Comments on: What are the pro and cons of starting a business from scratch; buying an existing one and buying a franchise? http://www.mscmatrix.com/starting-business/what-are-the-pro-and-cons-of-starting-a-business-from-scratch-buying-an-existing-one-and-buying-a-franchise Thu, 18 Mar 2010 01:53:59 -0400 http://wordpress.org/?v=2.8.4 hourly 1 By: Teresa http://www.mscmatrix.com/starting-business/what-are-the-pro-and-cons-of-starting-a-business-from-scratch-buying-an-existing-one-and-buying-a-franchise/comment-page-1#comment-1721 Teresa Fri, 12 Mar 2010 01:39:59 +0000 http://www.mscmatrix.com/starting-business/what-are-the-pro-and-cons-of-starting-a-business-from-scratch-buying-an-existing-one-and-buying-a-franchise#comment-1721 The answer to this question is complex. Each opportunity has it's own pitfalls and rewards. You need to do a lot of research into each area and decide what is good for you. Some people would think that the challenges of starting a business from scratch is exciting and others would not attempt it. This is true for buying a business and buying a franchise. Research all three and then decide what appeals to you. Search the internet for sites that sell businesses, franchises, etc. to see what it offered. One site to look at is www.Businessbroker.net, this site sells both established business and list franchises through it's sister site - www.FranchiseAdvantage.com. Both sites have plenty of different businesses to research. You can also try sites like www.sba.org -- this is a government small business website that has lots of resources. Good luck in your endeavors.<br><b>References : </b><br> The answer to this question is complex. Each opportunity has it’s own pitfalls and rewards. You need to do a lot of research into each area and decide what is good for you. Some people would think that the challenges of starting a business from scratch is exciting and others would not attempt it. This is true for buying a business and buying a franchise. Research all three and then decide what appeals to you. Search the internet for sites that sell businesses, franchises, etc. to see what it offered. One site to look at is http://www.Businessbroker.net, this site sells both established business and list franchises through it’s sister site – http://www.FranchiseAdvantage.com. Both sites have plenty of different businesses to research. You can also try sites like http://www.sba.org — this is a government small business website that has lots of resources. Good luck in your endeavors.
References :

]]> By: knivess http://www.mscmatrix.com/starting-business/what-are-the-pro-and-cons-of-starting-a-business-from-scratch-buying-an-existing-one-and-buying-a-franchise/comment-page-1#comment-1720 knivess Fri, 12 Mar 2010 01:00:59 +0000 http://www.mscmatrix.com/starting-business/what-are-the-pro-and-cons-of-starting-a-business-from-scratch-buying-an-existing-one-and-buying-a-franchise#comment-1720 As you contemplate becoming a business owner, there are many decisions that need to be made regarding the best way to go about this rewarding but sometimes challenging endeavor. You will discover that there are two main options available; start your own business from scratch or invest into an existing franchise system. There are pros and cons to both business models. Starting a Business from Scratch - Pros Control and creativity - Starting your own business allows you to create a system from scratch and to make all the decisions relating to your business. You are likely to have a good feeling of accomplishment once your effort is a success. Profitability - If the business belongs solely to you, you reap in all the profits rather than having to pay a portion in royalty fees. Less initial startup expense - You usually have more flexibility in finding a business that begins at a lower cost, depending on the type of business. There is also the possibility of running your business from home to save on expenses. Starting a Business from Scratch - Cons More time and effort - You will be completely on your own from start to finish. You will need to gain a great deal of knowledge on not only running the business, but also on starting the business as well as all other aspects of managing a business. Included in this list is the preparation of a complete detailed business plan, the work involved in obtaining financing, and the effort in hiring good employees. You are also required to market your business to consumers. Competition - There is a good possibility that there will be established competition via franchised businesses in your area. You will need to differentiate your business from the others in order to build a customer base from scratch. Higher Failure Rates - The odds of failure are typically higher for new business startups versus buying into an existing franchise business. It is more difficult to establish a completely new concept and system.<br><b>References : </b><br>https://www.jobsindubai.com/career.asp?qCareerID=3 Emirates Salaries As you contemplate becoming a business owner, there are many decisions that need to be made regarding the best way to go about this rewarding but sometimes challenging endeavor. You will discover that there are two main options available; start your own business from scratch or invest into an existing franchise system. There are pros and cons to both business models.

