If you find yourself in the market for a small business acquisition any time soon then you are undoubtedly going be faced with many important decisions; not least the choice between investing in an existing independent business or whether to explore the world of franchising.

Both of these business models can be extremely profitable and successful investments if wise decisions are made and the business is well managed and run and it largely comes down to your personal and business objectives. In this article we look at some of the elements that you may need to consider when deciding between a small business or a franchise. Freedom versus control

The freedom to operate and develop the business as you see fit can vary widely from one franchise to another. Products, services, customer care policies amongst many other factors need to be considered as with many franchises, these elements will be dictated by the parent company that is franchising the business to you. On the other hand the benefits of a franchise situation are many, including a proven business model, an existing customer base and established marketing channels and even legal support. An independent small business simply cannot compete in terms of existing resources and the support of the franchisor, but they do retain the freedom to develop their own products, product lines, policies and pretty much any part of the business to suit their goals and objectives. At this stage it?s important to balance the pros and cons of true independence against being under some control from a third party.

Considering operational resources

With a franchise business you are often rewarded with access to an existing supply network of everything from products, equipment, sales and marketing support, supply chain management and operations. It can make it very easy and cost-effective as much of what you need to run can often be provided as part of the initial franchise agreement.

For example, In the medical industry a popular franchise opportunity might be setting up a dental practice. A corporate dentistry might need to fund a lot of their running costs, marketing, expensive insurance costs and expensive dental equipment, whereas a franchise dentistry would benefit from the negotiating power of a larger organization to help bring insurance costs down, they could access the buying power that would reduce dental equipment costs and they would also benefit from the association of an established and trusted brand name.

Setup costs

Typically, you can expect a franchise owner to have significantly lower set up costs; their initial investment plus operating costs, marketing, products or equipment and so on. It?s wise to look at scalable projects at this point so that you don?t have to spend too much upfront but rather stage certain costs such as rebuilds and expansions. Franchise owners may not have those initial setup costs but you must factor in potential commissions or royalties paid to the franchisor. It generally comes down to your personal and business goals, long term costs verses short term investments and exactly how much control you can stand to relinquish.