Robert Corrigan Marketing Blog

What Is The Cheapest Way To Start A Business? Part 1

By 94 Comments

You may well ask how long is a piece of string (11 ¾ inches I have one at home!). Because this really depends on what type of business you want to run. There are several options.

Open a shop, let’s consider the costs, find a business model and research it, find some premises pay out for the lease, stock the premises use your own capital to stock it or get a bank loan if you can. Then there is insurance, rates and utility bills to find the money for. Simple just open your shop and wait for the passing trade to drop in and spend a few quid on the items you have for sale simple.

Well may be not this approach could prove to be very expensive huge amounts of capital tied up in stock especially if no one wants what you are selling plus the added bonus of working 7 days a weeks. If you are not there every minute how can you make any money?

Perhaps an easier way is to buy a business franchise; this has many advantages over going it alone. With a top franchise you are buying into an already successful business model, you will get the support and training you need from a proven business formula.

You may baulk at the price of a franchise but are the very cheap ones worth the investment; unfortunately all franchises are not created equal or indeed offer the same value. Lets take a well know high street brand and a respected franchise Subway.

Why Subway? Well one has just opened in my home town and the shop it moved into was formally a charity shop. This has been fitted out in the Subway corporate image I have no idea how much this has cost but it will not have been cheap.

A subway franchise costs about £6,000 for the franchise fee plus the fitting out of the premises, and all the other costs above. So how much this will cost in the end could be frightening but I saw a figure on a franchise forum listing £120,000.

If the though of preparing all those sandwiches and working long hours 7 days a week is your bag and you have the funds it could be the one for you! NO? How about this?

Clean out wheelie bins, this one is £16,750 now if you charge £6 a bin then you will only have to wash about 3,000 bins to get your franchise fee back! I don’t know about you but I can’t wait to get started on a cold January morning cleaning out stinking bins.

With too many of these franchise opportunities all you are buying is a minimum wage job for years to come. Believe it or not you don’t have to risk your children’s inheritance on the words of Theo Paphitas you can start off for just a few pounds, you can minimise the risk to yourself and you can work the hours you want.

“It sounds too good to be true, but tell me more”.

You can start an eBay business for just a few pounds in listing fees, start by selling the stuff you no longer want or need and use the money you make as your starting capital to purchase some new products to sell. Did you know that you can sell the same products on Amazon? In some categories you will get a better price than you will get on eBay.

To me for the small retailer without a unique selling point and a hungry market the retail model is flawed and you will always be waiting for your customers to come to you.

What about working for yourself online? Easy to use template drive e-commerce packages are available at a very modest monthly cost for most hosting companies, why pay eBay’s extortionate listing and final value fees if you don’t need too when you can keep the profit for yourself. Sound good to you?

Watch out for Part 2 where I show you how to change your whole perspective about business. Rob..

Comments

  1. Hi Rob,

    It is a very good example you are sharing in the post. Some of my friends they want to start their business with franchise shops, but I think the competition of food franchise is too competitive so most of them didn’t last long. However, one of them who started his own business with a small american style resturant, it’s small but very unique. He spend a lot time to make the decration, to select the ingredients, to choose work partners. The traditional physical shop requires a lot of time and money, compare with online business, the cost and time are relatively low, so most of them didn’t succeed.

    Thanks for sharing.
    Connie

  2. Hi Robert

    Who in their right mind would pay 16,750 for a wheelie bin franchise I no I wouldn’t. Imagine how many different businesses you could set up online for that.

    Online businesses are the way forward as more and more people are turning their backs on shops and going online to find what they want.

    Great post and good luck with the challenge

    Regards

    Dawn Kay

  3. I was interested to read this post. I was a glutton for punishment. I was a partner in a restaurant business many years ago. I got out after a year because the hours were gruelling and I had 2 small children.

    I opened a Delicatessen shop of my own soon after that. It was impossible to get into a high street location because Landlords would not take a chance on me as I had no track record. I loved it but it was hard work and very labour intensive. I had enough of that after 3 years.

    Now, many years later I love the freedom of the internet lifestyle.

    Sandy

  4. I have never myself believed in the franchise model, at least not for the one buying into the franchise, it is great for the company running it.

    Ebay companies can be good as well, but there is a lot of competition so I am not sure that is something I would go into. Of course your reference to cross working both Amazon and Ebay might make it a bit safer (that was a new tip to me btw, thanks!).

    Internet businesses are often shoddy and not very well prepared, but if you have a real product and make a real business plan it is a great way to start a business without having to spend much money.
    It does also give you the chance to throw a bunch of “dirt” (ideas) against the wall and see what sticks.

