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PowerPoint Presentation. Section 3.2 Pages 43-49. 3.2 Starting Versus Buying a Business. What you’ll learn The challenge of entering a family business The benefits and drawbacks of buying a business The responsibilities of starting your own business. 3.2 Starting Versus Buying a Business.

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  1. PowerPoint Presentation • Section 3.2 • Pages 43-49

  2. 3.2Starting Versus Buying a Business What you’ll learn • The challenge of entering a family business • The benefits and drawbacks of buying a business • The responsibilities of starting your own business

  3. 3.2Starting Versus Buying a Business Why it’s important • Many people think that being an entrepreneur means starting a business from scratch. • Many successful entrepreneurs buy an existing business then make it better.

  4. 3.2Starting Versus Buying a Business Key Terms goodwill franchise franchisee franchiser business broker

  5. 3.2Starting Versus Buying a Business I. SHOULD YOU ENTER AN EXISTING BUSINESS? A. Beingopportunistic does not always mean starting a business from scratch.

  6. 3.2Starting Versus Buying a Business B. You can enter a family business or buy an existing business.

  7. 3.2Starting Versus Buying a Business Discussion Starter Make a list of local businesses in the following categories: 1. Family Business 2. New Business 3. Franchise ?

  8. 3.2Starting Versus Buying a Business II. ENTERING THE FAMILY BUSINESS A. Family businesses are an important part of the U.S. economy.

  9. 3.2Starting Versus Buying a Business B. Family businesses are not generally high-growth businesses, but some have become very large.

  10. 3.2Starting Versus Buying a Business III. THE UP SIDE – AND THE DOWN OF FAMILY BUSINESSES A.Only about one-third of family-run businesses survive to the second generation.

  11. 3.2Starting Versus Buying a Business B. The trust and togetherness a family shares can be a real asset. C. A disadvantage is that family owners can never get away from the business.

  12. 3.2Starting Versus Buying a Business IV. QUESTIONS TO ASK BEFORE ENTERING A FAMILY BUSINESS A. Do I have the ability to work for a family member?

  13. 3.2Starting Versus Buying a Business B. Do I get along well with these family members? C. Do we share the same business goals? D.Do we share the same general goals for our personal lives?

  14. 3.2Starting Versus Buying a Business Critical Thinking Why are family businesses not always perpetuated by second generations? ?

  15. 3.2Starting Versus Buying a Business V. BUYING A BUSINESS A. Buying a business may be less risky than starting one from scratch. B.Buying a business may be attractive to one without business experience.

  16. 3.2Starting Versus Buying a Business VI. KINDS OF BUSINESSES AVAILABLE A.One can buy an existing business or the right to set up a new business patterned on an existing model.

  17. 3.2Starting Versus Buying a Business B. An existing business already has a location and physical plant. C. Customer loyalty to an existing business, or goodwill, is an extremely valuable business asset.

  18. 3.2Starting Versus Buying a Business D.McDonald’s is an example of a franchise. A franchise is a legal agreement to begin a new business in the name of a recognized company.

  19. 3.2Starting Versus Buying a Business E. The purchasers of franchises pay a percentage of the profits annually to the owners of the franchise.

  20. 3.2Starting Versus Buying a Business F. The buyer of a franchise is called the franchisee. G. The seller is the franchiser.

  21. 3.2Starting Versus Buying a Business Critical Thinking What problems might a franchiser have? ?

  22. 3.2Starting Versus Buying a Business VII. A GOOD DEAL OR A BAD ONE? A. Acquiring an existing business has advantages.

  23. 3.2Starting Versus Buying a Business 1. Location 2. Goodwill 3. Staff 4. Plant 5. Inventory 6. Established procedures

  24. 3.2Starting Versus Buying a Business B. There are can be disadvantages to buying a business. 1. Lack of success 2. Poor reputation 3. Dated inventory 4. Poorly maintained facilities

  25. 3.2Starting Versus Buying a Business VIII. WHERE TO FIND A BUSINESS A. Read the newspaper. B. Network with others. C. Hire a business broker, a person who brings buyers and sellers together.

  26. 3.2Starting Versus Buying a Business IX. QUESTIONS TO ASK YOURSELF BEFORE BUYING A BUSINESS A. Is the business interesting? B. Why is the owner selling? C. What is the potential for growth of the business?

  27. 3.2Starting Versus Buying a Business X. STARTING YOUR OWN BUSINESS A. There is more effort involved before even opening the doors to business.

  28. 3.2Starting Versus Buying a Business B. The principal benefit is that you can do things your own way.

  29. 3.2Starting Versus Buying a Business XI. QUESTIONS TO ASK YOURSELF A. Do I have the motivation to start from nothing?

  30. 3.2Starting Versus Buying a Business B. Do I have sufficient knowledge of basic operations to undertake the business? C. Do I have enough financial resources to start from scratch?

  31. 3.2Starting Versus Buying a Business XII. THE CREATIVITY FACTOR A. Think creatively about the business you choose to enter. B. Constantly be on the lookout for opportunity.

  32. End of Section 3.2 3.2Starting Versus Buying a Business

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