Now that you know what business you want to start, you'll need to choose how to start it. Common entry strategies include:
- Start a new business: This option permits you the most freedom and the satisfaction of knowing you did it all yourself. Some opportunities which might prompt this choice are: a new invention, a spin-off of an existing product or service, turning a hobby into a business, awareness of a customer ready to buy your product, an unfulfilled market need, expansion of a part-time activity or simply chance.
- Buy an existing business: By buying an existing business you can avoid the lead time required to launch the business, understand expected income and expenses, acquire an existing customer base, and gain an established image. Most successful acquisitions are accomplished by knowledgeable, adequately-financed business people. When acquiring a company, it is important to understand the numerous tax and financial maneuverings available for acquiring and financially restructuring an existing company. Before agreeing to purchase, find out why the business is for sale. Is it profitable? Does it have a strong reputation? Ask for copies of financial statements for at least three years and have your accountant look at them. If you find red flags, run the other way. Don't make any decisions without the approval of your accountant, lawyer and banker. They may see issues you don't.
- Purchase a franchise business: This option allows you to "purchase" a known trademark for delivery of products or services using an established system. You will usually pay a franchise fee, ongoing royalties, and the costs of getting into the franchise. While it can be comforting to have ongoing support services, collective buying and advertising power, and market research, not every franchise is a guarantee of success. Many small, less expensive franchises are under-funded, lack a good training program, and fail to provide the necessary support. Large, well-known franchises may be too costly for beginning entrepreneurs. This can be an attractive starting point but be sure to thoroughly check out the franchise.
- Next: Once you've narrowed down and refined your idea, you need to determine whether this business will be successful.