Choosing Your Business 5
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Do I need to know a lot about a business before starting it if I'm going to buy a franchise? Won't the franchiser teach me all I need to know?
People who buy a franchise or a home "business opportunity" without knowing or learning anything about the industry in advance are taking a big risk. Without some idea of what the business is all about, you have no way of determining if you will like the business, if there is a market for its products and services in your area, or if you have what it takes to bring in a steady stream of customers. Additionally, while a true franchise provides training, less expensive turnkey businesses and opportunity ventures often provide only a manual and perhaps a little phone support to help you get started.
Where do I get the money to start a business?
Most people dig into their own pockets to start their businesses. They pull extra income from weekly paychecks, suck it out of savings accounts, take out personal loans or second mortgages, use charge cards to buy equipment, use inheritances or, occasionally, pension funds, borrow from relatives, barter, make deals, and so on.
How much time should I spend investigating an idea?
As much time as you need to get the facts, but no more. Remember, no matter how good your idea is, you can't turn it into a business until you act on it. Do take the time to gather all the details you need to determine your chances for success, but don't get so tied up looking into other businesses that you never get your own going. If you are procrastinating because you're worrying about failure, try starting the business on a very limited scale to allow you to judge your interest and chances for success if you were to go after the business in a bigger way.
How much money will I need to start a business?
People have started profitable businesses with not much more than the sweat of their brow, but realistically you should count on having to spend a minimum of a few hundred dollars, even if the business you want to start can be run without purchasing equipment or inventory. The reason: you will need money for business cards, stationery, phone calls, office supplies, postage, and perhaps for ads or brochures. (See chapter 7 for planning information.)
Can I start a newsletter with $200?
No. Even if you were to do all the writing, editing, and layouts yourself, you will still have printing, marketing, and mailing and distribution costs. To find out how much money you will need, determine how many pages the newsletter will be, what it will cost to print it, and what it will cost to place ads, create and send out sales literature, and distribute the newsletter to your readers. If the newsletter will be supported by advertising or by subscription fees, they may take time to collect, so allow yourself enough money both to market the newsletter effectively and to get out several issues.
Whether you are creating a newsletter or any other type of business, working out the cost figures is essential- If you see that the costs are higher than you can afford, rethink your idea. Determine if the skills needed for the original idea could be used to start a business that takes less cash. For instance, if you have the skills to write, edit, and produce a newsletter but not the money to print, market, and mail it, consider doing sales and marketing literature for other businesses. You probably could get that type of business started with $200 if you had another source of income to pay your bills until the service developed steady customers and income.
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