When it comes to business, there are plenty of options at your disposal. You can opt for buying, starting a new one or buying a franchise. If you do not know what is the right one to choose. Here are some of the advantages and disadvantages of business opportunities to help you make the right decisions.
Purchasing an established business
Buying an existing business gives you some degree of comfort that you would not find in a new venture. The company has a real financial and operational history. The company's account allows you to learn from business success as well as its mistakes.
You will not have to do a trial and error process. Everything is in place from the operational processes, employee base, and vendor and customer relationships. The current company owner has to be in the business during the transition period. Keep in mind that it is not easy to find the right business to buy. You can use your experience to help you make the decision.
Pros
Owner transition
Known quantity
Control of strategic direction
Ability to review the company history
Cons
It may be hard to make significant changes
It can have ownership transfer issues
Hard to get the right opportunity
It may have hidden issues
Buying a franchise
Purchasing a business franchise gives you a compromise between buying an existing business and starting your own business. Franchisors have a business plan for the franchisees. It has guidelines that business owners have to follow. The franchisor can help you obtain the required financing.
You will get training and operational assistance. Franchisors provide the franchisee with an incentive-the franchisor receives a royalty fee depending on the franchisee's profitability level. However, the franchisor will assist in exiting franchises and new franchises. You get the support you need when getting started with the franchise.
Pros
You get step by step guidelines
Financing is available
You get training guidance
Get the help from other franchisees
Cons
Have to pay a royalty fee
Operational boundaries limited industry choices
Starting from scratch
Starting a business from scratch gives you more flexibility. You will be able to control different aspects of your business. You create your business specifications. You will direct all the details of the business branding, positioning, choosing the location, locating vendors, marketing, and employee base. It is a suitable option for someone with a specific idea for their business.
The most significant hardship for this kind of business is financing. You will need to look for funding from angel investors, traditional financing sources, or buy Wyoming shelf corporations to access funding.
Pros
Higher return
Control all the decisions
A good option when you have a business idea
Cons
Financing
Uncertain formula
Tough for the inexperienced
There you go, you can choose to buy a franchise, start from scratch, or buy an existing business. You can go ahead and select the company you want to focus on. Make sure you do market research to find the best company that will allow you to become successful.
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