This is the final installment in a four-part series on the most popular franchise types: quick-service restaurants, retail and automotive franchises, personal services, and business services. Although the franchise world is full of options for just about every interest and background, these four types of franchises are the heavy hitters when it comes to industry share. This series breaks down the advantages and disadvantages of each type, so you can make an informed decision about whether one of these options is right for you.
Business Service Franchises: Growing Your Business by Helping Others Do the Same
While personal service franchises are B2C (business-to-consumer), business service franchises are B2B (business-to-business). In other words, with a franchise of this type, you’re a business serving businesses. It’s a large sector of the franchise world, with more than 650,000 employees (the most of any franchise type) and the third-largest economic output, at $106B.
A business service franchise puts you in the unusual position of growing your own business by helping other people to grow theirs. While you might serve businesses of any size, you’re likely to have a lot of small- or medium-sized businesses on your client list. Businesses of this size often use B2B franchises to provide services they’re too small to handle in-house. For many B2B franchise owners, their favorite thing about the job is this opportunity to connect with and support fellow entrepreneurs.
Business Service Franchises: The Advantages
Many people look to business service franchises because of the variety in the industry. Options include payment processing, tax preparation, commercial cleaning, IT services, fleet services, coaching and training, print and design services, and more. In other words, regardless of your corporate background or current interests, you can probably find a B2B franchise that suits you.
In addition, as with personal service franchises, business service franchises often have the advantage of lower setup and operating costs. Some options, such as print services, require a brick-and-mortar storefront. Many others, however, allow you to base yourself at home or in a small office that won’t cost a lot to rent. Even franchises that involve special equipment (such as food vending) can often be operated from a home office, with your own basement or a rented space used for storage.
Business Service Franchises: The Disadvantages
Some business service franchises offer services that companies might choose to bring in-house as they grow. For instance, small businesses might outsource graphic design or IT services in their early stages. If the business grows significantly, however, they often hire staff to take on those duties. Other B2B services, such as food vending or corporate catering, might get cut or reduced in an economic downturn. You can avoid these issues by choosing a franchise that offers an essential service or a service that companies are less likely to bring in-house. These include options such as cleaning, HVAC maintenance, and fleet services.
As with B2C franchises, some B2B franchises also have a high barrier to entry. Services such as food vending or commercial cleaning can require specialized equipment. Other B2B services–such as payment processing and tax prep–are highly regulated. You may have to hire highly skilled employees with certain certifications or licenses, which can drive up labor costs. That doesn’t mean you should avoid these businesses, however. When researching these franchisors, just pay careful attention to expected costs and revenue. Make sure the margins are not too narrow for your comfort level.
The Inside Tip
Business service franchises offer the most direct connection between corporate experience and franchising. They can be the perfect fit for people who like interacting with other businesspeople and who are comfortable dealing with corporate norms and business processes. If you like the idea of using your corporate expertise to benefit yourself and your family, rather than an employer’s bottom line, I highly recommend investigating this type of franchise.
Think a business service franchise might be the right choice for you? Don’t try to sift through all the options on your own. Schedule a call with me, and I can help you find the perfect fit for your particular skills and goals!
No responses yet