You may have considered the prospect of starting your own business many times before. The thought of being your oen boss, calling the shots, being responsible for your financial rewards is very alluring. You may have had the drive, the experience, and the financial resourfesnecessary to succeed. The only thing stopping you was figuring out what type of business you should start. The following section discusses the three most popular ways that people become entrepreneurs. Which option is right for you?
Starting a business from scratch can be overwhelming for a new entreprenerus. If you have a good business concept and are willing to wok hard to build it up, it may be best for you to start your own business. However, if you want to get a head start and avoid some common pitfalls of starting a business, then buying an existing business or a successful franchise could be a wise choice.
If you decide to start your own business, you will need to devote time ti develop your project. One of the main benefits of entrepreneurship is to indulge in exciting work that we are passionate about. Unfortunately, passion is not always a source of profits. Research, research, research! The more information you gather on the potential demand of your product or service, on the competition and on the future customer needs, the more you are to succeed.
STARTING FROM SCRATCH
- You are your own boss;
- Unlimited potential for wealth;
- Challenge of bringing your product/service to market;
- Opportunity to develop your own business policies and practices;
- Personal satisfaction of accomplishment
- Cash flow fluctuation;
- Lack of support;
- Sole responsibility;
- Limites resources and possible gaps between business and technical skills;
- Difficulty financing.
If you choose to buy an existing business or a franchise, you will benefit from the work that has already been done increating the brand, building relationships with customers, improving operational processes and acquiring assets. You can generate profits faster and funding is easier because the business model has already proven itself. On the other hand, the initial investment is often higher that starting your own business. An economic analysis is the first step. Assess its strengths, weaknesses position relative to the current market and its competitors.
BUYING AN EXISTING BUSINESS
- Already up and running;
- Potential for immediate salary;
- Established company reputation and customer base;
- Existing facility, equipment and trained employees;
- Established track record on which to base projections.
- Signifant research required to identify and assess viability of business;
- Business value may be difficult to determine;
- Assets may be overvalued;
- Difficulty to begin slowly or try business out;
- Reduced feeling of personal satisfaction from creating and building a business;
- Possibility of inheriting employees who do not share your vision;
- Changing previous practices maycreate customer resistance;
- Difficulty financing.
BUYING A FRANCHISE
- Easier to access financing;
- Access to quality training and ongoing support;
- Established concept with reduced risk of failure;
- Use of well-known trademark and trade name;
- Access to lower cost and possible centralized buying;
- Fewer start-up problems;
- Access to extensive advertising.
- Onerous reporting requirements;
- Termination policy of franchisors may allow little security;
- Possible exageration of franchise advantages;
- Franchisor may saturate your territory;
- Cost of ranchise and other fees may reduce your profit margins;
- Inflexibility due to restrictions imposed by franchisor;
- Cost of supplies and materials may be more expensive.