Ways of owning a business

Challenges of starting a new business Requires more time and effort than an established business Start-up costs are often high You have to convince lenders that your business will work It is risky.

The rewards of a new business You don’t inherit a previous owner’s reputation. You can build your business your own way. You get personal satisfaction.

Existing Business You can take over leases with lower rents. You get equipment and furniture. You benefit from a business with a good reputation.

Drawbacks Poor location Competition Market outlook may have changed Building or equipment might need expensive repairs The business might have a poor reputation.

Franchise Pay to another company’s products You pay a fee to buy into the company Pay a percentage of your profits While you are in charge you have to follow the company’s guidelines.

Benefits Recognized product name Established management system Business reputation and customer goodwill Training and support services Advertising financing

Drawbacks Sometimes less profit You have to pay a portion of profits to parent company Could be less satisfaction

Homework Find the franchise fees for McDonald’s Smoothie King Wendy’s One choice bonus if you find a franchise that is not food