methods to initiate ventures
TRANSCRIPT
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Agenda
Major pathways and structures for entrepreneurialventures
Factors involved in creating a new venture
Elements involved in acquiring an established
venture
Franchise and its structure
Benefits and drawbacks of franchising
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The Pathways to New Venturesfor Entrepreneurs
Acquiring anExisting Venture
Creating theNew Venture
Obtaining aFranchise
Pathways to NewVentures
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Creating New Ventures
Approaches toCreating a NewVenture
New-NewApproach
New-OldApproach
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Emerging Opportunities
Green Produc tsOrganic foods
Organic fibers/textiles
Alternative Energy
Solar
Biofuel
Fuel cells
Energy conservation
Health CareHealthy food
School and govt.-
sponsored programs
Exercise
Yoga
Niche gyms
Children
Nonmedical
Pre-assisted livingAssisted living transition
services
Niche Consum ables
Chocolate
Burgers
Coffee houses
Exotic salads
Home Automat ion andMedia Storage
Lighting control
Security systems
Energy management
Comfort management
Entertainment systems
Networked kitchen
appliances
Emerging Internet Opportunities Emerging Technology Opportunities
Mobi le Advert is ing
Cell phones
PDAs
Concierge ServicesNiche Social Networ ks
Seniors
Music fans
Groups of local users
Pet owners
Dating groups
Virtual Economies
Online auctions
Education al Tutoring
Human Resou rces ServicesMatchmaking
Virtual HR
Online Staffing
Nanotechnology
Wireless Technolo gy
Source: Steve Cooper, Amanda C. Kooser, Kristin Ohlson, Karen E. Spaeder, Nichole
L. Torres, and Sara Wilson, 2007 Hot List, Entrepreneur(December 2006): 8093.
Trends Creating Business Opportunities
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Source:William J. Dennis,A Small Business Primer(Washington, DC: NationalFederation of Independent Business, 1993) 27. Reprinted with permission.
Sources of New Business Ideas Among Menand Women
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Examination of the Financial Picture
Upside gain and downside loss expectations The profits the business can make and the losses it
can suffer.
How much money will the enterprise take in if all goes well?
How much will it gross if operations run as expected?
How much will it lose if operations do not work out well?
Risk vs. reward analysis
Points out the importance of getting an adequatereturn on the amount of money risked
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Checklist for Estimating Start-Up Expenses
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Checklist for Estimating Start-Up Expenses(Contd)
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Acquisition of a Business Venture
Acquiring aBusiness Venture
Asking Key Questions
Examinationof
Opportunities
Evaluation ofthe Venture
PersonalPreferences
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Advantages of Acquiring an Ongoing Venture
Buying an
Ongoing
Venture
Purchasing at a
Good Price
Reduced Time
and Effort
Less Fear about
Successful Future
Operation
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Evaluation of the Selected Venture
Factors Affecting
Sale of the
Venture
Assets of the
Venture
Profits, Sales, and
Operating Ratios
The Business
Environment
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Negotiating the Deal
Factors AffectingNegotiations
Alternatives
Time Pressure
Information
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1. Have a seller retain a minority interest in the business2. Never rely on oral statements
3. Have an accountant examine the books and check the
cash flow
4. Investigate, investigate, investigate!
5. Interview the employees
6. Find out the real reason the company is for sale
Dos and Donts of Buying a Business
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Franchising: The Hybrid
FranchisingAny arrangement in which the owner of a trademark,
trade name, or copyright has licensed others to use it
in selling goods or services
FranchiseeA purchaser of a franchise
Franchisor
The seller of the franchise
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How a Franchise Works
Franchisee Obligations:1. Make a financial investment in the operation
2. Obtain and maintain a standardized inventory and/or
equipment package usually purchased from the
franchisor3. Maintain a specified quality of performance
4. Follow a franchise fee as well as a percentage of the
gross revenues
5. Engage in a continuing business relationship
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How a Franchise Works (Contd.)
Franchisor Provides:1. The company name that provides drawing power
2. Identifying symbols, logos, designs, and facilities
3. Professional management training for each
independent units staff4. Sale of merchandise necessary for the units
operation, equipment to run the operation, and the
food or materials needed for the final product
5. Financial assistance, if needed6. Continuing aid and guidance to ensure that
everything is done in accordance with the contract
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Franchising
Advantages Training and guidance
Brand-name appeal
A proven track record
Financial assistance
Disadvantages Franchise fees
Franchisor control
Unfulfilled promises of
franchisor
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Evaluating the Franchise Opportunity
Seeking
Professional Help
Investigating the
Franchisor
Finding Reliable
Information
The Franchise
Opportunity Decision
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THANK YOU!