Many people have a yearn to start their own business, and it is true that it is the only way an individual can get rich unless he or she is gifted at music or sport, or maybe works for a bank and gets a large bonus. So let us examine the various options when staring a business.
Most businesses fall into three types. There is what can best be described as the traditional business where the proprietor, or owner, has an idea, service or product he or she wishes to sell and sets up a business. Then, secondly, there is the franchise option; and lastly, we have network marketing. Let us examine each breed of business.
Each business type has its pros and cons:
The ‘traditional’ business will need considerable self-funding as banks are reluctant to lend because this type of business carries more risk of failure in the early days. However, if you have expertise in a particular industry and maybe wish to set up as a consultant, you could qualify for funding if you can prove you have good contacts in that industry.
If you tell your bank manager that you intend to trade as a franchisee you should expect to see a smile on his face. Banks favour franchises as others have already proved this business can succeed, and banks have a track record to measure the risk. So funding should be forthcoming. However, you will need to find the franchise fee which could be considerable, and you should expect to give the franchisor a percentage of your turnover – not profit, turnover.
- Network marketing, also known as multi-level marketing, has many advantages and few disadvantages. The entrance fee is low and the ongoing expenses are even lower. A network marketing business can be started in your spare time – in fact that is the best way to approach it. Start small, and keep at it. The secret is perseverance, get past the first year and you should find the business has a sound foundation from which you can build a serious income. It is said that 95% of those who survive ten years in network marketing become wealthy beyond their wildest expectations.
The question of which type of business is best suited to you is quite easy to answer. If you have experience in a particular field and see that you can provide companies with a service cheaper than they can provide in-house, then a traditional type of business will be the obvious choice. If not, that leaves franchises and network marketing. The choice here will depend on the financial resources available to you. A franchise will cost more to start: you will need the franchise fee, premises, staff, and stock. You should be able to get a loan for some of the cost but you will have to provide a sizable proportion from your own means.
Although a network marking business may cost a lot less to start up, that does not mean your earnings potential is less than with the other business types. Your overheads will be a lot less, and your potential income is high. Take a lot at the commission rates in my chosen business. There is more information about network marketing on the website as well as information about that particular business opportunity.
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