can be very costly, knowing what to say, how often, and on what platform or channel presents quite a challenge.
4. Employees Leave, No Matter Their Pay
With the revolving door we know as today’s workforce—where the average employee stays at their job 4.1 years—your employees may still be quitting at a rapid rate. Managing human resources and building a talented team is another significant challenge for small business owners, from recruiting and hiring employees to training, motivating, and retaining them. These essential tasks require effective leadership, communication, and HR strategies to build a cohesive and productive team.
5. The Pricing Menu Is Not Competitive
Setting competitive pricing is a challenge for all businesses, especially for small companies that compete against larger competitors with greater resources. If your prices are too high, you scare off customers. If they’re too low, you don’t maximize your earning potential. Unlike larger competitors who may benefit from bulk purchasing or established vendor relationships, small businesses may not have access to the same discounts or preferential pricing than larger ones do.
Franchising as a Solution to Small Business Owner Challenges
Fortunately for those who are looking to open a business, franchising is available to you, offering you the best of both worlds.
Franchises Can Help Business Owners Realize These Significant Advantages:
Potential For A Better Work/Life Balance: Because franchisors have “been there and done that,” they know how to manage their most valuable asset—their time—and can help business owners turn their bumpy business-building experience into a smooth operation. Franchisors have a collection of highly trained and experienced business professionals ready to help you navigate the rocky terrain of business ownership so you can control your schedule more effectively and get your free time back.
The Power of Franchise Networking and Support: Franchisors offer great networking opportunities with experienced owners in your industry across the country interested in helping you business grow. When franchise owners learn from each other, they build a trusted network that enables owners to outlast and outperform their competition. Since each franchise delivers the same product or service and works towards the same goals, when you succeed and provide excellent service, it increases the value and reputation of the overall brand.
Access to Established Marketing Strategies: Franchisors have extensive resources for marketing on a national and local level. Let their experts help you through the marketing maze because they know which strategies are more likely to work and which may not. You’ll learn about the best automation tools, targeted marketing, and more to help your business get noticed. Additionally, as a franchise, you’ll have a nationally recognized brand, which can make marketing that much easier.
Learn How to Improve Employee Retention: Retaining your employees is about more than just a paycheck. The challenge is creating an environment where your employees want to work for you and where they see the opportunity to grow and advance. Franchisors provide comprehensive training and development programs for franchisees and their employees, ongoing skill development workshops, and leadership training for management staff. These benefits help you develop a vibrant business culture that nurtures and retains your current employees and attracts the best new talent.
Utilize Effective Pricing and Service Models: Price and value are two vastly different concepts. Your competitors may be offering the lowest price in town to generate business, but reliable and repeat customers will pay quality prices for superior work and service. Because franchises are so experienced and savvy in their unique markets, they can offer business owners the knowledge and strategies to produce quality work and services at discounted prices. Franchises also have the inside track with vendors that leads to shared expertise and even vendor discounts.
Reach Business Ownership Success with Less Stress
It only makes sense for business owners to maximize and synergize knowledge, talent, and skills with a franchisor whose interests align with theirs. A franchise is not the right fit for everyone, but thousands of people have taken advantage of investing with the right franchise and reached greater success with their businesses.
For business owners who are seeking how to increase performance, how to expand opportunities, and how to improve cash flow small business efficiency, determining if franchising is for you is a critical first step.
Contact Neighborly® today to learn about franchising, and how to pool your talent and resources with those already excelling in your industry.