Starting a Business from Scratch – Pros

Control and creativity – Starting your own business allows you to create a system from scratch and to make all the decisions relating to your business. You are likely to have a good feeling of accomplishment once your effort is a success.

Profitability – If the business belongs solely to you, you reap in all the profits rather than having to pay a portion in royalty fees.

Less initial startup expense – You usually have more flexibility in finding a business that begins at a lower cost, depending on the type of business. There is also the possibility of running your business from home to save on expenses.

Starting a Business from Scratch – Cons

More time and effort – You will be completely on your own from start to finish. You will need to gain a great deal of knowledge on not only running the business, but also on starting the business as well as all other aspects of managing a business. Included in this list is the preparation of a complete detailed business plan, the work involved in obtaining financing, and the effort in hiring good employees. You are also required to market your business to consumers.

Competition – There is a good possibility that there will be established competition via franchised businesses in your area. You will need to differentiate your business from the others in order to build a customer base from scratch.

Higher Failure Rates – The odds of failure are typically higher for new business startups versus buying into an existing franchise business. It is more difficult to establish a completely new concept and system.
References :
https://www.jobsindubai.com/career.asp?qCareerID=3
Emirates Salaries

]]> By: bake http://www.mscmatrix.com/starting-business/what-are-the-pro-and-cons-of-starting-a-business-from-scratch-buying-an-existing-one-and-buying-a-franchise/comment-page-1#comment-1719 bake Fri, 12 Mar 2010 00:23:59 +0000 http://www.mscmatrix.com/starting-business/what-are-the-pro-and-cons-of-starting-a-business-from-scratch-buying-an-existing-one-and-buying-a-franchise#comment-1719 As a franchise consultant, one of the most important questions any first-time potential business owner asks me is whether to start their own new venture or to look at franchising. The answer has many components attached to it that need attention. Let's review some of those considerations. Starting up a new "mom and pop" type business is statistically very risky. Numerous studies have been conducted on this subject, and the general consensus indicates that 90-95% of new independents fail within two or three years. The steep learning curve that is involved can be a killer all by itself. The few who do succeed in this business model typically have an extremely high level of expertise in their product or service. They've "lived it" all their lives. When it comes to franchising, however, much of the risk is reduced, or even eliminated. Although there are no guarantees, this business model is as close as you'll come to a guarantee of success. The same studies show that new franchise business startups rarely fail. The reason for this, quite simply, is because the often very long exercise of trial and error has already been done so many times that it's reached the inevitable point of trying and succeeding. The franchiser has made it through the learning curve and, along the way, has developed the success secrets for that business. Those who fail in franchising almost always were not committed to following the franchiser's systems. The main reason you buy a franchise is to minimize risk and to set yourself up for success. Traditionally, in a new startup, independent business, you are almost always operating from a "shoot from the hip" mentality, which can lead to failure. There is no past experience to draw upon, and it becomes challenging to control all aspects of the business. With a good, successful franchise model, you open yourself up to a deluge of information regarding all aspects of information, including financial assistance, site selection, and a wealth of knowledge from existing franchisees. Also, rapid growth is inevitable with the franchise model, which is only a good thing for a franchisee for many reasons, such as increased name/brand recognition and exposure to national advertising campaigns, which increase sales. Tremendous buying power because of constant expansion is also a major plus. Of course, the key is to follow the proven system of success, so your creativity can be somewhat lessened. In addition, you will have to pay a franchise fee and an ongoing royality, and your individual ability to make changes to the franchise is reduced dramatically. To summarize, franchising greatly reduces risk, enables you to follow a proven, successful system, and increases your chances of success in business exponentially.<br><b>References : </b><br>Me. I'm a recruiter for the franchise industry with several years experience helping franchise seekers identify and attain their ideal franchise at no cost to them. As a franchise consultant, one of the most important questions any first-time potential business owner asks me is whether to start their own new venture or to look at franchising. The answer has many components attached to it that need attention. Let’s review some of those considerations.

