Making the decision to open your own business is a major life event. Starting a new venture can be exciting as well as rewarding. The first step to becoming a business owner is choosing the type of business you would like to run. This business can be something that you have wanted to start up yourself or you can go with an established franchise. Are you willing to share the profits in exchange for the relative safety of a franchise or would you prefer the risk and rewards of pursuing your own vision? Franchising is a continuing relationship wherein a franchisor provides a licensed privilege to the franchisee to do business and offer assistance in organizing, training, merchandising, marketing and managing in return for a monetary consideration …show more content…
The first part provides reasons why starting a new business is profitable in terms of having higher or bigger possibility for growth of the business and higher rate of return. The second part highlights the originality of starting a new business as an entrepreneur. The last part mentions why starting a new business is more entrepreneurial than franchising in terms of entrepreneurial skills and …show more content…
It determines whether or not you business is earning money more than your invested capital or if it has reached your target profit for the month. Profitability is the primary goal of all business ventures. “Profitability is measured with income and expenses. Income is money generated from the activities of the business” (Hofstrand, n.d.). Compared to franchising, bootstrapping provides higher/ bigger possibility for growth. If you want to start one it's important to understand that startups are so hard that you can't be pointed off to the side and hope to succeed. You have to know that growth is what you're after. The good news is, if you get growth, everything else tends to fall into place. Which means you can use growth like a compass to make almost every decision you face. According to Graham, there are three phases of the growth of a successful business: There's an initial period of slow or no growth while the startup tries to figure out what it's doing. Second, as the startup figures out how to make something lots of people want and how to reach those people, there's a period of rapid growth. Lastly, eventually a successful startup will grow into a big company. Growth will slow, partly due to internal limits and partly because the company is starting to bump up against the limits of the markets it serves.” (Graham, n.d.). In starting a new business, there is higher or bigger possibility for growth because one
I implore you to think about this decision in great detail and time, even after I present my personal preference. Some buyers flourish as independent business owners, while others are more likely to be in the black as franchise owners. In reality, there are no easy answers to the independent business versus franchise dilemma. Instead, you will need to carefully evaluate the factors that differentiate the two approaches, talk with your family and other trusted advisers, and decide which one is right for you, for the bible says that you should trust in the Lord with all your heart, and do not lean on your own understanding. I will personally be recommending starting a franchised corporation, because I believe it fits your current level of knowledge and gives way to the best possibility of success for
First we will take a look at France. Over the past few years in France, "franchise" has evolved from a concept into a truly viable economic model. For the tenth straight year, the number of franchises in France has increased steadily by 3-5 percent in 2003. That same year, 55,880 stores opened in France, 34,745 of them as franchises an increase from a 57.8 percent share in 2002 to 61.2 percent in 2003. The number of companies in France using franchises rose from 719 to 765 over the course of 2003, an increase of about 6.4 percent. French franchises are also exported with 179 networks located outside of France. This shows that the opportunity for a reputable franchise to become established in France is continuing to grow. The overall acceptance of American franchises is beneficial when contemplating how the community will take to a business opening shop.
In summary, if you want to go into the franchise business and if you happen to be:
Franchise owners do not have the freedom to make changes to their products and services based on their own personal interests or market requirements (Brockhouse, 1989). The parent company is the one instead with the mandate to make such decisions. Independent business owners, despite the high likelihood to have a higher investment cost to start and operate their business, have more control over decisions to invest and what time to do so. In Shania’s case, she has many willing investors and therefore as an independent business owner she has the power to decide whether to include them or not. She can also decide who to include and who not to include as she pleases. Franchises are associated with risks of negative publicity like for instance if one business under the franchise screw up the blame is put on the entire franchise, but for Shania as an independent business owner doesn’t have to worry about such possibilities. Freedom does bring happiness according to online surveys. The greatest reward of being an entrepreneur is the ability to control one’s destiny and the destiny of their business (Jenkins,
The parent company can have extremely low costs than the company-owned restaurants or stores. In the franchising model, "the independent business owner typically assumes all the costs of opening and running the franchised business, leaving the corporate headquarters responsible for activities such as marketing and administrative activities."
