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The best business models to help you revitalize your business
Generally speaking, franchises are more of a good idea for those people who don't want to buy an already existing business but also don't want to start one simply from scratch.A franchise is basically when you-the franchisee-buys an upfront, initial fee and then pays continuing royalties to a franchisor.The way that it works is that the franchisee then gets to use a trademark, also gets continuing support and help from the franchisor, gets to sell the franchisor's products, and also gets to copy the franchisor's way of doing business and also the franchisor's business model.Probably one of the best known franchises out there is 7-11.Many fast food restaurants are also franchises. The franchisee also gets training in how to use a particular way of running a business.This training and support helps ensure that the franchisee can avoid most of the problems that small business owners run into when they start up their own small business, along with avoiding some pretty common mistakes.The franchisor has already developed a tried-and-true system of running a business. A good franchisor will conduct research on the market before selling a franchise.This will help you as the franchisee feel sure that there will actually be a market in your area for the franchise's particular service or particular product.This market research is actually the biggest problem that independent entrepreneurs make-most independent entrepreneurs do not actually conduct market research, and end up trying to sell a service or a product that is of no interest to those people who are in the particular area. Another benefit to purchasing a franchise is that there is strength in the sheer number of individual stores that are out there in your franchise.What comes into play is known as economics of scale-this economics of scale will help you out when it comes to buying your materials, various services, and also supplies, and economics of scale will help you when it comes to advertising and getting good leases and retail space.The strength of the franchise brand will help you get a better lease, which is a problem that independent entrepreneurs tend to have.So, buying a franchise will help you reduce risk, will also help you standardize your products and your system of management, will give you standardized financial systems, will give you collective buying power, gives you the benefit of consulting and advice, will help you out with advertising, gives you uniform packaging of products, and offers financial assistance. There are some drawbacks to franchising, however.If you are fiercely independent, then you won't like owning a franchise, since you will be told what to do and how to do it by the franchisor.Also, there are better franchise systems out there than other franchise systems.Make sure that you purchase a reputable franchiseYou will have to sign a binding contract, and if your franchisor ends up getting into trouble, then you will also be getting into trouble along with your franchisor.If the entire franchise goes under, so does your own individual business.Don't impulse buy a franchise, and work with a good CPA to help you project your cash-flow before you actually buy a franchise so that you can ensure that purchasing a franchise will really be a wise economic move for you to make.
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