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Bill Bartmann
Starting your own Business
Starting and building your own business has several advantages, including being your own boss. You
begin fresh and you have total control on how the business will be managed and you are free from
obligations to franchisors. You choose the location and determine the products and services you
will offer.
The downside of starting your own business is the work involved in the start-up process, including
business licenses and permits, establishing credit lines with suppliers and generating customers.
New businesses often find it difficult to secure financing while they take longer to show
profits.
If you plan to start your own business, you will need to be prepared to dedicate a lot of time and
energy to get established. This could mean working long days, with no days off, for a stretch of
time while you focus on building your business.
Purchasing a Franchise
When you purchase a franchise you (the franchisee) enjoy the benefits of a start-up and the
benefits of buying an existing business. A franchise is the right to sell a product or service (for
a franchisor); under a franchise agreement, you are expected to be successful.
The financial risk in owning a franchise is reduced since they already have an established product
or service and a proven business model. For example, McDonalds is a very well-known name and they
attract a lot of customers. With a franchise, everything is already in place including the interior
layout, displays, business techniques, policies and procedures and more.
Many franchisors offer assistance in marketing and management support. Some even assist in securing
the financing to franchisees, while some are able to get their own. Lenders and banks are more
willing to extend credit to franchisees as they face less risk than those who start their own
business.
There are disadvantages one could face when buying a franchise, including the high franchise fees
required upfront. These fees can range from a couple thousand to hundreds of thousands, depending
on the franchise. Some do not offer the support and assistance to help new franchisees get
started.
Be careful purchasing a franchise; research the franchise, talk to other franchisees in the
business and check to see if they have a good support team for new franchisees. See how successful
others are and if they are happy.
Buying an Existing Business
Buying an existing business reduces the time and energy expended in establishing a new business.
The company has already been formed, employees are in place, relationships with vendors established
and they have regular customers. Provided the business you buy has been profitable and has a good
track record, establishing financing to build or expand the business will be less challenging.
Beware of the common pitfalls of buying a business. The required investment could be quite high
compared to starting a business. Why was the business being sold? It could be that they are not as
profitable today; their product or service could be losing popularity or becoming obsolete. Though
they may show a lot in receivables, many could be uncollectable.
Get to know a business before you purchase it; try to watch their everyday operations, talk to
employees, vendors, and anyone who has a business relationship. Ask to see financials for the
current year and for at least the last few years.
About the Author:
Bill Bartmann is a self-made billionaire who went from homeless at the age
of 14 to becoming a
billionaire, going bankrupt, then bouncing back to do it again!
Bill has had his self-doubts and even bouts of depression; he wouldn't be human otherwise.
However, when self-esteem is strong and you're clear about your values, then you can bounce
back from the lows; each time, you bounce back just a little bit higher. Bring out the
Billionaire in you; visit http://www.billionaireu.com/
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