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Operating a Franchise

Advantages, disadvantages of franchise

It is quite likely that having decided to start your own business you might consider a franchise. A franchise is basically the sharing of a business idea; you will be buying the right to use the name of an already established business, that is familiar to many people. The person selling the opportunity is known as the franchiser and you will be known as the franchisee. Examples of popular franchises are Kentucky Fried Chicken (KFC) and MacDonald’s. A franchise opportunity will have its pros and cons.

ADVANTAGES

  • You will be acquiring a product that is already tried and tested.
  • You will likely be given help with staff training.
  • You won’t have to worry about stock as the franchiser usually supplies stock.
  • You are given business advice to help you, such as that of location choice, staffing hours and regulations, advertising and promotion.
  • It is easier for you to acquire finance. Banks will feel more secure loaning money to undertake a venture that has already acquired a status in the market place

DISADVANTAGES

  • The franchiser has the real control; you do not have as much autonomy. You probably at some point have patronized or entered a franchise, or maybe quite a few, have you noticed that there is a large similarity in the products offered and also the look of the organization? That is because things are pretty much prescribed for each of these ventures
  • Franchise ventures are usually very expensive and after paying a hefty price to acquire a franchise you will still have to pay a levy on sales or profit to the franchiser
  • You will not have much flexibility since pretty much everything is chosen for you. You must use the franchiser’s name, stock and follow business practices laid down by them

Having said that, franchises can be quite lucrative ventures; most are expensive but depending on your area of interest you might find a franchise to suit your needs.

If you decide to buy a franchise, it is advisable that you seek the advice of an experienced lawyer who is familiar with franchise agreements. Make sure that you understand the terms of the agreement before you sign.

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Sources of Business Ideas

When we decide to start a business or look at self-employed income options, we are often left wondering what to do. Business ideas however can be easy to come by. Many people start a business in an area of interest, such as writing or bookkeeping. The possibilities are however endless and they can come from many different sources. If you are currently thinking of starting your own business, but are not sure what business you want to start, then maybe reading this article could help you on your way. Below are some sources of business ideas:

Present / Previous Employment

A large number of small businesses are inspired by present or previous jobs. If you were great at your job, it could be a good idea to start your business in this field, as you would bring experience and know-how to your new business.

Hobbies

What is it that you like to do? Often we are prepared to put a lot of time, effort and money into a hobby, why not consider making money from it? Many writers, for example, first started writing as a hobby.

Niche Markets

Sometimes small pockets of a market are not being satisfied by the general market; make an observation, do your research – Is there a need you could fill?

Personal Observation

Look around you, is there a need in your community that is not being satisfied or maybe the need is in a neighbouring community?Business Ideas

By-products

Many products are derived from the waste of other products, for example, using scraps of materials to make colourful rugs for children or using coconut trash to make coconut cakes. Sometimes businesses dispose of things that could be used to make other products or charge a minimal fee for the waste.

Is There a Product on the Market That Needs Improvement?

You are a consumer, there might be products that you think could do with more or less of particular ingredient, if you think you could do a better job, and can source the necessary assistance…well make a start.

Distribute Someone Else’s Products

You do not have to create your own product, why not market or distribute someone else’s product for a percentage of sales?

Export

Find market overseas for locally produced goods; research could prove integral to starting. Perhaps you have travelled to other countries and have noticed a lack in certain areas of the overseas market. Get information from the relevant authorities on how to proceed.

Buy Downtown, Resell Uptown

You will be surprised at the vast differences in prices for similar products in these two markets, other people capitalise on the price differences, why not you!

Business, Magazines, Newspapers, Trade Magazines and Newsletter

These are also good sources of ideas.

Government Agencies

There are certain government bodies that can provide information about gaps in the market, make use of them.

Franchise

If you have the cash and do not mind giving up some control (much control in some instances, depending on the business) this could be an option for you. There are many franchise businesses out there, check them out, and see if any suit your interest or your pocket.

Brainstorming - business ideas

Brainstorming

Gather a group of family and friends, use this group to suggest and evaluate business ideas.

Current Market

Check market trends and see what’s happening. Which products are being sold quickly in the market at the moment?

Look at Importations

Are there products being imported that you could produce at the local level? If particular products are being imported on a consistent basis, this is an indication that there is definitely a market that is not being adequately provided for by local producers. Many people are willing to support local producers even at the expense of paying a bit more for the product.

Supplying Raw Material

Larger businesses sometimes depend heavily on small firms to supply raw materials. For example, larger firms in the canning industry depend on small farmers who produce fruits and vegetables. Find out if there is a market for raw materials that you could fill.

Invent a Business

Many of life’s pleasures were born from simple ideas. If you have an idea that could prove beneficial, do not just push it aside because it is new; entrepreneurship is about innovation.

Business ideas

Buy an Existing Business

Many business owners start by buying an existing business. If you know of viable businesses being sold and are able to make a purchase, consider the possibility of owning one.

Specialised Products

– Some goods and services are too specialized for large firms and work better for small businesses. Find out more about these.