franchising

1. ● IS FRANCHISING A GOOD OR BAD INVESTMENT?
Owning A Franchise – Good Idea or Bad Idea?
When it comes to starting your own business, many
people consider buying a franchisee an easy way to make
a success. While this could be correct, not all franchises
are the same, and not everyone is cut out to be a
franchisee.
Here are the advantages and disadvantages of owning a
franchise and what to expect.
Advantages of Owning A Franchise
1. More likely to succeed
When you buy a franchise, you are buying an established
idea or brand that has already proved to be successful.
It is shown that franchisees stand a much better
chance of success than people who start their own
independent businesses.
2. Help with getting set up and continuous help
You get a lot of help setting up your franchise and
running it afterwards. When you buy a franchise, you get

2. all the equipment, supplies and training you need to start
the franchise.
3. Make money
A franchise business can be very profitable.
4. Well-known brand
Many well-known franchises have very wide brand-name
recognition. When buying a franchise, you are almost
guaranteed to have an immediate customer base.
5. Franchisor buying power
Your franchise will have the benefit of lower costs due to
the bulk buying opportunity and benefits available to the
franchisor that would be passed onto you as franchisee.
Disadvantages of Owning A Franchise
1. Minimal flexibility
One of the main disadvantages of buying a franchise is
that you have to do it the franchisor’s way. There is not
much room for you to make your own decisions.
2. Franchise fees
Other than your initial joining costs, one of the biggest
ongoing costs are the franchise fees that are payable to

3. the franchisor on a monthly basis. This is usually based
on a percentage of your franchise turnover.
3. Lack of on ongoing support
Even though many of the franchisors offer ongoing
support to their franchisees, there are those who only
assist with the set up and then leave you on your own.
4. Highly competitive
Be careful of buying a lesser known franchise. Just
because a business is offering franchise opportunities,
doesn’t mean there is any guarantee that the franchise
you buy will be successful. There are many franchises out
there and everyone wants a “piece of the pie”.
5. Initial costs of buying a franchise
Buying into well-known franchises are very expensive.
You will need to have your own capital to contribute and
will, in most instances, require further funding from a
financial institution.
Is Owning A Franchise for You?
Buying a franchise is like buying any other business. It is
important to do your due diligence and investigate the
franchise properly. However, if you are the right sort of

4. person for a franchise operation and pick the right
franchise, being a franchisee can indeed be the path to
success.
● IMPORTANCE OF A BUSINESS PLAN
A business plan is a very important strategic tool for
entrepreneurs. A good business plan not only helps
entrepreneurs to focus on the specific steps necessary for
them to make business ideas succeed, but it also helps
them to achieve both their short-term and long-term
objectives.
15. Set specific objectives for managers. Good
management requires setting specific objectives and then
tracking and following up. I'm surprised how many
existing businesses manage without a plan. How do they
establish what's supposed to happen? In truth, you're
really just taking a short cut and planning in your head--
and good for you if you can do it--but as your business
grows you want to organize and plan better, and
communicate the priorities better. Be strategic. Develop
a plan; don't just wing it.

5. 14. Share your strategy, priorities and specific
action points with your spouse, partner or
significant other. Your business life goes by so quickly:
a rush of answering phone calls, putting out fires, etc.
Don't the other people in your business life need to know
what's supposed to be happening? Don't you want them
to know?
13. Deal with displacement. Displacement is probably
by far the most important practical business concept
you've never heard of. It goes like this: "Whatever you
do is something else you don't do." Displacement lives at
the heart of all small-business strategy. At least most
people have never heard of it.
12. Decide whether or not to rent new space. Rent is
a new obligation, usually a fixed cost. Do your growth
prospects and plans justify taking on this increased fixed
cost? Shouldn't that be in your business plan?
11. Hire new people. This is another new obligation (a
fixed cost) that increases your risk. How will new people
help your business grow and prosper? What exactly are

6. they supposed to be doing? The rationale for hiring
should be in your business plan.
10. Decide whether you need new assets, how
many, and whether to buy or lease them. Use your
business plan to help decide what's going to happen in
the long term, which should be an important input to the
classic make vs. buy. How long will this important
purchase last in your plan?
9. Share and explain business objectives with your
management team, employees and new hires. Make
selected portions of your business plan part of your new
employee training.
8. Develop new business alliances. Use your plan to
set targets for new alliances, and selected portions of
your plan to communicate with those alliances.
7. Deal with professionals. Share selected highlights
or your plans with your attorneys and accountants, and,
if this is relevant to you, consultants.
6. Sell your business. Usually the business plan is a
very important part of selling the business. Help buyers

