If you are contemplating starting your own embroidery business, the range of options may seem overwhelming. One of the first and most important decisions you must make is how your business will be structured. Will you incorporate your business as a sole proprietorship, will you have partners, or will you enter into a franchise situation? Each type of business structure has benefits and drawbacks. Those benefits and drawbacks will be our topic for today.
First of all, let’s talk about franchising. Franchise organizations like Embroidme can be a great way to get your business off the ground while reducing some of the risk to you. Choosing the franchise option means you will most likely get help with site selection, training on machines, marketing materials and a network of your peers with whom you can trade referrals and exhange information. Franchising can be a great way to start a business without taking on all the risk yourself.
While franchising has many great qualities, it also has a few drawbacks. Most franchise companies have pretty strict rules about what their franchisees can and cannot do. You most likely won’t have much leeway when it comes to developing marketing materials, or in regard to what products you sell. Franchising works best when all the locations are similar and people know what to expect. If you’re looking to express your individuality, a franchise might not suit your needs.
Another option for starting a business is a partnership. Partnership can encompass two or more people, and can be a good way to spread the risk. You should always have your partnership agreement drafted by a lawyer, and that agreement should clearly spell out the responsibilities of all parties. A partnership is may be a good fit if you want a bit more freedom in how your business is managed and portrayed, but you don’t want all the responsibility.
Probably the biggest drawback to starting a business with a partner or partners is that their thoughts and theories about how a business should be run have equal weight with yours. Partnerships have been known to dissolve into turf wars if partners disagree too much. A partnership also requires splitting the profits from the business.
A third option for forming a business is to fund the start up on your own. If you put in all the money than all the rewards and profits are yours. If you’re the sole owner of the business than you are the only one who needs to be consulted when there are decisions to make.
Strangely enough, the pluses of being a sole proprietorship are also the minuses of this form of business ownership. If you put all the money up to start the business, than the entire risk of starting that business rests with you. If it fails, you will bear the entire brunt of any lost money. You will also bear the brunt of the work. If you’re the sole boss and sole decision maker, than you’re responsible for every garment that gets embroidered and every decision that gets made. That can be overwhelming at times.
Each type of business start-up has both benefits and drawbacks. The best way to decide which method will work for you is through self-knowledge. If you can truthfully look at your own strengths and weakness and accurately assess your comfort level in regards to responsibility, decision making and monetary risk, the right start-up choice for you should become readily apparent.