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Wednesday, July 26, 2006

Risk and rewards of going into the franchise business

Going into the franchise can be both very rewarding and very risky, risky as in you could loose your life savings, your kids collage fund, your car... the house. Pretty grim scenario but the benefits of a successful franchise business also outweights the risk for some people. Here are the 2 factors:

The RISKS

Possibility of failure.

There is always the possibility of failure – a single wrong business decision can bring a business to bankruptcy.

Unpredictablebusiness conditions.

A smal business is vulnerable to sudden changes in the business environment. In a fast-paced industry, a smal firm may not have the financial capability or the organizational capacity to respond adequately to new opportunities and their concomitant problems.

Long hours of work.

A prospective entrepreneur must be ready to spend most if not all his waking hours in thebusiness. Also, family time and personal affairs may be sacrificed.

Unwanted or unexpected responsibilities.

The entrepreneur may eventualy find himself saddled with management responsibilities he did not bargain for.

The REWARDS

Having unlimited opportunity to make money.

When you have your own business, you wil most certainly have unlimited potential to earn money. How much money you earn depends on the time and efort you put into your enterprise. Successful entrepreneurs have earned their wealth and prestige through hard work and by having the right product for the right market at theright time.

Being your own boss.

As manager of your business, you make the decisions for your enterprise and take full responsibility for these. The quality of these decisions wil translate into either gain or loss for your business. Being your own boss means you are in control of your future. You have a better grasp of what you want to be.Tapping your creativity. A business usualy starts out as an idea. You wil have the opportunity to harness this creativity and turn your ideainto products and processes.

Overcoming chalenges and findingfulfilment.

Starting a business is by itself an accomplishment. Running a business tests an entrepreneur’s capability in securing and managing resources. How well a business turns out depends on the owner’s ability to face challenges and overcome difficulties.

Helping others.

In the process of running a business, an entrepreneur employs workers, and pays them income which improves their lives. An entrepreneur who succeeds and grows also helps suppliers, sub-contractors, dealers and other businesses connected to him succeed and growtoo.

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