Starting up a new "mom and pop" type business is statistically very risky. Numerous studies have been conducted on this subject, and the general consensus indicates that 90-95% of new independents fail within two or three years. The steep learning curve that is involved can be a killer all by itself. The few who do succeed in this business model typically have an extremely high level of expertise in their product or service. They’ve "lived it" all their lives.

When it comes to franchising, however, much of the risk is reduced, or even eliminated. Although there are no guarantees, this business model is as close as you’ll come to a guarantee of success. The same studies show that new franchise business startups rarely fail. The reason for this, quite simply, is because the often very long exercise of trial and error has already been done so many times that it’s reached the inevitable point of trying and succeeding. The franchiser has made it through the learning curve and, along the way, has developed the success secrets for that business. Those who fail in franchising almost always were not committed to following the franchiser’s systems. The main reason you buy a franchise is to minimize risk and to set yourself up for success.

Traditionally, in a new startup, independent business, you are almost always operating from a "shoot from the hip" mentality, which can lead to failure. There is no past experience to draw upon, and it becomes challenging to control all aspects of the business.

With a good, successful franchise model, you open yourself up to a deluge of information regarding all aspects of information, including financial assistance, site selection, and a wealth of knowledge from existing franchisees. Also, rapid growth is inevitable with the franchise model, which is only a good thing for a franchisee for many reasons, such as increased name/brand recognition and exposure to national advertising campaigns, which increase sales. Tremendous buying power because of constant expansion is also a major plus.

Of course, the key is to follow the proven system of success, so your creativity can be somewhat lessened. In addition, you will have to pay a franchise fee and an ongoing royality, and your individual ability to make changes to the franchise is reduced dramatically.

To summarize, franchising greatly reduces risk, enables you to follow a proven, successful system, and increases your chances of success in business exponentially.
References :
Me. I’m a recruiter for the franchise industry with several years experience helping franchise seekers identify and attain their ideal franchise at no cost to them.