To be a successful entrepreneur, there are steps that one must follow when starting a new enterprise. These steps are termed as the process of entrepreneurial which is the systematic method of preparation of an enterprise that consists of four steps. The four steps are fundamental to the success of an entrepreneur venture. The four entrepreneurial processes includes discovering, assessing and opportunity, developing a business plan, establishing resource needs, and managing the resulting enterprise (Barringer & Ireland, 2010). Each individual step is vital for the start of an entrepreneur venture and for an entrepreneur to achieve their entrepreneurial goals. This paper will discuss the four steps of the entrepreneurial process,
Moreover, franchises system is one of these business solutions to make sure your money is invested in the secure ways. Franchises are a very popular method for people to start a business, especially for those who wish to operate in a highly competitive industry like the fast-food industry. For example McDonald’s restaurants which is one of famous franchise brand that provide us fast ...
Not having to answer to a corporate boss is the dream of many and the flexibility that owning a business franchise creates provides this option. Success is not reached by simply creating a business, however. The level of success is measured by the size and efficiency of the business. Business growth is the driving force of the economy. The additional jobs and revenues created when a business expands allow the economy to grow at exponential rates. One of the fastest and most popular ways to increase the size of a business is to turn it into a franchise, which can then be purchased by individuals. Franchising provides opportunities that are beneficial to both the parent company and the purchaser. The company that owns the business can expand without having to pay such a large initial cost to open a new store since the franchise purchaser pays a cost to open the business. As well, the company can regulate many of the business activities so that there is a sense of consistency throughout all of the locations. The purchaser is allowed to use the trademarks and goods of the franchise which already have a large market presence. As well, they are provided with training and work standards by the company to help their business run smoothly (Kalnins & Lafontaine, 2004, p.761). Looking at the business model of the world’s largest food retailer, McDonald’s, provides great insight into franchising and business growth in general as well a better understanding of a global business that utilizes the franchising technique.
Manufacturing Franchise: These types of franchises provide an organization with the right to manufacture a product and sell it to the public, using the franchisor’s name and trademark. This type of franchise if found most often in the food and beverage industry. Most bottlers of soft drinks receive a franchise from a company and must use its ingredients to produce, bottle, and distribute the soft drinks.
financing. They are often comparatively modest, in-order to help the founders get on their feet, build
"Entrepreneurs who start and build new businesses are more celebrated than studied. They embody, in the popular imagination and in the eyes of some scholars, the virtues of "boldness, ingenuity, leadership, persistence and determination." Policymakers see them as a crucial source of employment and productivity growth. Yet our systematic knowledge of how entrepreneurs start and grow their businesses is limited. The activity does not occupy a prominent place in the study of business and economics.
The first step in any business is to think of or create a business idea. Without an idea, one cannot launch their business off the ground. A right direction is needed to create a business with a unique idea. However, other options include franchising or buying an existing business (1). Franchising allows an individual to run stores such as Burger King or McDonalds under the corporate name. It involves taking training classes and a heap of money in order to start a franchise. A Franchisee will have to buy products and services from the corporate entity they are franchising from, which is often required. Buying a franchise is like taking a piece of the pie from the company that is franchising and sharing that pie with everybody else. In addition having a franchise allows one to communicate and in essence become a big part of an added business opportunity (4). Franchising is far from easy to start and maintain for that matter. Starting a franchise involves a l...
A franchise is simply investing money in a location or store, and then having the store become your own business after learning how to manage the entire business. You earn the majority of the profits, and you also don't have to worry about operations. You'll be taught by the company on how it run the entire business, and this is the reason why this is a huge and very easy way to become rich. Franchises require quite a hefty investment depending on the business you plan to buy. However, if the business is in high demand, there is profits to be made. Take for exMple the Cold Stone Creamery business. Countless people purchase one of their many franchises. The money is very good, the opportunities are endless, and the fact that there is no more need for advertising is what makes this more worth the investment in the long
Starting your own business can be exciting and it can become a well- rewarded experience. Being your own business includes great benefits, create your
Entrepreneurs create new businesses, and new businesses in turn create jobs, strengthening competition, and may even increase productivity through technological change. Increases in levels of entrepreneurship will result to an increase in economic growth (Nolan, 2003).Entrepreneurs by starting or setting up their businesses, will help with local development by locating less developed areas. The growth of industries and businesses in these areas leads to infrastructure improvements, such as better roads and stable electricity. Every business that is located in a less developed area will create opportunities that will improve the living conditions of people residing in that particular area (Nolan, 2003).