New Business Rather Than Buying

¶ … new business rather than buying an existing business. Is it really worth it? This is the new question every budding entrepreneur must ask him or herself, before embarking upon a new venture. Imagine a hypothetical amateur cook named Wes, who wants to begin a new business called Wes' Wings -- chicken wings and fries, any way the customer desires, from mild to the hottest mouth-singing seasoned wings of death.

Immediately, his friends will dissuade him -- why not just open up a tried and tested franchise, like a McDonald's or KFC? The formulaic attractions, ease of following standard operating procedures that have been tested, and the already-established market of franchises explain how major chains dominate almost every industry, from food to furniture, all over the nation. or why not at least buy an existing business that is for sale, Wes' friends may counter. But entrepreneurship has many advantages.

First of all, an entrepreneur owns his or her unique idea, and can lay the foundation principles for making the business 'work.' When buying an old business, the entrepreneur buys the old business' problems, and in the case of a franchise, any negative publicity that may attach itself to the chain. An entirely new business can lay the groundwork for workable standard operating procedures within the local environment, and address an untapped need.

Also, a new business that is not a franchise does not have to pay a fee to the founder. If the idea is very successful, the entrepreneur can create his or her own franchise, and generate an even larger profit. Thirdly, if the new business is really unique, then it can have even greater staying power than an old business, and will not fall prey to the tendency of the market to eventually become supersaturated with a certain formulaic type of business, like sub-shops or hamburger joints.

And finally, there is the pride of creating something that is truly unique -- running any business is a financial risk and requires such long hours, why not take complete pride in ownership and creation, rather than sweat and toil to realize the creative vision of another person? Define entrepreneurship and list 3 advantages, 3 disadvantages, and 3 pitfalls. An entrepreneur is "a person who organizes and manages a business undertaking and assumes a risk for the sake of profit" ("What is an entrepreneur?" 2007, Zero Million).

Advantages: Being able to set your own hours, and not being subject to the whims of a manager or time clock. Being able to take pride in ownership and to realize your own creative vision, rather than having to enforce decisions you do not personally agree with. The excitement of knowing that everyday will be different, and being able to change things if you feel that something is not working within the business structure. Disadvantages: Having to pay for your own health insurance, and the benefits of employees.

The lack of security -- having to spend your own money to begin the enterprise, and living in fear that it will fail, and also that your finances, and your family's finances, may be in long-term jeopardy as a result. Entrepreneurs have to ask themselves if the responsibility they are assuming is 'worth it.' For a dream with a statistically low probability of success, as most new ventures fail, they are giving up many years of their lives where they could be earning a steady paycheck.

Also, because beginning a new business is a 24/7 workload, they will also have to make a considerable sacrifice of their time and personal life as well. Pitfalls Don't confuse your skills in the field of business you are going to enter with business skills in general.

You might be a very talented cook/golfer/writer but that doesn't mean that you have the organizational skills to run a restaurant, budget the inventory and track the seasonal demand for a golfing store, or have the hard-nosed discipline to hire and fire the right people to run a book store. Make sure everyone in the family is 'on board' about the decision for you to become an entrepreneur.

Starting a new business is a considerable sacrifice of time and money, not just for the owner, but the owner's family. Know that the opportunity cost of starting a business isn't just financial, but of time and lost earnings during the time the business runs at a loss, when you could be doing other things. Discuss how small business has added to economic growth.

There are roughly "twenty-five and a half million small businesses in the United States, driving the longest period of economic growth in our nation's history" noted Aida Alvarez in 2000, when she was the administrator of the Small Business Administration (Alvarez, 2000, CNN.com). On a very basic level, every large, multimillion dollar corporation was once a small business. Bill Gates began Microsoft out of his garage, as did Apple's founder Steven Jobs.

But even small businesses that do not expand on such a monumental scale are a creative source of new ideas and talent that nurture their surrounding communities, and create opportunities for new economic growth. They employ individuals in the local community, and inspire individuals in the local community. Also, they are able to tailor their needs to the neighborhood's demographic, and match their inventory and structure to the demand of a particular and unique demographic.

Because small business owners live within the community, the revenue they generate in the area is, more often than not, funneled back into the local economy, as they buy supplies or simply personal goods to support their family. Define a family business and describe the business pattern, governance pattern, and the family pattern a family business will encounter. As opposed to a publicly-traded company, which is technically owned by shareholders, or a single proprietorship, a family business is owned and controlled by a family, however large or however small.

It might have begun on a very small scale, led by a few family members who wished to use the family's unique resources or skills, like bread baking, or selling pizza in an inherited restaurant space, but typically all members of the family become involved, from running the counter, to assisting in delivery, even though some outsiders may be hired. Staring the business may have realized the dream of one or all of the founders. However, there are some unique problems that family businesses may face.

Most obviously, personal conflicts can arise between family members and impede the business from running smoothly. Children may experience a conflict between furthering their education and exploring their own interests and working at the business. Also, the second generation may not have the business acumen of the elder generation, and once the.