7. understand what you have, what it's worth and why they
want it.
5. Valuation of the business for formal transactions
related to divorce, inheritance, estate planning and
tax issues. Valuation is the term for establishing how
much your business is worth. Usually that takes a
business plan, as well as a professional with experience.
The plan tells the valuation expert what your business is
doing, when, why and how much that will cost and how
much it will produce.
4. Create a new business. Use a plan to establish the
right steps to starting a new business, including what you
need to do, what resources will be required, and what
you expect to happen.
3. Seek investment for a business, whether it's a
startup or not. Investors need to see a business plan
before they decide whether or not to invest. They'll
expect the plan to cover all the main points.
2. Back up a business loan application. Like
investors, lenders want to see the plan and will expect
the plan to cover the main points.

8. 1. Grow your existing business. Establish strategy and
allocate resources according to strategic priority. You can
find more information about growing your business with a
business plan by reading "
● FACTORS TO CONSIDER WHEN SELECTING A
BUSINESS VENTURE
1. Availability of raw materials
If you intend running a manufacturing or production
business, then the nearness or availability of raw
materials is a factor you must not joke with when
choosing your business location. If your business is not
sited close to these raw materials, then sourcing and
transportation will reduce your profit margin.
2. Nearness to market
The next important factor to consider is the nearness of
your business to its customers. Are your customers
resellers or end users? Answering this question will help
you determine the best area to locate your business.

9. Remember that for your business to succeed, you must
make it easy for customers to find your product.
3. Availability of basic infrastructure
Availability of basic infrastructure can affect your choice
of small business location. Amenities and infrastructure
such as water supply, power supply, good road network
and security are things to consider when locating your
business.
4. Economic policy
The economic policy or system of a particular region may
also affect your decision and choice of location. Some
economy favor capitalists and others are driven by
socialism; where the government controls all businesses.
Other sub-factors to consider are government’s policy,
fiscal and monetary policy, exchange rates, taxes, levies
and duties.
5. Demographics
Demographics as a factor can have a big influence on
your choice of business location. The type of product or
service your business offers and the status of the

10. customers will play a vital in your choice of small
business location. I will share an example:
Suppose you are into the business of selling stationeries.
That means your demographics should be made up of
students, so your best bet of location should be within
school vicinity.
6. Psychographics
The mindset of your customers or the aura of a particular
region is also a factor to consider when choosing a
location for your small business. For example; if you site
your business in a region where tribalism thrives, then
you are doomed if you are not a member of the tribe.
Another example is this; if you are in the pornographic
industry, you will be making a grievous mistake to site
your business within a region where the inhabitants are
highly religious.
7. Industrial Clusters / areas
Some entrepreneurs may decide to site their business in
industrial areas or clusters due to the infrastructure and
amenities already on ground. Industrial areas are areas

11. mapped out specifically for commercial purposes
especially manufacturing firms.
These areas are sometimes given special attention such
as good road network, constant power supply, etc. In
some certain regions, heavy duty manufacturers are
forced by the government to site their companies in
these industrial areas.
8. Export processing zones
Locating your business in an export processing zone may
be a smart choice for you especially if are an exporter.
Locating your business in such regions means a reduction
in transportation cost, faster inspection and clearance of
your products by custom officials and so on
9. Free trade zones
International free trade zones and trade fair centers are
also good places to site your business because it is
accessible and normally receives wide publicity.
10. Distributive channel
If your business doesn’t deal directly with end users or
final consumers, then it’s wise to put your distributive

12. channel into consideration when choosing a location for
your small business. The more you make it easier for
your distributors to access your products, the better for
your business.
As a final note, i want to stress that product accessibility
is directly hinged on the location of your business. So,
when choosing a location for your small business, the
following factors listed above can give a hand in decision
making.
● WHAT A SMALL BUSINESS IS. (ADVANTAGES AND
DISADVANTAGES)
A small business is a privately-owned company in the
legal form of a corporation, partnership, or sole
proprietorship. Small businesses typically make a
maximum of $750,000 – $38.5 million in annual revenue
and has less than 100 – 1,500 employees, depending on
industry. A majority of businesses are small businesses.
How Business Sizes Are Measured
Generally, business sizes are determined based on the
company’s industry, its average annual revenue, and the

