PowerPoint Presentation

Section 3.2
 Pages 43-49
3.2
Starting Versus Buying a
Business
What you’ll learn
 The
challenge of entering a
family business
 The benefits and drawbacks of
buying a business
 The responsibilities of starting
your own business
3.2
Starting Versus Buying a
Business
Why it’s important
 Many
people think that being
an entrepreneur means starting
a business from scratch.
 Many successful entrepreneurs
buy an existing business then
make it better.
3.2
Starting Versus Buying a
Business
Key Terms
goodwill
franchise
franchisee
franchiser
business broker
3.2
Starting Versus Buying a
Business
I. SHOULD YOU ENTER AN
EXISTING BUSINESS?
A. Being opportunistic does not
always mean starting a
business from scratch.
3.2
Starting Versus Buying a
Business
B. You can enter a family
business or buy an existing
business.
3.2
Starting Versus Buying a
Business
Discussion Starter
Make a list of local businesses
in the following categories:
1. Family Business
2. New Business
3. Franchise
3.2
Starting Versus Buying a
Business
II. ENTERING THE FAMILY
BUSINESS
A. Family businesses are an
important part of the U.S.
economy.
3.2
Starting Versus Buying a
Business
B. Family businesses are not
generally high-growth
businesses, but some have
become very large.
3.2
Starting Versus Buying a
Business
III. THE UP SIDE – AND
THE DOWN OF FAMILY
BUSINESSES
A. Only about one-third of
family-run businesses
survive to the second
generation.
3.2
Starting Versus Buying a
Business
B. The trust and togetherness a
family shares can be a real
asset.
C. A disadvantage is that family
owners can never get away
from the business.
3.2
Starting Versus Buying a
Business
IV. QUESTIONS TO ASK
BEFORE ENTERING A
FAMILY BUSINESS
A. Do I have the ability to
work for a family
member?
3.2
Starting Versus Buying a
Business
B. Do I get along well with these
family members?
C. Do we share the same business
goals?
D. Do we share the same general
goals for our personal lives?
3.2
Starting Versus Buying a
Business
Critical Thinking
Why are family businesses
not always perpetuated by
second generations?
3.2
Starting Versus Buying a
Business
V. BUYING A BUSINESS
A. Buying a business may be
less risky than starting one
from scratch.
B. Buying a business may be
attractive to one without
business experience.
3.2
Starting Versus Buying a
Business
VI. KINDS OF BUSINESSES
AVAILABLE
A. One can buy an existing
business or the right to set
up a new business
patterned on an existing
model.
3.2
Starting Versus Buying a
Business
B. An existing business already has
a location and physical plant.
C. Customer loyalty to an existing
business, or goodwill, is an
extremely valuable business
asset.
3.2
Starting Versus Buying a
Business
D. McDonald’s is an example of a
franchise. A franchise is a legal
agreement to begin a new
business in the name of a
recognized company.
3.2
Starting Versus Buying a
Business
E. The purchasers of franchises
pay a percentage of the
profits annually to the owners
of the franchise.
3.2
Starting Versus Buying a
Business
F. The buyer of a franchise is
called the franchisee.
G. The seller is the franchiser.
3.2
Starting Versus Buying a
Business
Critical Thinking
What problems might a
franchiser have?
3.2
Starting Versus Buying a
Business
VII. A GOOD DEAL OR A
BAD ONE?
A. Acquiring an existing
business has
advantages.
3.2
Starting Versus Buying a
Business
1. Location
2. Goodwill
3. Staff
4. Plant
5. Inventory
6. Established procedures
3.2
Starting Versus Buying a
Business
B. There are can be disadvantages
to buying a business.
1. Lack of success
2. Poor reputation
3. Dated inventory
4. Poorly maintained facilities
3.2
Starting Versus Buying a
Business
VIII. WHERE TO FIND A
BUSINESS
A. Read the newspaper.
B. Network with others.
C. Hire a business broker, a
person who brings buyers
and sellers together.
3.2
Starting Versus Buying a
Business
IX. QUESTIONS TO ASK
YOURSELF BEFORE
BUYING A BUSINESS
A. Is the business interesting?
B. Why is the owner selling?
C. What is the potential for
growth of the business?
3.2
Starting Versus Buying a
Business
X. STARTING YOUR OWN
BUSINESS
A. There is more effort
involved before even
opening the doors to
business.
3.2
Starting Versus Buying a
Business
B. The principal benefit is that
you can do things your own
way.
3.2
Starting Versus Buying a
Business
XI. QUESTIONS TO ASK
YOURSELF
A. Do I have the motivation to
start from nothing?
3.2
Starting Versus Buying a
Business
B. Do I have sufficient knowledge
of basic operations to undertake
the business?
C. Do I have enough financial
resources to start from scratch?
3.2
Starting Versus Buying a
Business
XII. THE CREATIVITY
FACTOR
A. Think creatively about the
business you choose to
enter.
B. Constantly be on the
lookout for opportunity.
3.2
Starting Versus Buying a
Business
End of Section 3.2