]]> By: denelle http://www.mscmatrix.com/starting-business/what-are-the-pro-and-cons-of-starting-a-business-from-scratch-buying-an-existing-one-and-buying-a-franchise/comment-page-1#comment-1718 denelle Thu, 11 Mar 2010 23:38:59 +0000 http://www.mscmatrix.com/starting-business/what-are-the-pro-and-cons-of-starting-a-business-from-scratch-buying-an-existing-one-and-buying-a-franchise#comment-1718 There are certain elements for each that could be considered a pro or a con - depending on how you want to look at it. However, I will list them as I see them. Franchise Pro: - The business structure is thought out and setup for you. This allows you to concentrate on the running of the business, rather than figuring out all the policies and procedures. This includes store policies, procedures, products to sell, merchandising, marketing, uniforms, store layout, staff training tools and wage agreements. - Regardless of whether you start a new one or buy an existing one you will receive support and assistance rom the franchise head office. - Franchises are easier to resell later down the track if you decide to because they are well known and potential buyers are more trusting of them. - Whether you start a new one or buy one a loyal customer base should already be established due to recognition and previous experiences from other locations of your chosen franchise. - Raw materials/products are often available at better prices because your head office will have already done the organising and bargaining with suppliers/wholesalers. Also, there is more likely a chance to have items offered exclusively to you so other businesses in your area will not necessarily be able to compete with price and/or product. - If you hire staff who have worked in other stores of your franchise they could bring added experience and will lower time-out for training purposes because they already know the routine and what is expected. Franchise Cons: - The business structure and procedures are thought out for you. This will allow little room for your own input into how your business runs. This can be great if you want an easier business option and want to run your business as if you are more the manager than the owner, however if you want to really run a business as your own you may find this hinders you quite a bit. - Franchise Fees. These will vary in amount depending on the franchise you choose and will include a joining fee as well as monthly fees. You will have to make sure your business can sustain this additional cost as well as all the other overheads. - If you hire staff who have worked in other stores of your franchise they could bring over bad work practices and have a lower work ethic because to them "it is all the same", not something that they feel inspired to make work for you. - You will have multiple competitors, that is other stores of your franchise if they are not too far away. - If starting a new franchise a huge starting up expense will be involved, more so than opening your own business as everything has to be "just so" from the day you open.In your own business you might find that small things might do for the time being - such as uniforms could be simple until you start making some money. This can also be a good thing as you won't have to change anything or remember to keep money aside for upgrading anything specific at a later date. Buying an existing business will leave you susceptible to many things both good and bad - eg. existing location and reputation. Also, you may have to continue to honour deals made by the previous owners to certain customers that you may not agree with, and not necessarily know whether they are correct or if the customer is trying it on. However, if you refuse to continue with these deals you may lose a lot of regular business. These deals can be good because the customer may spend a substantial amount at your business and continue to do so once you take over. Well, this is the longest answer I have ever given. I think I will leave it at that for now and I am sure you will be able to figure out the pros and cons of starting up your own business by considering some of the things I have mentioned here.<br><b>References : </b><br> There are certain elements for each that could be considered a pro or a con – depending on how you want to look at it. However, I will list them as I see them.
Franchise Pro:
- The business structure is thought out and setup for you. This allows you to concentrate on the running of the business, rather than figuring out all the policies and procedures. This includes store policies, procedures, products to sell, merchandising, marketing, uniforms, store layout, staff training tools and wage agreements.
- Regardless of whether you start a new one or buy an existing one you will receive support and assistance rom the franchise head office.
- Franchises are easier to resell later down the track if you decide to because they are well known and potential buyers are more trusting of them.
- Whether you start a new one or buy one a loyal customer base should already be established due to recognition and previous experiences from other locations of your chosen franchise.
- Raw materials/products are often available at better prices because your head office will have already done the organising and bargaining with suppliers/wholesalers. Also, there is more likely a chance to have items offered exclusively to you so other businesses in your area will not necessarily be able to compete with price and/or product.
- If you hire staff who have worked in other stores of your franchise they could bring added experience and will lower time-out for training purposes because they already know the routine and what is expected.
Franchise Cons:
- The business structure and procedures are thought out for you. This will allow little room for your own input into how your business runs. This can be great if you want an easier business option and want to run your business as if you are more the manager than the owner, however if you want to really run a business as your own you may find this hinders you quite a bit.
- Franchise Fees. These will vary in amount depending on the franchise you choose and will include a joining fee as well as monthly fees. You will have to make sure your business can sustain this additional cost as well as all the other overheads.
- If you hire staff who have worked in other stores of your franchise they could bring over bad work practices and have a lower work ethic because to them "it is all the same", not something that they feel inspired to make work for you.
- You will have multiple competitors, that is other stores of your franchise if they are not too far away.
- If starting a new franchise a huge starting up expense will be involved, more so than opening your own business as everything has to be "just so" from the day you open.In your own business you might find that small things might do for the time being – such as uniforms could be simple until you start making some money. This can also be a good thing as you won’t have to change anything or remember to keep money aside for upgrading anything specific at a later date.

Buying an existing business will leave you susceptible to many things both good and bad – eg. existing location and reputation. Also, you may have to continue to honour deals made by the previous owners to certain customers that you may not agree with, and not necessarily know whether they are correct or if the customer is trying it on. However, if you refuse to continue with these deals you may lose a lot of regular business. These deals can be good because the customer may spend a substantial amount at your business and continue to do so once you take over.