13. number of its employees. In the US, businesses are
typically classified in one of two broad categories: a small
business or a large enterprise. Micro-businesses and sole
proprietorships fall under the small business category,
while mid-sized businesses are considered a larger
enterprise.
Advantages of Small Business Ownership
Being a business owner can be extremely rewarding.
Having the courage to take a risk and start a venture is
part of the American dream. Success brings with it many
advantages:
• Independence. As a business owner, you’re your own
boss. You can’t get fired. More importantly, you have
the freedom to make the decisions that are crucial to
your own business success.
• Lifestyle. Owning a small business gives you certain
lifestyle advantages. Because you’re in charge, you
decide when and where you want to work. If you
want to spend more time on nonwork activities or
with your family, you don’t have to ask for the time
off. If it’s important that you be with your family all
day, you might decide to run your business from

14. your home. Given today’s technology, it’s relatively
easy to do. Moreover, it eliminates commuting time.
• Financial rewards. In spite of high financial risk,
running your own business gives you a chance to
make more money than if you were employed by
someone else. You benefit from your own hard work.
• Learning opportunities. As a business owner, you’ll
be involved in all aspects of your business. This
situation creates numerous opportunities to gain a
thorough understanding of the various business
functions.
• Creative freedom and personal satisfaction. As a
business owner, you’ll be able to work in a field that
you really enjoy. You’ll be able to put your skills and
knowledge to use, and you’ll gain personal
satisfaction from implementing your ideas, working
directly with customers, and watching your business
succeed.

15. Disadvantages of Small Business Ownership
As the little boy said when he got off his first roller-
coaster ride, “I like the ups but not the downs!” Here are
some of the risks you run if you want to start a small
business:
• Financial risk. The financial resources needed to
start and grow a business can be extensive. You may
need to commit most of your savings or even go into
debt to get started. If things don’t go well, you may
face substantial financial loss. In addition, there’s no
guaranteed income. There might be times, especially
in the first few years, when the business isn’t
generating enough cash for you to live on.
• Stress. As a business owner, you are the business.
There’s a bewildering array of things to worry
about—competition, employees, bills, equipment
breakdowns, customer problems. As the owner,
you’re also responsible for the well-being of your
employees.
• Time commitment. People often start businesses
so that they’ll have more time to spend with their
families. Unfortunately, running a business is

16. extremely time-consuming. In theory, you have the
freedom to take time off, but in reality, you may not
be able to get away. In fact, you’ll probably have
less free time than you’d have working for someone
else. For many entrepreneurs and small business
owners, a forty-hour workweek is a myth. Vacations
will be difficult to take and will often be interrupted.
In recent years, the difficulty of getting away from
the job has been compounded by cell phones,
iPhones, Internet-connected laptops and iPads, and
many small business owners have come to regret
that they’re always reachable.
• Undesirable duties. When you start up, you’ll
undoubtedly be responsible for either doing or
overseeing just about everything that needs to be
done. You can get bogged down in detail work that
you don’t enjoy. As a business owner, you’ll probably
have to perform some unpleasant tasks, like firing
people.

17. ● ENTREPRENEURSHIP (TYPES)
The process of launching, developing and running a
business venture along with its financial risks is called
entrepreneurship.
In simple terms, it is the willingness to launch a new
business venture. It is very important for the economic
development of the expanding global marketplace. A
person who undertakes entrepreneurship is called an
entrepreneur.
Generally, starting your own business is a tough
proposition as 90% of startups fail each year. However, it
comes as no surprise that more and more people choose
to be independent in their professional careers. According
to statistics compiled by dealsunny.com, 2 out of 3
people worldwide think entrepreneurship is a good
choice.
Majority of the people think that entrepreneurship has
just one meaning. But there are different types of
entrepreneurship as described below:

18. ● TYPES OF ENTREPRENEURSHIP
1. Small business entrepreneurship
In today’s world, the majority of businesses are still small
businesses. In the U.S, 99.7% of all companies are small
businesses and they employ 50% of all non-
governmental workers.
They are mostly barely profitable, but they make profits
only to make a living and support their families. Such
businesses lack the scale to attract venture capital and
they are funded via friends/family or small business
loans.
Examples of small business entrepreneurship include
hairdressers, grocery stores, electricians, carpenters,
plumbers, consultants, etc.
2. Scalable Startup Entrepreneurship
In this type of entrepreneurship, entrepreneurs start
their company believing that their vision can change the
world. Their funding comes from venture capitalists and
they hire the best employees. Finding a scalable and
repeatable business model is their goal. Once they find it,