  5. Hi Robert

    I agree with everything you say. Buying a franchise is like buying a job. Whereas anyone can set up an INTERNATIONAL internet marketing online business with no technical knowledge with just a few mouse clicks on eBay.

    I’ve posted a link to this page on identi.ca for you (makes a change from Twitter!)

  6. Hi Martyn, many thyanks for that I appreciate it I had never heard of indenti.ca before. Who waqnts to buy a minimum wages job for thousands of pounds crazy!

    Cheers
    Rob

  7. HI Daniel, eBay is something that I still use but not as much as I used to, the trick is to find small profitable niche markets with only 1 or 2 pages of competition thats really how to take a slice of it.

    Cheers
    Rob

  8. HI Sandy, for me I dont like this 9-5 lifestyle and haveing to be there all the time, this is much better I work when I want to, and I can go away when I want too and evrything is automatic. Simples!
    Cheers
    Rob

  9. Hi Daniel, I agree you have to find soemthing you enjoy because anything will become intolerable if you don’t really like it or are doing this as a job of work that isn’t enjoyable.

    Its about finding your own way.
    Cheers
    Rob

  11. Hi Robert,

    I don’t think I would ever try a franchise business and especially cleaning out wheelie bins! LOL 🙂 Exactly why should someone risk his children’s inheritance and your life completely?! To be honest I think only 1% of all these franchise opportunities would worth your money investing on.

    Making money on eBay is not that risky and ANYONE can do it if knows what he is doing.

    Anyway, I am looking forward the second part!

    Take care,
    Andreas

  12. Hi Robert, A most well written article, I must say! Have you been studying or practicing writing lately? I’m looking forward to your next post for sure. I’m not an active product lister on ebay yet but as soon as I’ve got several blogs running on semi-auto-pilot in a few select niches, I may give it a go. Be well, Steve D.

  13. Hi Rob,

    When you put it like this Rob, I wonder why I bothered to set up my bricks and mortar retail businesses over the years.

    But I can certainly vouch for all the personal costs, not only in monetary terms, but also in unpaid time. Would I do it again from scratch today…no way!

    Hence my online activities to improve my lifestyle for my family.

    Great post Rob and nice to meet you on the challenge.

    Regards,

    Brian

  15. Hey Rob,

    My string is bigger than your string ha ha.

    I would love a subway franchise but only so I could eat all of the stock, so the business wouldn’t be much of a success.

    This post has a wealth of information, god knows how you know so much about it all!

    Online business is more appealing to me for sure.

    Speak soon, Sally 🙂

  16. Hi Robert
    You can make a small fortune in the airline business. Just start with a large fortune. I don’t believe how people can make a good profit with businesses. It amazes me. Pennies here and there. Whew. You have to have something very popular and charge too much.
    Thanks for the post.
    Alex

  17. Hi Robert

    Kool examples about Subway and the Wheelie bins … Yes, offline business do have a lot of cost and risk attached to it. However taking your online business and also creating an offline business from it is what I think I will be looking for in future. Again this is not too different from online as it is going to be a knowledge/info/skill based business …

    Look forward for the second part of this post … have never traded on ebay / Amazon yet, but yeah would like to do it!

    Nice to meet you … all the best for your 100 blog post challenge.

    Cheers!
    Abizer

  18. Hi Sally, how often have we heard that size isnt important and it turns out it is!!! In todays times burger king are offering franchaises to people who want to run 4 shops, at £300,000 per shop with £600,000 to £800,000 pounds liquid assets required To think I set up my online business for £70!!!

    Cheers
    Rob

  22. I would never have thought to open an offline business. I am really not business oriented, but online business sounded so cool I decided to give it a try. I have tried a little selling on eBay. Never tried Amazon.

  23. Hi Rob,

    Wow, who’d of thought franchises would be so expensive.

    The internet is the business model that appeals to me, being able to work from anywhere in the world – There’s just nothing to compare.

    Enjoy the challenge
    Michelle

  24. Hi Rob,
    Thanks for visiting our site at theequest.com.This is Pierre & Pierrette from the 100 comment challenge.
    Your views are well taken.Been there, done that is often the case for many of us on the challenge. I have done the Mcdonalds and franchising thing and you are so right. Their was a time where this model was great but the world has changed and evolved a lot over the last 100 years.
    Just the fact that we as a group is still out here willing to claim our right to our own destiny shows the determination, will and guts to stand for what we really are,Great Individual Human Beings.
    Nice to know you and follow you Rob.
    Pierre

  26. Hi Rob,

    I finally got here!! Woo Hoo Happy Dance. Only a few more blogs to go! I had no idea this challenge was going to be so big! I have been getting lost in blogs for hours!

    I am looking forward to part 2!!

