When it comes to entrepreneurship, there are many pathways you can take: Starting your own business from scratch, buying into a franchise, creating a family-owned business, buying an existing business, and licensing your product idea.
But which one is best for you and the kind of business you want? Here are four important considerations when choosing the best entrepreneurship pathway for you:
Upfront capital and financing
Estimate the start-up capital you are prepared to invest in your business in dollars. If you are thinking of buying a franchise, consider that your estimated start-up capital should be between 10–30% of your franchise fee. Your ability to secure financing for your small business will depend upon your five Cs of credit: your character, capacity to repay, your capital (net worth), collateral (assets to secure debt) and conditions (of the owner, the franchise and the economy).
How long do you want to run this business? What return on investment (ROI) were you hoping for?
Independence, autonomy, experience
For many people, entrepreneurship is a way of becoming your own boss. The thought of having to operate within strict rules and requirements of a franchisor is not an option. Others prefer the security of franchise ownership and, sometimes, a family-run business.
Failure rate and overall risk
Could you handle losing your business and your investment? Could you handle letting employees, customers and suppliers down if you were forced to close your business? These are questions you need to answer honestly. Comprehensive small business training will give you all the tools you need to help improve your odds of success.