Well, this is the longest answer I have ever given. I think I will leave it at that for now and I am sure you will be able to figure out the pros and cons of starting up your own business by considering some of the things I have mentioned here.
References :

]]> By: Chelsey http://www.mscmatrix.com/starting-business/what-are-the-pro-and-cons-of-starting-a-business-from-scratch-buying-an-existing-one-and-buying-a-franchise/comment-page-1#comment-1717 Chelsey Thu, 11 Mar 2010 23:25:59 +0000 http://www.mscmatrix.com/starting-business/what-are-the-pro-and-cons-of-starting-a-business-from-scratch-buying-an-existing-one-and-buying-a-franchise#comment-1717 Starting own business: Pros- everything is done your way. selling what you know/ want to sell. Cons- unestablished. Buying existing: Pros- possibly well known. don't have to worry about all the start up factors. Cons- you could potentially lose great customers if you change anything. you should keep the business the same as possible. Franchise: Pros- Well established, well known name, relatively no advertising on your part, everything if figured out for you (from where to buy to how much to charge). Cons- You can't have any say in how the business is run. Must have a lot of money to begin it. There are much more pros and cons for each but I didn't feel like listing them all. These are just some I could think of off the top of my head.<br><b>References : </b><br> Starting own business:
Pros- everything is done your way. selling what you know/ want to sell.
Cons- unestablished.

Buying existing:
Pros- possibly well known. don’t have to worry about all the start up factors.
Cons- you could potentially lose great customers if you change anything. you should keep the business the same as possible.

Franchise:
Pros- Well established, well known name, relatively no advertising on your part, everything if figured out for you (from where to buy to how much to charge).
Cons- You can’t have any say in how the business is run. Must have a lot of money to begin it.

There are much more pros and cons for each but I didn’t feel like listing them all. These are just some I could think of off the top of my head.
References :

]]> By: Bfr F http://www.mscmatrix.com/starting-business/what-are-the-pro-and-cons-of-starting-a-business-from-scratch-buying-an-existing-one-and-buying-a-franchise/comment-page-1#comment-1716 Bfr F Thu, 11 Mar 2010 22:43:59 +0000 http://www.mscmatrix.com/starting-business/what-are-the-pro-and-cons-of-starting-a-business-from-scratch-buying-an-existing-one-and-buying-a-franchise#comment-1716 Norm Brodsky answers this question in his book, The Knack. He gives several cons, but to sum it up "if the business is such a good one, why are they selling it?" When you buy a buisness you never quite know what you'll get, so if you choose to, make sure you learn everything about the business. Also, ask your self "what am I buying?" Name? Assets? Dedicated sales staff? Intellectual property? Often times, it's nothing or or worth substantially less than you are paying. and on that topic, if you are asking this question, I assume you know little about business; How will you know how much to pay? A multiple of profit that is commonly used in the industry? Those can be very deceptive and are not uniform assessments of value throughout the industry, they are just short hand. Chances are, you don't know enough about business to know if your getting a deal or the shaft, and they'll always try and shaft you. Best to cut your teeth in your own business, and buy only when you know the in's and out's. It may take longer but you'll be a better business man for it.<br><b>References : </b><br>Norm Brodsky, The Knack Norm Brodsky answers this question in his book, The Knack. He gives several cons, but to sum it up "if the business is such a good one, why are they selling it?" When you buy a buisness you never quite know what you’ll get, so if you choose to, make sure you learn everything about the business. Also, ask your self "what am I buying?" Name? Assets? Dedicated sales staff? Intellectual property? Often times, it’s nothing or or worth substantially less than you are paying. and on that topic, if you are asking this question, I assume you know little about business; How will you know how much to pay? A multiple of profit that is commonly used in the industry? Those can be very deceptive and are not uniform assessments of value throughout the industry, they are just short hand. Chances are, you don’t know enough about business to know if your getting a deal or the shaft, and they’ll always try and shaft you. Best to cut your teeth in your own business, and buy only when you know the in’s and out’s. It may take longer but you’ll be a better business man for it.
References :
Norm Brodsky, The Knack

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