Becoming the Owner of a Small Business

The Process Find Your Niche by Identifying a Needed Product Find Your Niche by Identifying a Needed Product Niche Marketing Niche Marketing Deciding on a Product Deciding on a Product SCORE SCORE Studying the Market for the Product Studying the Market for the Product Product & business selected Product & business selected Where to get marker information? Where to get marker information? Methods used to study the market Methods used to study the market

Starting a New Business Pros Pros Control Control Size Size Inventory Inventory Personnel Personnel Location Location Materials Materials Select competitive environment Select competitive environment Cons Cons Resource assembly Increased risk of failure Lack of market and distribution channels Problems with MGT Production problems Lack of an established product line

Buying an Existing Company Pros Pros Personnel Personnel Facilities Facilities Product and market Product and market Creditors Creditors Location Location Revenues, profits, and goodwill exist Revenues, profits, and goodwill exist Cons Cons Old/obsolete facilities Poor employees A/R uncollectable Bad location Low quality inventory Finances

Buying a Franchise Pros Pros Contracts Contracts Sales activities already exist Sales activities already exist Brand recognition Brand recognition MGT assistance MGT assistance Economies of large-scale buying Economies of large-scale buying Financial assistance Financial assistance Local & national promotions Local & national promotions Cons Cons Costly Lack of independence Paperwork Franchisors hold advantages

What is Franchising? Definition Definition Franchise Franchise Franchisee Franchisee Franchiser Franchiser Types Types Product & trademark franchising Product & trademark franchising Business format franchising Business format franchising

Franchising Why are they increasing in importance? Why are they increasing in importance? Identification of products and customers Identification of products and customers Lower failure rate than independent Lower failure rate than independent Provide experience Provide experience Drawback= Paperwork Drawback= Paperwork

Individual Interests & Franchises What Franchise Can Do What Franchise Can Do Loss of independence Loss of independence Franchise fee Franchise fee Royalty fee Royalty fee Investigate the Franchise Investigate the Franchise Industry statistics Industry statistics Prospectus Prospectus Obtain professional advice Obtain professional advice Know legal and ethical advice Know legal and ethical advice

The Future of Franchises Growing Areas Growing Areas Restaurants Restaurants Motels Motels Convenience stores Convenience stores Technology Technology Automotive parts, accessories, and servicing Automotive parts, accessories, and servicing Others Others Global Franchises Global Franchises