    Franchise businesses are good for people that want to in theory work for themselves however technically they have just bought themselves a job!!

    The advantage of franchises is that most have a head office that will give you support regarding marketing and business operations, however the downfall if it is a business where you need to buy stock you often have to buy from their dedicated suppliers and no one else.

    I love ebay! As soon as this challenge is over I am about to start out on ebay again. I have a credit card that is in desperate need to be paid off and 2 shed and a spare room of stuff that can get sold!

    I am on a mission to sell off everything and have the blasted credit card paid off by Christmas!

    Hope everything is going well for you and you have enjoyed the challenge. I do hope that everyone gets around to everyone’s blogs. It is up tot the contributors now as to the level of success this challenge really is.

    See you back here soon!

    Cheers

    Jacinta 😀

  27. I’ve never been interested in owning and operating a franchise. I have had friends that have looked into it but none ever bought into one.

    My father-in-law operates a Chick-fil-a store but their franchise model is much different. To get into Chick-fil-a you only have to put in $20,000 (at least last I heard). You operate the store just like you own it. You pay corporate a certain percentage, you pay to have equipment fixed. When you decide to leave, you give the store back and they give you your original investment back.

    Too many people get caught up in the idea of having their own business but then they end up working more hours than they did before. The ideal business is to have people operate your business for you.

    I like the online model myeslf and I think I will stick with it.

    Good luck to you!

    – Rick

  28. Hi Robert,

    LOL, I have to chuckle of some of this. Nice post by the way. Did I ever tell you I know a guy named ByTheWay? No? It is true.

    I know folks are giving it their all to finish up the marathon before sundown tomorrow. It has turned to quite the challenge and many many hours have gone into a dream child. I Wonder how many will finish it.

    Nice to meet you.

    Justin

  29. Hi Robert,
    Bring on part #2 looking forward to reading it. I’m still making my way around to all the blogs. I have a lot of ground to cover so I can leave a comment on them.
    Enjoy the Challenge.
    Mike

  30. Now there’s an idea!!! A franchised IM business. I’m not sure if it would work though as there is a different meaning to the word territory or turf when dealing online compared with a physical shop or service provider offline. It might be something worth following up 🙂

  31. Hi Robert,
    I was just looking over franchising recently and you know there are some home-based franchises. Isn’t that something? The only difference is business opportunities do not have stable of a system as franchises so there are pros and cons. However, this post was interesting. I’m beginning to see more and more into the home-based part. Thanks for sharing this discussion.
    Thu

  32. Hi Robert

    Nice to see the comment on the last day of the challenge. Thank you for the comment. I want to read your new post and write a comment there.

    See you later
    FranA
    P.S.
    My new post has a news for bloggers and a suggestion for ebook writers
    for making money.

  33. Hi Robert,

    I cant believe that more people don’t start an internet, or homebased, business. You can get something up and running for less than $20 / month – and even free if you do the correct research. There are millions of customers to online business owners!

    Glad you posted this and positioned it as the CHEAPEST!!

    Great to meet you on the 100 comment challenge!

  34. Hi Robert,
    Those figures for a Subway franchise sounded quite steep… the add-ons are where they get you eh? I’ve always enjoyed eBay so it makes perfect sense for a start-up… Key is to have a product people want or you’re back to square one…. Thanks for the information. Stopped by on my 11th hour visit for the 100 comment challenge.
    Best,
    Elizabeth

  36. Hi Rob

    Can speak from experience about the costs of ‘normal’ businesses. Compared, online is so very affordable for everyone. The one big thing that everyone online has to get a handle on is getting traffic to the site and building a list of customers.

    Regards
    Anne

  37. Rob

    An interesting post which is certainly thought provoking. When you contrast a franchise fee with setting yourself up online there really is no contest as to which makes more sense. Granted you don’t have the support of the “franchisor” behind you but with determination you can actually make more of a success in working for yourself, after all you don’t have to pay a percentage of profits!!
    Ill look out for post 2….

    Tom

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  41. Hi Rob, Subway are indeed a huge and successful franchise with more outlets worldwide than any other franchise. It does require a large investment though, naturally, and there are other cheaper franchise options for those considering the franchising route but don’t have the money to invest in something as large as a Subway. I like the wheelie bin idea… its certainly something that people are always going to need!

    Joe

  42. Hi Joe, its reall what suits you best at the end o f the day there area lot of really good franchise models out there and these don’t have to cost the earth.

    Cheers
    Rob

  44. I think Theo Paphitas would be proud of you post hehe 🙂

    There really is no need to re-mortgage your house to start a franchised business as the sheer number and range available is staggering!

    Cleaning out smelly bins may not be for everyone, but the model applies to many franchises.

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