One of the first choices potential shop owners face before getting into the automotive industry is deciding whether to create their own business or operate a franchise. There are pros and cons for each of these paths, which can play a critical role in the shop's success or failure.
If you decide to start your own shop, you're responsible for designing every aspect of it. You have as much freedom as you can handle and all the responsibility and pressure that comes with it. For those that decide to run a franchise, there's less freedom but much more assistance every step of the way.
Understanding the advantages and disadvantages of these options is necessary to make an informed decision that will significantly influence any auto professional's career.
Pros and Cons of Starting an Independent Shop
The primary benefit of starting an auto shop from scratch is the autonomy to decide every aspect of a shop, from its name to its marketing plan. There's no one to restrict the decision-making process. Shop owners can be as creative as they like in selecting their image, branding, area of specialization, tooling and more. Such autonomy is great for visionaries who can differentiate themselves from the competition.
When you choose to be your own boss, you take on the responsibility for everything that happens in your business. This means that if something goes wrong, you can't blame anyone else. Moreover, there are not many people to turn to for help when you need it.
Starting a new business requires overcoming various challenges, such as securing capital, financing equipment, and shop space, and running operations efficiently. New shop owners commonly run into these difficulties.
One of the biggest challenges is to find and attract a loyal customer base. It may take years to build a customer base that will remain loyal to your business.
Pros and Cons of Franchising
In some ways, the challenges of starting a brand new auto shop business are the best part of franchising one. While the benefits of completely owning your own shop are the shortcomings of being a franchisee. Operating a franchise comes with several advantages.
One of the main benefits is the vast assistance provided to new shop owners throughout the process. From marketing to maintaining operations, franchises have well-defined business plans that make it easy for new owners to adopt their practices and techniques. Another advantage of operating a franchise is that it is an established business with its own customer base that people are already familiar with. This familiarity helps in bringing in more vehicles to work on.
On the other hand, creative people might feel constrained operating a franchise because of the need for more autonomy. Since all aspects of operating the business are already laid out, there's not much room for ingenuity, innovation, and implementation of new ideas without approval from the corporate higher-ups. Franchises also take a cut in the profits by requiring franchisees to pay fees, typically monthly, for using their names, logos, and brand. Royalty payments may also be required.
Obstacles Faced in Both Paths
Both options have common challenges for entering the automotive business as a shop owner. Both franchise owners and those starting brand-new auto shops need to secure funding to launch their businesses. Although starting a brand new auto shop requires more funding than buying a franchise, some franchises can still be costly for owners. Nevertheless, banks and other financial institutions offer programs to expedite funding for new business owners, which can be applied to both franchises and auto businesses started from scratch.
There is another obstacle for both sides when it comes to finding, recruiting, and retaining skilled workers. However, there are ways to overcome this obstacle. Auto shop owners can collaborate with community colleges, community centers, and local high schools to attract and retain talented workers.
A Work in Progress
It is important to consider the pros and cons of starting an independent automotive business versus a franchise. Starting from scratch provides more freedom and room for creativity, but lacks the support network that comes with owning a franchise. On the other hand, a franchise provides a strong support system, but owners may have limited autonomy in daily operations.
No matter which option you select, it's crucial to offer customer incentives to ensure a steady flow of vehicles in your shop. This will help you stay in business for the long term. When you're ready to make the most of your business, reach out to Shopmonkey and learn how its software can support both franchise and brand new shop owners.
