CHAPTER 4

ENTREPRENEURIAL OPTIONS
 STARTING A NEW BUSINESS
ADVANTAGES:
1. Low start up cost
2. Independence
3. Site Selection
4. No baggage
5. Direct a business in own personal goals
6. Flexibility (products, target market, strategies)
7. Easier to innovate
Disadvantages:
1. Uncertainty
2. Difficulty in building an image and build
patronage
3. High risk
4. High commitment
5. Limited financing
6. Expose to direct legal problems
BUYING AN EXISTING BUSINESS
 Things to consider
1. Your capital
2. Your abilities
3. Your commitment
4. Your strength
5. Location of the business
 ADVANTAGES
1. Facilities and equipment already available
2. Cash flow is immediate
3. Easier to build financing opportunities
4. Skilled manpower already available
5. Already established a target market
6. Business plan and marketing plan already
established
7. Some problems have been solved.
 Disadvantages
1. Costly
2. Hidden problems
 FRANCHISING
Marketing system based on a
legal agreement wherein one
party (franchisee or franchiser) is
given the right to handle a
business as an independent
owner but is required to abide by
the terms and conditions
specified by the other party
(franchisor).
 TYPES OF FRANCHISING
• The Product Franchise.
With this, the manufacturer uses
the franchise agreement to
determine how the product is
distributed by the person buying
the franchise. A retail company
can be provided with a franchise
to distribute “distribution”
• The Manufacturing Franchise

The franchisee is permitted to

manufacture the products under
license and sell them using the
originator's trademark and name.
They also get the benefit of the
national advertising of the
product they manufacture.
• The Business Franchise Venture.

The franchisee purchases and distributes

the products for the franchise owner. A
client base is provided by the product
owner for the franchisee to maintain.
• Business Format Franchise

This opportunity is very popular, and

involves providing the franchisee a proven
business model using a recognized
product and brand. Training is provided by
the franchise owner and assistance in
setting up the business. Supplies are
purchased from the franchisor and the
franchisee pays a royalty fee
 ADVANTAGES
1. Some are already successful
2. Brand name was already established
3. Exclusivity of the product and territory
4. Support from the franchisor
5. Suppliers were already established
6. Lower failure rate
 Disadvantages
• Their way
• Ongoing cost
• On ongoing support?
• High Cost
• Shark infested water