What Business To Start
Learning REsources
Topic Review
1.The starting point
a.Be observant
i.What does the neighborhood need?
ii.What business isn’t represented here?
b.Look around
i.Other towns/neighborhoods
ii.Books/magazines
iii.Television/internet
c.All new businesses start small
2.Start with what you know
a.Make lists
i.Of what you know about
ii.Of things you are familiar with
iii.Of things you like
b.See what is “hot”
i.Read entrepreneur, business 2.0, or Inc.
c.Visit business trade shows
3.Making changes
a.People change, markets change and you must be willing to change with them
4.The franchise
a.Franchise is a contract relationship between two parties, franchisee and franchiser
b.Fleet Feet, Curves for Women, McDonalds, Singer, and 7-Eleven are example franchises
c.Franchises can be developed from providers of standardized products to more complete selling packages
d.Benefits of franchising
i.Easy to get started
ii.Proven product, advertising material, sales forms, accounting processes, etc.
iii.Identified brand demand
e.Downside of franchising
i.Costs including franchising fee,required inventory purchases, specified fixture (including signage) purchases
f.Perhaps you could start a franchising business
Choosing a business to enter
Transform your hobby into a business or use it as a springboard for other business ideas
a.Be observant
i.What does the neighborhood need?
ii.What business isn’t represented here?
b.Look around
i.Other towns/neighborhoods
ii.Books/magazines
iii.Television/internet
c.All new businesses start small
2.Start with what you know
a.Make lists
i.Of what you know about
ii.Of things you are familiar with
iii.Of things you like
b.See what is “hot”
i.Read entrepreneur, business 2.0, or Inc.
c.Visit business trade shows
3.Making changes
a.People change, markets change and you must be willing to change with them
4.The franchise
a.Franchise is a contract relationship between two parties, franchisee and franchiser
b.Fleet Feet, Curves for Women, McDonalds, Singer, and 7-Eleven are example franchises
c.Franchises can be developed from providers of standardized products to more complete selling packages
d.Benefits of franchising
i.Easy to get started
ii.Proven product, advertising material, sales forms, accounting processes, etc.
iii.Identified brand demand
e.Downside of franchising
i.Costs including franchising fee,required inventory purchases, specified fixture (including signage) purchases
f.Perhaps you could start a franchising business
Choosing a business to enter
- New venture
- advantages
- freedom to define the nature of the business
- can create preferred type of physical facilities
- can take advantage of the latest technology, equipment, tools, materials
- can obtain fresh inventory
- able to select, train, develop & motivate personnel
- disadvantages
- problems in selecting the right business
- unproven performance record in sales & profits
- problems associated with getting resources: location, building, equipment, materials
- need to select and train new work force
- lack of an established product line
- advantages
- Franchises
- definition of franchise
- examples
- advantages
- proven business methods
- training
- established reputation
- risk minimized
- disadvantages
- lack of independence
- continuing obligation
- lack of individual identity
- contract difficult to cancel
- expensive
- Buying out existing businesses
- advantages
- capable personnel are available and working
- facilities (building, equipment, & inventory) are complete
- good/service is already being produced & marketed
- revenues & profits are already being generated
- location may be desirable
- financial relationships have been established with banks and other lenders
- disadvantages
- facilities and product line may be old or obsolete
- employees may have a poor production record or attitude
- relations with unions may be poor
- inventory may have stock that is not selling well
- location may be bad
- financial condition & relations with lenders may be poor
- What to consider
- Why business is for sale
- Personal and career reasons
- Management succession concerns
- One-person management not enough
- What the current business owner intends to do after selling
- Whether demographic factors are changing
- How much investment is needed
- Profits (look at financial statements)
- Outstanding bills owed by customers
- Assets owned (number & quality)
- Why business is for sale
- advantages
Transform your hobby into a business or use it as a springboard for other business ideas