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Unit 2

Unit 2. Types of Businesses. Ways of starting business. 1- Start-up business. 2- Buy an existing business. 3- Buy a franchise of an existing business . 1- start-up . Entrepreneurial theories advise: Start small . Selling to develop market .

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Unit 2

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  1. Unit 2 Types of Businesses

  2. Ways of starting business 1- Start-up business. 2- Buy an existing business. 3- Buy a franchise of an existing business.

  3. 1- start-up • Entrepreneurial theories advise: • Start small . • Selling to develop market . • Prepare your self for every thing ( earn or lose money ). • Old pawnbroker boss to teach : • Every sent you earn you invest back into business.

  4. Recognize mistakes and change strategies . • Move quickly on your ideas. • Open-minded . • Willing to confront radical change .

  5. 2-Buy an existing business Advantages : -Financial track record can be reviewed to analyze performance . -Employees, costumers , supplier and vendor relationship are already familiar and established .

  6. May offer a prime location . • Loan approvals are easier . • The existing owner my be willing to finance part of the new business.

  7. Why business are sold ?? • Insufficient profits . • Management got burned out. • Management got bored . • Death or a working partner . • Partner or shareholder dispute. • Fear of new competition . • Old age and retirement of owners .

  8. You have to know every thing relevant about the business ( good and bad )

  9. Disadvantages : • The cost generally more than that of a start-up. • The owner’s real reason for selling may be kept from you . • The validity of financial statements may be question . • Customer satisfaction levels may be below what you lad to believe . • Condition of assets may be worse than it appears . • Existing employees may not be suitable . • The inventory may be outdated . • The business may be overpriced .

  10. 3- franchises -Its booming and the growth will no doubt continue . -The success rate is much greater for franchises than for independently owed businesses.

  11. Advantages : • A proven formula for success. • Training programs for new owners . • Advertising and promotional programs initiated by the franchise . • Already established brand and trade names . • Pre-tested and established accounting system . • Volume discounts on purchases .

  12. Disadvantages : • High start-up cost . • Paying franchise fees and annual fees. • Abiding by the operating restriction of the franchise. • Potential renewal fees after a certain period of time . • Limited growth of franchise as specified by contract .

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