Marc was facing a point in his life when he felt he needed more than just a paycheck. He wanted a job where he could call the shots, but he had two problems: he wasn’t sure about what business to pursue or where to begin looking. He determined he wanted to own a business, but couldn’t come up with a unique idea and formulating a business plan seemed overwhelming. He finally decided to invest in a coffee store franchise which fit perfectly with his restaurant management background.
For many people the most difficult part of going into business is deciding what the business should be. There are generally three options when considering a business venture: buy a franchise, buy an existing business or begin a business from an original idea. For help in deciding your best course of action, here are the basics you need to know about each.
Buying a Franchise
Buying a franchise business is like buying a pre-fab house – all the components are there for you already. The only decision you have to make is which franchise.
Franchises are proven business models that have an established method of marketing a product or service. The franchise concept is used in a variety of industries including restaurants, real estate, cleaning services and more.
The advantages of buying a franchise include:
Make sure to fully investigate and get a clear understanding of terms like “initial cost,” “initial fee,” and “total cost” along with “cash required,” “initial cash required,” “investment,” “down payment” and “equity investment,” as they may mean different things in different offerings.
Buying an Existing Business
Buying an existing business has some of the advantages of buying a franchise, but without some of the headaches of dealing with the franchisor. However, full responsibility now falls squarely on your shoulders without any backup or support.
A few things you should consider before buying an existing business. Do thorough research and due diligence on the business, consider your funding options and the information you will need to obtain, and most important of all, get professional assistance with the negotiation, valuation and purchase process.
The advantages of buying an existing business include:
Starting a New Business
While this route may be the most personally satisfying of all, it is also the toughest. Starting a new business from scratch allows you complete freedom to decide what you want to do and how to do it; however, it also means the responsibility is on you to do everything from the financials to developing marketing and supplier relationships.
The advantages to starting your own business:
The disadvantages to starting your own business:
By: Barbara Poole Employaid, Inc.