19. further funding from venture capitalists is required for
growing their business.
Scalable startups only make up a small proportion of all
businesses due to the risk capital and outsize returns.
Examples of scalable startup entrepreneurship include
Facebook, Instagram, Online shopping for electronics,
etc.
3. Large Company Entrepreneurship
Large companies through sustaining innovation, offering
new products that are variants around their core
products. New products are developed in order to meet
with changing customer needs and advanced technology.
Often, companies do this by partnering with or buying
innovative companies.
Examples of large company entrepreneurship include
Google, Microsoft, Samsung, etc.
4. Social Entrepreneurship
Social entrepreneurship is where an entrepreneur creates
products and services to solve social needs and
problems. Their only goal is to make the world a better

20. place and not to make profits or acquire wealth. They can
be non-profit, profit or hybrid.
● IMPORTANCE OF ENTREPRENEURSHIP
Haven’t we all wondered at least once in our lives why
entrepreneurship is so appealing to the majority? Why is
it so important?
1.Entrepreneurs create jobs: Entrepreneurs, in
addition to employing themselves, also create a
number of job opportunities with their business
venture. And as their businesses grow, more job
opportunities are created, thereby reducing
unemployment.
2.Entrepreneurs create change: When an
entrepreneur makes a product in the hopes of
solving a problem or when they explore a new idea,
it brings a change into the world. Their ambitions
and ideas thus improve the world.
3.Entrepreneurs give to the society: It is a
common notion that the rich are greedy, but it is
mostly wrong. The more money they make, the

21. more in taxes they pay which in turn funds social
services. Some entrepreneurs as we know, like Bill
Gates, the founder of Microsoft, are the biggest
donors to charities and non-profits.
● BUSINESS ACQUISITION PROCESS (7
STEPS)
1. Be clear with yourself on goals and motivations
for the sale.
The first step when considering whether to sell your
company is to reflect on what you hope to gain from the
sale and how you want it to be executed. Do your
homework to ensure that you fully understand the impact
of this acquisition beyond the dollar amount. Look at how
it will affect your career, your company’s brand and
future. If you don’t already have a prospective buyer,
spend time considering what the ideal acquirer’s profile
would be and what corporate culture and values would be
most desirable.

22. By setting goals and standards from the start, you will
have a clear vision that will lead to the best outcome
when the deal is done.
2. Get your house in order.
The acquisition process is often long and complex and
even more so if the company acquiring your business is
publicly traded. By doing your own due diligence ahead of
the sale process, sorting through company history and
financials, you are more likely to ensure the sale goes
through smoothly. For example, make sure all taxes are
filed, finances are in order and there are no outstanding
issues that could arise and slow progress.
3. Time to involve the experts.
Having the right experts -- investment bankers,
attorneys and tax advisors -- is a crucial part of
preparing for an acquisition and having a successful
outcome. These experts will be instrumental in helping
you position the company in the most optimal way for
your exit, and they have the experience you will need for
something that is likely a first-time event for you.

23. 4. Be open with your management team.
Your management team is one of the key factors in your
company’s success and an acquirer will certainly want to
retain the best and the brightest in your talent pool. By
creating an open environment and keeping the
management team informed and involved, you will better
prepare your team for the transition once the acquisition
is finalized.
5. Secure alignment among key stakeholders to
avoid last minute snafus.
It is important to keep your board and other key
stakeholders rallied around the sale. By doing so, you
create a level of transparency that will avoid last minute
surprises or disagreements that can delay an acquisition
or cause it to be derailed completely.
6. Secure major partnerships and clients.
Ultimately, when a company decides to acquire a
business, they want to know that major customers won’t
jump ship after the sale. To that end, it is important that
(to a select degree) clients and key partners are kept
informed about what is happening. Additionally, loyal and
happy clients serve as valuable references to a potential

24. acquirer, making their support a critical part of your
strategy to maintain stability throughout the process and
its aftermath.
7. Know your company narrative.
Task your team of experts, as well as your marketing and
public relations teams, to work with you to ensure that
you have a compelling, credible story to tell post
acquisition. You and your company will be in the
spotlight, and it is critical to be prepared for it. Your
corporate narrative will be important in inspiring
confidence among employees, customers and
stakeholders and in convincing them to accompany you
as you embark on your new journey.