Forbes Living on Whether to Sell Your Business or Build a Franchise

Your business is booming, and if you sold your company this very moment, you would make a hefty profit on your initial investment. However, in lieu of selling, you could hold onto the business and build your own franchise. Both are options for a successful business owner to consider, and the direction you choose to take depends on your personal plans, your tolerance for risk, and your financial solvency. Forbes Living did a bit of research on this topic and came up with a few things to consider.
Forbes Living on When to Sell and When to Franchise
If you are ready to retire, now is the perfect time sell your company, and in fact, retirement is one of the most common reasons owners are motivated to sell, but it certainly isn't the only reason. Some of the other popular reasons to sell include the following:
Portfolio diversification
Family or personal relocation
Moving onto new opportunities
If you want to keep working and you are not worried about the diversity of your portfolio, hanging onto your business and starting a franchise may be a better option than selling it. Relocating doesn't necessarily prohibit you from starting a franchise, but keep in mind that most businesses fare better if the principal stays near the flagship store. If you are simply bored and ready for the next opportunity, becoming a franchisor could be a great way to mix things up.
Franchise: Expansion with Lowered Risk
Before becoming a franchisor, you need to make sure that you have a model that is easy to replicate. If you cannot teach others to do what you do, the franchise model may not be right for you. You also need to make sure that your model will translate to other markets. Simply because you are filling a niche in your hometown doesn't mean that your brand will get business anywhere else. Look for communities that are similar to yours and research the market there. If it looks good, start working through the steps--the Federal Trade Commission (FTC) has detailed information on the required forms and relevant laws.
Franchising allows you to expand your business without spending as much money as you would opening additional company locations. However, it is still a financial risk. The producers of Forbes Living suggest doing your research and making sure your company lends itself to other markets before you decide to become a franchise.