| Each option involves some element of risk
| |
| | few years?Also, keep in mind that you may
|
| and reward. Whichever option you choose,
| |
| | be taking on a heavy load of debt in
|
| however, owning your own business offers
| |
| | acquiring the business. A business that
|
| a chance at more freedom and greater
| |
| | is marginally profitable may not be able
|
| financial rewards. So, you're thinking of
| |
| | to both pay off the debt service on the
|
| going into business for yourself. You
| |
| | loan and pay you a living
|
| have several options available, and all
| |
| | wage.FranchisesWhen you buy a franchise,
|
| involve some degree of risk. Do you want
| |
| | you also buy marketing support, business
|
| to create a start-up operation? Perhaps
| |
| | strategy, name recognition, and
|
| you are planning on buying an existing
| |
| | assistance with site location (if it's a
|
| business. Or, you may be considering the
| |
| | retail operation), among other
|
| purchase of a franchise
| |
| | things.However, you also give up some
|
| operation.Start-upsIf you are planning on
| |
| | things. You will never have the final say
|
| building your business from the ground
| |
| | in all decisions, because franchisors
|
| up, you are taking a bigger risk than if
| |
| | typically retain rights to ensure that
|
| you were buying an existing business or a
| |
| | your business is run their way. Also, you
|
| franchise. Existing businesses and
| |
| | won't be entitled to all of the profits
|
| franchises have some operating history
| |
| | of your business, because franchisors
|
| that you can use to gauge the likelihood
| |
| | typically take a percentage as part of
|
| of the success of the business. By
| |
| | their fees. Finally, you may be limited
|
| comparison, with a start-up business, you
| |
| | in your decision-making processes (e.g.,
|
| naturally think that you will succeed,
| |
| | some franchisors require you to buy
|
| but there are fewer guarantees.Most
| |
| | materials from their suppliers).If you
|
| successful start-ups don't actually begin
| |
| | are thinking of purchasing a franchise,
|
| with a new, innovative product. Instead,
| |
| | it is very important to thoroughly
|
| they begin with a proven product or
| |
| | investigate the company. Remember, you
|
| service (start-up owners often open
| |
| | are doing more than just purchasing a
|
| competing businesses in areas in which
| |
| | name--the franchisor is going to be your
|
| they are familiar) and become innovative
| |
| | business partner. Make sure that he or
|
| after the new venture has generated some
| |
| | she doesn't want only your money and then
|
| level of profit and success.Because your
| |
| | move on to the next potential
|
| start-up has no previous track record
| |
| | buyer.Franchisors are required to
|
| (even if you have had success in your
| |
| | disclose lots of information to potential
|
| field), you will first need to raise
| |
| | franchisees. Do your homework. Talk not
|
| enough financing to make a go of it.
| |
| | only to successful franchisees but also
|
| Banks or investors will want to see a
| |
| | to ones who have failed. If several
|
| plan of attack before they will approve a
| |
| | former franchisees tell you that the
|
| loan for your start-up. Therefore, your
| |
| | company didn't fulfill the promises of
|
| first step should be to create a strong
| |
| | the franchise agreement, beware.Make sure
|
| business plan.The business planA
| |
| | every representation is made to you in
|
| well-developed business plan serves
| |
| | writing before you purchase. Take notes
|
| several useful purposes. It helps to
| |
| | of everything said to you, and have the
|
| organize thoughts and ideas about how the
| |
| | franchisor sign off on them. That way,
|
| business should be developed. It also
| |
| | you will have a record of what was
|
| creates a plan of attack that will help
| |
| | represented to you if things go
|
| you stay focused. And, it will assist you
| |
| | wrong.Important Disclosure NoticeThe
|
| in getting financing. There are several
| |
| | material contained herein is not intended
|
| important elements to a well-prepared
| |
| | to provide specific legal or tax
|
| plan:Strong introduction: The cover page,
| |
| | advice.It provides only broad, general
|
| executive summary (essentially an
| |
| | guidelines and strategies that may be
|
| overview of the plan), and table of
| |
| | helpful in shaping your financial
|
| contents will be the first elements that
| |
| | thinking about investment objectives and
|
| potential financiers or investors will
| |
| | risk management.The information that
|
| see. If these aren't strong, potential
| |
| | follows is intended to serve as a basis
|
| financiers may not take you seriously
| |
| | for further discussion with your
|
| enough to get to the heart of your
| |
| | financial, legal, tax and/or accounting
|
| plan.Business description: Whether you
| |
| | advisors. It is not a substitute for
|
| are using the business plan to get
| |
| | competent advice from these advisors. The
|
| financing or create a focus of how your
| |
| | actual application of some of these
|
| business should be run, you need to
| |
| | concepts may be the practice of law and
|
| present a clear vision of what your
| |
| | is the proper responsibility of your
|
| business will be. The description should
| |
| | attorney. The application of other
|
| include how you want your business to be
| |
| | concepts may require the guidance of a
|
| positioned in your industry, what will
| |
| | tax or accounting advisor. The company or
|
| make your business unique, the products
| |
| | companies listed below are not authorized
|
| or services that you will provide, and
| |
| | to practice law or to provide legal, tax
|
| how you plan on pricing within the
| |
| | or accounting advice.Although great
|
| industry. Do you want to be the low-cost
| |
| | effort has been taken to provide accurate
|
| provider, or the high-end specialist?
