Methods to Initiate

Ventures
Kent Lexter Co 5-CpE
 Creating New Ventures

The most effective way to approach

a new business venture is to create a
unique product or service that is not
offered today but would be in great
demand if it were.
 New New Approach

•Make a list of annoying or hazardous

with various products during a given
period of time
•Most business ideas come from
people’s experiences
 New Old

•Piggybacks on someone else’s

idea by improving a service or
offering a service in an area
which it is not currently
available.
 Examination of Financial Picture

• How much revenue within a given time

period?
• How much will it cost to stay in
business
• If outflow > inflow, how long until the
company turns the corner
Personal Factors

•Background
•Skills
•Interests
•Experience
•Location
Examination of Opportunities

•Business brokers
•Newspaper ads
•Trade sources
•Professional sources
Advantage Of Acquiring Ongoing Ventures

• Because the enterprise is already in

operation, successful future operation is
likely
• Time and effort associated with starting a
new enterprise are eliminated
• Sometimes it is possible to buy a business at
bargain price
Evaluation Of Selected Venture

• Business environment
• Profit , sales and operating ratios
• Business assets
• -inventory
• -furniture
• -accounts
• -trademarks, patents, copyrights business name
Questions To Ask?

• Why is the business being sold?

• Current physical condition of business?
• Condition of inventory
• State of company’s other assets
• Remaining employees
• Competition
• Financial picture
Franchise

• Make a financial investment in the operation

• Obtain and maintain a standardized
inventory
• Maintain specified quality of performance
• Follow franchise fee and percentage of
gross revenue
• Engage in continuing business relationship
Do’s and Don’ts of Buying A Business

• Have a seller retain in a minority interest in

the business
• Never rely on oral statements
• Have an accountant examine
• Investigate
• Interview employees
• Find out the real reason
Benefits and Assistance

• Company name
• Identifying symbols, logos, designs and facilities
• Personal management training
• Sale of specific merchandise for operation at
wholesale
• Financial assistance
• Continuing guidance
Advantages of Franchising

•Training and guidance

•Brand name appeal
•Proven track record
•Financial assistance
Disadvantages

•Franchise fee
•Franchisor control
•Unfulfilled promises
Evaluating Opportunities

•Learn of opportunities
•Investigate the franchisor
•Seek professional help
•Decision? Its up to you!