1. What, exactly, is my business idea? Is it feasible? 2. What type of business is right for me? What industrydo I want to get into?
3. Do I want to run a business that’s similar to many existing businesses, or do I want to innovate? 4. Do I want to start a new business, take over an existing one, or buy a franchise? 5. Do I want to start the business by myself, or do I want company? 6.What form of business organizationdo I want? 1. Starting from scratch . This is the most common—and riskiest— option. Advantage : You start with a clean slate and build the business the way you want. Disadvantage : It’s up to you to develop your customer base and build your reputation. 2. Buying an existing business . This option is not as risky as starting a business from scratch, but it has some drawbacks. Advantages : You’ll already have a proven product, current customers, active suppliers, a known location, and trained employees. Disadvantages : It’s hard to determine how much to pay for a business; perhaps the current owners have disappointed customers; maybe the location isn’t as good as it used to be. 3. Buying a franchise . Under a franchise setup, a franchiser (the company that sells the franchise) grants the franchisee (the buyer) the right to use a brand name and to sell its goods or services. Advantages : You’ve
bought a prepackaged, ready-to-go business that’s proven successful elsewhere; you also get ongoing support from the franchiser. Disadvantages : The cost can be high; you have to play by the franchiser’s rules; and franchisers don’t always keep their promises. EXERCISES 1. (AACSB) AnalysisIf business ownership interests you, you can start a new business, buy an existing one, or obtain a franchise. Evaluate the advantages and disadvantages of each option. Which option do you find most appealing, and why? Describe the business you would probably start. 2. (AACSB) Analysis How would you like to spend your summer collecting trash in a used pickup? Doesn’t sound very appealing, does it? Would you quit college to do it full time? Probably not. But that’s exactly what Brian Scudamore did. And he got very rich doing it. His summer job turned into the company known as 1-800-GOT-JUNK, one of the fastest-growing franchises in the United States and Canada. Go to to link to the Web site and learn more about the company. After looking at the Web site, answer the
- Spring '08
- Business, Management, business owner, Small business Administration