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Step 2—Your Options

Okay, so you’ve made it this far. You might have what it takes to be your own boss. But for what kind of business? You have three main options—build a business from scratch, buy an established business, or buy a franchise.

Here’s how they stack up:

Method	Advantages	Disadvantages
Build a business from scratch	You make all your own decisions You can be as creative as you would like	You have to do everything yourself New businesses are very risky - many don’t succeed
Buy an established business	It’s already set up There’s an established client base It has established name recognition May be less risky than a brand-new business	It may have problems you are unaware of Your business’ reputation is based on the reputation of the previous owner
Buy a franchise	You receive the support of the franchise network Generally lower risk than the other options It has an established reputation and marketing plan You may receive training and financial support	Usually offers less freedom than an independent business May be expensive Your reputation depends on the reputation of the other franchise owners

Think it Through

There are a few more things to consider before taking that business leap of faith. While these questions are just the tip of the iceberg, they’re a great place to start:

What will you sell?
Will you sell to other businesses or consumers?
How much do you know about the business?
- Will you need extra training?
- Will you need a partner who knows more about it?
How much experience do you have in this field?
How unique is your business idea?
- What’s the competition?
Who will buy or use your product? How often?
What are the laws surrounding your type of business? (Make sure you check local, state and federal statutes.)
What are the costs to produce, advertise, sell and deliver this product or service?
Can you make a profit from this business? How long will that take?

Too Good to Be True

Everyone knows the saying that “If it’s too good to be true, it usually is.” This is especially true in the business world. Do your homework so you don’t fall for a get-rich-quick scheme or before you get talked into going into business with friends or family. Make the Federal Trade Commission your first stop in researching a business.

Whatever business you choose, you need to have a detailed plan to help it succeed.

Step 2—Your Options

Method

Advantages

Disadvantages

Think it Through

Too Good to Be True