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Ways of Becoming a Business Owner

Thread title: Ways of Becoming a Business Owner
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09-09-2006, 05:33 AM
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Digit is offline Digit
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  Old  Ways of Becoming a Business Owner

If you decide entrepreneurship is for you, you'll have to decide how you're going to get your own business. Here are four main ways of doing so:
  1. Starting a new business,
  2. Buying an existing business,
  3. Buying a franchise, and
  4. Taking over the family business

Starting a New Business

Starting a new business is a dream many people share. What an exciting adventure! If you start a new business, look for challenges as well as rewards.

The Challenges

No matter how you get into business, you will face challenges. If you're starting a new business, you'll face a few additional ones.
  • A new business requires more time and effort than an established business.
  • Start-up costs are often high. Start-up costs are the expenses involved in going into business. Examples include renting or buying space and buying equipment, office supplies, and insurance.
  • If you borrow money, you'll have to convince lenders that your business idea will work.
  • It's risky. No matter how well you plan, you wont know if the business will succeed until you've tried it.

The Rewards

Tough challenges await those who build a business. What are the rewards? Besides those enjoyed by all entrepreneurs, consider these benefits:
  • You dont inherit a previous owners mistake's.
  • You can try fresh ideas and build your business your way.
  • You get personal satisfaction from knowing you built the business yourself.

Buying an Existing Business

If you dont want to start a new business, you might want to buy an existing one. There are many reasons why a business might be for sale. A successful one may be for sale because the owners are retiring or entering a new business. Perhaps business is so good, they can't handle it anymore.

There may also be many reasons why an unsuccessful business is for sale. The bottom line, however, is that it is losing money. Perhaps it's still a good investment, if it can be turned around.

A Fast Start

Buying an existing business can put you several steps ahead. First, you can save on start-up costs by taking advantage of the previous owners business agreements, such as a lease signed when rents were lower. A lease is a contract to use something for a specified period of time.

If the business has been successful, you can build on that success. The goodwill, or loyalty, of customers is one of a business's most valuable assets. You may also benefit from an established reputation and a trained staff.

Drawbacks

Every business has its problems, but if it's struggling, look for the reasons:
  • The location may be poor.
  • The competition may be taking business's away.
  • The market outlook, or potential for future sales, may have changed.
  • The building or equipment may need expensive repairs or replacement.
  • The business may have a reputation for poor products.

Buying a Franchise

A type of existing business that offers specific advantages is the franchise. A franchise is the legal right to sell a company's goods and services. Many fast-food restaurants and real estate offices are franchises.

When you buy a franchise, you are actually buying the right to sell another company's products. In addition to paying for the franchise, you will continue to pay a percentage of your profits to the parent company.

Like any business owner, you are in charge. However, you must follow the parent company's guildines. These may dictate how to make or distribute the goods or services.

Less Risk

A franchise may be a wise choice for people with limited business experience. Here are some other benefits you'll gain:
  • A recognized product name,
  • Established management systems,
  • A business reputation and customer goodwill,
  • Training and support services,
  • Advertising, and
  • Financing

Less Gain

A franchise is not the right choice for everyone. A franchise may be less profitable because you pay a portion of your profits to the parent company. Since you didn't build the company from scratch, there may be less satisfaction.

Taking Over the Family Business

Does your father, mother, or another relative own a business? If so, it might be a shortcut to entrepreneurship.

Smoothing the Way

Taking over a family business can have the advantages of the franchise without the fees.
  • Your relatives might help you finance the business.
  • Family members tend to be loyal and trust each other.
  • Family members working as a team can achieve more than individuals.
  • Relatives can teach you the business.

Bumps in the Road

In addition to the usual hazards of business ownership, a family business presents special ones. To begin with, it's sometimes hard to have normal business relationships with relative. Moreover, when the family is part of the business, you can't always go home and leave the business behind you.


Originally Posted by About the Author
Josh Reid, a.k.a. Quietdrive, is a sophomore student taking advanced business classes at Mound Westonka High School in Minnesota. He has already received letters from numerous 4-year colleges such as Boston College, Boston University, University of Wisconsin-Madison, and University of San Diego, about attending them when he graduates high school in 2 years.
Article is copyright © Josh Reid 2006. If you would like to use my article please just keep it in tact the way it was written and give a link to www.nerdpoint.com


---

Please note: This article wasn't written by me. It was written by a member of my staff.

09-09-2006, 07:29 PM
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Originally Posted by Digit
Please note: This article wasn't written by me. It was written by a member of my staff.
Either way, it is a great article! Very informative, as I am highly interested in business, even though my friends and family don't know it yet . Thank you for the great article Digit!

09-10-2006, 04:58 AM
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  Old

There's actually a follow up article as well.

http://nerdpoint.com/showthread.php?t=1228 <--

09-25-2006, 03:54 AM
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  Old

I love the article but everyones going to call me a thread trasher for this. Dont join a franchise all they do is scam you ive experinced this first hand and it sucks. Thats it great article Digit.

09-25-2006, 05:12 AM
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What? You're 15 and you have experience with a franchise? No offense but I don't believe that one bit. And how would they scam you? Do you understand what a franchise is?

09-25-2006, 01:48 PM
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Originally Posted by EEight
What? You're 15 and you have experience with a franchise? No offense but I don't believe that one bit.
I agree...

09-25-2006, 03:54 PM
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Lol, creating a neighborhood lemonade stand franchise. One on every corner.

09-26-2006, 05:48 PM
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  Old

Lol...I don't think a 15 year old would have any experience with the franchise system...

Hey! I'm 15 and I understand exactly what a franchise is - got taught it in business studies lol

09-26-2006, 06:42 PM
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I think what Echo was thinking about was companies that send you a catalog and ask you to sell their products by going door-to-door or offering them to your friends and family. They usually target kids, and claim that it's a great way of learning all about money management and such. While in reality they're getting you to bust your butt selling their products for them, and in the end give you a measily $2 or something (which to a kid I guess sounds like a lot).

Those aren't the franchises, they're pyramid schemes. The franchises discussed here are businesses like McDonald's.

09-27-2006, 01:48 AM
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Okay yea i dont have any experince in the working field. IVe been working for 3 years. Also i was in a family business like i am now which was joined in a franchise. Which what they do is sell the business at a intrest then they try to get your kicked out of the job and then they can resell it again with an added percentage so lets say the job is 2500 they sell it to you at 5000 well you get kicked out they will sell it again for another 5000 and then so forth untill the company that signed the contract finally cancles the contract so they can sell that one job many times. Now before you talk **** in a forum maybe private message me first. Nightmare your only 15 how do you know anything too. Thats how you guys are basiclly classify me once of my age.

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