Starting Versus Buying a Business Chapter 3, Section 2

Vocabulary Values – the beliefs and principles by which you choose to live that define who your are, shape your attitudes and choices, and help you identify your priorities Goodwill – the favor and loyalty a business acquires by its good reputation Franchise – a legal agreement to begin a new business in the name of a recognized company

Vocabulary Franchisee – the buyer of a franchise who is given the right to its product, process, or service Franchisor – the seller of a franchise who is giving the buyer its planning and management expertise Business Broker – someone whose job it is to bring buyers and sellers of businesses together for a fee

Entering the Family Business Rewards Challenges Trust & togetherness that family members share Working as a team, can achieve more Owners can never get away from business Difficulty viewing being objective Parents not being able to view their children as business people

Entering the Family Business Questions to Ask Yourself Do I have the ability to work for a member of my family Do I get along well with the family members who will be involved Do we share the same business goals Do we share the same general and personal goals Can we be clear & specific about our expectations Can I leave business problems at work Can we maintain a positive family relationship

Buying an Existing Business Less risky Employees are already hired & trained Equipment is already in place Company already has customers Procedures are established Substantial Inventory on hand Creditors established Owner may offer some expertise during the transition period

Before Purchasing a Business Questions to Ask Is the business interesting to me and to others Why is the owner selling What is the business’s potential for growth

Starting Your Own Business Questions to Ask Do I have the motivation to start a news business form nothing Does the business align with my personality, abilities, values, and goals Do I have sufficient knowledge of basic operation to undertake the business Do I have the necessary managerial ability Do I have the right partners to help me Do I have enough financial resources to start from scratch Am I willing to accept the risk

Tasks Involved in Starting a Business Test the feasibilty of your concept in the market Decide o a traditional business with a physical location or an online business or combination of both Prepare a business plan to seek capital, partners, and employees Secure professional advisors – accountants, lawyers, etc.

Tasks Involved in Starting a Business Hire employees and initiate relationship with suppliers Purchase equipment and set up distribution channels Create awareness for the business