| |
| | data and explanations, and while the
|
| Market positioning: If you want to
| |
| | sources are deemed reliable, the
|
| attract investors to your business, you
| |
| | information that follows should not be
|
| need to convince them that a need in the
| |
| | relied upon for preparing tax returns or
|
| marketplace exists for what you are
| |
| | making investment decisions. This
|
| proposing. This section needs to include
| |
| | information has neither been audited by
|
| details on the size of the potential
| |
| | nor verified by the company or companies
|
| market for your business, how your
| |
| | listed below and is therefore not
|
| business can benefit through sales inside
| |
| | guaranteed by them as to its
|
| the market, and how you plan on
| |
| | accuracy.This information includes
|
| succeeding against your
| |
| | changes made by the Economic Growth and
|
| competitors.Financial objectives: This is
| |
| | Taxpayer Relief Reconciliation Act of
|
| perhaps the most important part of your
| |
| | 2001 (EGTRRA). Many of these changes
|
| business plan. Here, you need to convince
| |
| | phase in or out according to varying
|
| your potential backers or lenders that
| |
| | schedules and ultimately all of the
|
| your business will make a sound
| |
| | changes made by EGTRRA are scheduled to
|
| investment. You'll want to show that you
| |
| | expire at the end of 2010, unless
|
| have evaluated the attendant risks and
| |
| | Congress takes action in the
|
| rewards of your proposed business. You'll
| |
| | interim.Long-Term Care Insurance material
|
| also need to project cash needs and
| |
| | may NOT be used with the public in the
|
| expected income, and present a cash flow
| |
| | following states...Alabama, Arizona,
|
| statement.Other areas: A good business
| |
| | Arkansas, California, Delaware, Florida,
|
| plan will also cover in some detail your
| |
| | Georgia, Idaho, Indiana, Kansas,
|
| marketing plan, a discussion of how you
| |
| | Kentucky, Louisiana, Maryland, Michigan,
|
| plan on developing products to bring to
| |
| | Minnesota, Montana, New Mexico, North
|
| market (if the business is a
| |
| | Carolina, Oklahoma, Oregon, South Dakota,
|
| manufacturing concern), and so on.Buying
| |
| | Texas, Utah, Vermont, Virginia, West
|
| an existing businessThe obvious advantage
| |
| | Virginia.Securities and Investment
|
| to buying an existing business is that it
| |
| | Advisory services offered through:
|
| has a proven track record of success. But
| |
| | New England Securities Corporation
|
| that doesn't mean that there are no
| |
| | Member NASD, SIPC
|
| possible pitfalls that you should
| |
| | 501 Boylston Street, Boston,
|
| avoid.Perhaps the greatest problem in
| |
| | Massachusetts, 02117Insurance Products
|
| buying an existing business is that you
| |
| | Offered through:
|
| might not acquire the expertise and
| |
| | New England Life Insurance Company
|
| services of the existing owners, who have
| |
| | 501 Boylston Street, Boston,
|
| often accumulated goodwill with their
| |
| | Massachusetts, 02117Long Term Care
|
| customers or clients. However, when a
| |
| | Insurance Offered through:
|
| business is bought, it is not unusual for
| |
| | Metropolitan Life Insurance Company, New
|
| the previous owners to stay on for a
| |
| | York, NY and other unaffiliated insurers
|
| period of time to assist with the
| |
| | through New England Financial, Boston,
|
| transition and to make introductions to
| |
| | MA, an affiliate of Metropolitan Life
|
| clients in an attempt to transfer some of
| |
| | Insurance Company.Please note that most
|
| that goodwill.Consult qualified
| |
| | long-term care insurance policies contain
|
| professionals to properly evaluate the
| |
| | certain exclusions, limitations, waiting
|
| information that the owners of the
| |
| | periods, reduction of benefits and terms
|
| existing business may provide you. Also,
| |
| | for keeping them in force. Your
|
| make sure that the reasons why the
| |
| | representative can provide you with full
|
| business is on the market are true. Is
| |
| | details and cost
|
| the owner really planning on retiring to
| |
| | information.L06019MJM(exp0108)MLIC-LDHarv
|
| Florida, or is he or she just trying to
| |
| | ey Davis J.D. is a financial advisor with
|
| escape the crushing debt that the
| |
| | the Chesapeake Financial Group.
|
| business has accumulated over the last
| |
| |
|
