International Expansion of the firm

International expansion is another common form of growth for entrepreneur- ial firms.9 According to a 2011 survey conducted by the Small Business & Entrepreneurship Council (SBE) and the Financial Services Roundtable, 21 percent of small businesses said that expanding into overseas markets factored into their business plans over the next five years.10 A look

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External Growth Strategies of the firm

External growth strategies rely on establishing relationships with third parties. Mergers, acquisitions, strategic alliances, joint ventures, licensing, and franchis- ing are examples of external growth strategies. Each of these strategic options is discussed in the following sections, with the exception of franchising, which we consider separately in Chapter 15. An emphasis on external growth

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UPTOWN CHEAPSKATE: Franchising as a Form of Business Ownership and Growth

When Chelsea Sloan was young she lived with her family for a period of time in Ohio where her father was a shopping center redevelopment manager. Her mother shopped resale stores to help clothe her four children, all of whom were under age ten (two additional children came later). One store that caught the

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What is Franchising and how does it Work?

Franchising is a form of business organization in which a firm that already has a successful product or service (franchisor) licenses its trademark and method of doing business to other businesses (franchisees) in exchange for an initial franchise fee and an ongoing royalty.5 Some franchisors are established firms; others are first-time enterprises that entrepreneurs

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Establishing a Franchise System

Establishing a franchise system should be approached carefully and deliber- ately. While the process is a familiar one to a company such as McDonald’s, which at the end of 2013 had 35,429 restaurants in 119 countries,10 franchis- ing is an unfamiliar process to a new franchise organization. Franchising is a complicated business endeavor, which

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Advantages and disadvantages of Franchise

There are two primary advantages to franchising. First, early in the life of an organization, capital is typically scarce, and rapid growth is needed to achieve brand recognition and economies of scale. Franchising helps a venture grow quickly because franchisees provide the majority of the capital.13 For example, if Comfort Keepers were growing via

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Buying a Franchise

Now let’s look at franchising from the franchisee’s perspective. Purchasing a franchise is an important business decision involving a substantial financial commitment. Potential franchise owners should strive to be as well informed as possible before purchasing a franchise and should be well aware that it is often legally and financially difficult to exit a

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Steps in Purchasing a Franchise

Purchasing  a  franchise  system  is  a  seven-step  process,  as  illustrated  in Figure 15.3. The first rule of buying a franchise is to avoid making a hasty de- cision. Again, owning a franchise is typically costly and labor-intensive, and the purchase of a franchise should be a careful, deliberate decision. Once the decision to purchase

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Legal aspects of the Franchise relationship

According to the Federal Trade Commission (FTC), a franchise exists any time that the operations of a business involve (1) the selling of goods or services that bear a trademark, (2) the retention of significant control or assistance by the holder of the trademark on the operation of the business, and (3) royalty pay-

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Franchise Ethics and International Franchising

There are a number of additional issues pertaining to the franchisor–franchisee relationship. Three important topics, for both franchisors and franchisees, are franchise ethics, international franchising, and the future of franchising as a method of business ownership and growth. 1. Franchise ethics The majority of franchisors and franchisees are highly ethical individuals who are interested

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Why do you start a business?

1. Your Current Position Most of you reading this book will have some employment situation you are trying to remedy. There are many, and we will go through what each means and how it may impact your life as an entrepreneur. The key thing is to analyze and acknowl­edge what your own personal situation

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Benefits and Disadvantages of Startup

1. Benefits of Working for Yourself The benefits of working for yourself are phenomenal and potentially endless. There are vastly more benefits, in my view, than drawbacks. Like many of you may decide to do, I quit my day job with a new home and heavy mortgage, less income from my new Accidental Business

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Common Myths of Startup

Small business owners are often put off by lots of myths—the unimaginable consequences of owning your own business. I hear every excuse or reason from “I don’t want to pay so much in taxes” to “I can’t afford to start a business” to “if I go into business for myself and things don’t work

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You Have a Startup Idea, Now What?

You Have an Idea, Now What? Chances are, you are picking up this book because either you had an idea and weren’t sure how to implement it, or you are intrigued by the idea of becoming your own boss and want to learn how to realize “the American dream.” In either case, you will

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Deciding on an Initial Startup Strategy

To begin any project, you need to decide on an initial strategy for developing your business. This involves many things, from deciding when to quit your day job (or stop looking for a job if you are unemployed), to when to commit full time to your business, to how to get your first customers.

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Deciding If Your Startup Plan Will Work

After you’ve decided that you want to make the jump, you need to figure out if your plan—the one you have by now fully documented, including short-term goals—will work. To do that you need to talk to people—lots of people—and you need to get the advice of experts—lots of experts! You also need to

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Startup Costs

Every business has startup costs; how much and what type will depend greatly on what you’re going to do for a living. If you are going to be office-based or you’re going to have a storefront, your costs will differ than someone who is going to run an Internet operation. Here are some basics

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Types of Startup Businesses

There are four primary types of business models and many sub­types. Your accountant can help you determine which one is best for you; even if you use this book and do your own research, you should run the ramifications of your choice by a tax accountant or legal advisor (I recommend both), because individual

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No Such Thing as a Bad Idea in your Startup

Now that you know what your options are and will be consulting with experts about your own situation, we will move onto ideas and inspiration, the next step on your path toward entrepreneurship. We’ve all heard our teachers tell us that there is no such thing as a stupid ques­tion or a bad idea!

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Doing Starttup Business with Family and Friends? Home Based or Office Based?

1. Doing Business with Family and Friends Many times the best ideas come to mind over a family dinner—and they belong to the family member or two or three who decide to run with it. Sometimes you need inexpensive labor, so you bring on the 17-year-old cousin you rarely saw to help with the

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