ENTR FPX 5412 Assessment 1

Starting a New Business

Entrepreneurship comes with various advantages, including the possibility of remaining your own boss, savoring the rewards of achievement and development, and even having the flexibility to determine your work hours. As an independent individual being a self-employed entrepreneur, your destiny and its decisions are at your fingertips (Williams, n.d.). Your entrepreneurial benefits simply depend on your business plan. These rewards could be financial success, personal development, or simply the satisfaction of creating something out of nothing. Moreover, being able to create your own schedule is another major advantage, though to enjoy that, at first, there could be longer working hours. As the business expands, your schedule can be more manageable.

On the other hand, the risks involved in launching a new business are high and must be appropriately analyzed for a successful venture. These risks include startup costs, marketplace competition, and the entrepreneur’s strengths and weaknesses. It is also necessary for entrepreneurs to ask themselves questions such as whether they are suited to be self-employed, how much money they need to begin, and whether or not they will need outside capital, i.e., a loan. It is also necessary to conduct thorough research on competitors and how the firm will succeed in the market (Williams, n.d.).

Entrepreneurs must also consider what business they must start and analyze the factors that will enable them to thrive. It is generally promoted to “do what you know.” Reflecting on past work experiences and considering how one might package those skills into product or service offerings can provide an individual with a starting point for business concepts. Conducting extensive market analysis is necessary to formulate a solid business plan because it educates entrepreneurs about their own skills and the market they are entering. It enables them to stand out from others and reach their target customers more effectively (Monosoff, n.d.).

Buying an Existing Business

Purchasing a business that already exists can have a number of advantages, such as an existing customer base and established market reputation that offers a platform to expand from. One key advantage is that the business model has already been proven to work. Since you are the buyer, you already possess established customer relations with those who have funded the business before, and therefore you can then focus on expansions and improvements without needing to create a customer base from scratch (IBBA, n.d.).

While offering a business offers risks, buying a business also comes with risk since it could have immediate changes needed, an unfavorable reputation, or challenges to individualizing the business. For example, if a company was virtually bankrupt, then some quick changes are likely to restore it to equilibrium. The reputation can also make success harder, with the trouble of being able to claim the company as yours. Such factors should be closely evaluated when purchasing an existing company, especially where the company has been struggling in the marketplace (IBBA, n.d.).

Buying a New Franchise

Starting a new franchise offers many benefits, including access to a support and education system, reduced risks, and a pre-existing customer base. Franchise businesses also provide extensive training and support to their franchisees, including orientation to the company’s business model. With the support of an established brand, franchisees can access industry experience and knowledge that may take years to develop on their own (Review, n.d.).

Also, there is minimal risk when franchising because it is supported by a larger company. Franchisees have the advantage of a built-in client base and potential workforce pool. Well-known franchises like Starbucks tend to have consistent customer flow provided that franchisees provide quality customer service (Review, n.d.). However, franchising is not without risk, such as the initial high costs of investment, loss of creative control, and no financial privacy. Growing a franchise is costly, especially for well-established brands, and franchisees must adhere strictly to the company’s business concept with little leeway for creative pursuits. Franchisors also consolidate financial data from franchisees, providing franchisees with little financial privacy regarding the operation of their businesses (Review, n.d.).

Which Model Suits You Better?

Each business model has its strengths, but in our situation, starting a new business from the ground up seems the best course. At this point, our woodworking business is something we do for fun, and we have waited to turn it into a serious business until I complete my business studies. We produce all kinds of products, from furniture to decorative signs, and my husband, a veteran, has found that woodworking is a calming activity.

Our goal is to expand the business to the point where we can have a physical location where customers can visit. We currently have our home decor products slotting into a rustic, western niche that is suitable for the local market. Having the ability to do custom projects for clients means we get to use creativity while fulfilling their vision. Having done some background market research, we’ve found that individuals do desire woodcraft goods, but there is considerable competition. We will grow by first finding a customer base through word of mouth with family and friends who will get the word out.

ENTR FPX 5412 Assessment 1: New Business to Consider

Review. (n.d.). The Pros and Cons of Buying a Franchise: Is It Right for You? Franchise Business Review. https://franchisebusinessreview.com/post/franchise-advantages-disadvantages/

Williams, M. (n.d.). Benefits of Starting a Business. Wolters Kluwer. https://www.bizfilings.com/toolkit/research-topics/launching-your-business/benefits-of-starting-a-business