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Living the Self-Employment Dream
Many people think about owning and running a business all their own, with no one to answer to but themselves.  The two most common ways of achieving this dream involve starting your own business or buying a franchise.  Each has pros and cons, and you must examine your personal preferences, business style, professional experience, and financial circumstances in order to determine which is the proper path to take.

What is a New Business?
As crazy as it sounds, the definition of a new business is…a business that did not exist before you started it.  Many new businesses are spin-offs of existing ones.  For example, you worked as a shoe repair apprentice for a few years and decided to open your own shop.  You were a Realtor with a large firm but elected to strike out on your own.  You cooked in a downtown restaurant and learned enough from the owner to open your own restaurant out in the suburbs.  Another way to start a new business involves coming up with an idea that no one else has, or recognizing a market that is under-served.

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Business Start-Ups Are Risky
According to statistics compiled by the SBA (Small Business Administration), a U.S. government agency responsible for, among other things, guaranteeing loans to owners of small businesses, somewhere around 33 percent of new ventures fail within their first two years. When deciding whether or not to start a business, an entrepreneur must first assess a variety of factors. These may include:

• Management elements - What sort of knowledge is necessary to run this particular business; how does it fit with my skill levels or those I will select to look after day-to-day operations
• Market elements - What sort of need exists for this particular product or service, and what is the likelihood it will retain market share and preferably grow in demand
• Financial elements - How much does it cost to open and run this business; how likely is it to attract investors or some other form of third-party financing
• Brand elements - Is there any existing value to the company name or product among its perceived clientele; how will one create “market buzz” to drive sales?

Every topic above contains a certain element of risk. The wily entrepreneur will do his or her best to mitigate these risks, which means reducing the chance that they will have a negative effect on the company’s bottom line. One of the ways to do this - on a top-line basis - is to consider opening a franchise business instead of a non-franchise operation.

How a Business Becomes a Franchise
“But every company had to start somewhere,” you’re likely to exclaim.

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Selling Your Business?
Once you decide to sell your small business, the next step involves finding someone to buy it.  When advertising a business for sale, the first inclination may be to broadcast the opportunity far and wide.  Some owners even go so far as to put a sign in their window that reads, “This business for sale.”  While you will probably generate quite a bit of interest, it may not be the sort of “buzz” you’d like.

Business Confidentiality
One of the greatest challenges facing a small-business owner is how to advertise a business for sale while maintaining business confidentiality.  On the surface this may not seem like much of a big deal, but consider some of the unintended consequences.  What about your existing relationships with vendors and suppliers?  Many have learned from past experience that business owners who plan to move on may not be as quick to pay their bills, and they have probably been involved in situations where the owner stiffed them entirely.  Then there are your employees.  One of the greatest selling points you can make to a prospective buyer is the fact that he or she is buying a business with a fully trained staff.  Workers get nervous when they discover that the place where they’re employed is on the block, as the new owner(s) may not want to retain them.  A final concern involves your competition.  Competitors can use the knowledge of your impending sale as a wedge against existing clients.  Imagine the following conversation:

“Pssst, Mr.

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Taking the Money Step
There are many factors to consider when buying a franchise.  You have to decide what industry to enter, what form of operation your franchise will take, and which brand to represent.  No single decision is more important, however, than figuring out where the money comes from.  Very few people have enough cash on hand to buy a franchise outright.  Even for those who do, they may be better off financing at least part of the purchase and saving the cash for a rainy day, or those slow business days you will encounter while working hard to bring your new venture to profitability.  The money step is a big one, but you have plenty of franchise financing options at your fingertips.

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Plenty of Economic Challenges
The Dow Jones Industrial Average continues to show erratic behavior and the unemployment picture remains bleak despite recent government intervention.  In spite of disappointing economic news that never seems to end, there are still some terrific opportunities out there for entrepreneurs who want to buy an existing small business.  Uncertain times for some can be advantageous times for others—it’s all in how you approach the situation.  Here are five secrets to finding that great business.  Of course, the publication of this article sort of blows the cover off that, right?  Well, try to keep it under your hat, if you can.

1. Hunt down a recession-proof business
Even in poor economic times, plenty of businesses stay ahead of the game—and some even do better.  By choosing a business in a field whose products or services are in demand no matter what the housing or job markets are doing, you will be making a smart decision.  Here are just a few areas worth considering:

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Look Before You Leap - Or Buy a Franchise
Once you have convinced yourself that a buying a franchise is in your future, you will want to do a great deal of investigating before signing on the dotted line and writing a big, fat check.  There are a number of things to look for when purchasing a franchise - what industry to select, what type of business within that industry to run (whether managing a retail store, running a mobile operation, or working from home) and, finally, which of the dozens of brands to represent.  Not every opportunity is the right one, and what works for you may not be the best choice for another franchise buyer.

Before Buying a Franchise for Sale
It is vital that you first consider your financial circumstances before making additional inquiries regarding the purchase of a franchise.  What is the state of your credit?  How much cash do you have to put down?  What sort of collateral can you draw upon in order to borrow the rest of what you might need?  Having a clear picture of your financial resources will help steer you in the right direction.  After all, it makes no sense to consider buying a million-dollar franchise if your circumstances only support a purchase half that large.

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What is a Small Business?
Although the term is somewhat malleable depending upon where you live, a “small business” is generally considered to be one that is privately owned and operated—that is, not a public company listed on any sort of stock exchange—with fewer than 100 employees (or fewer than 50 in the European Union).  The U.S. government further defines an enterprise as a small business based upon annual sales, but this will vary by category and only comes into play in order to qualify for small-business set-asides when bidding on government jobs.

Buying a Small Business for Sale
Businesses for sale are all around us.  This could include the dry cleaner’s shop where the owner wants to retire, the corner restaurant whose owners are interested in buying a bigger place downtown, or the mobile dog-cleaning service with a proprietor who’s tired of driving all over the city.  There are a number of factors to consider when buying a small business, and plenty of questions to ask once you have settled on a couple of possibilities.  Learn as much as you can before taking the big leap.

Examine the Financials
Check over the company’s profit-and-loss sheets and cash flow statements.  You should know everything there is to know about how much money has come into the business, where it went, and what are the projections for future earnings.  Enlist the services of an accountant or CPA to assist with these efforts.  Pay special attention to the company’s liabilities, as new owners usually acquire these along with the company’s assets.  The due diligence package should also include the company’s income tax returns, legal filings, articles of incorporation, and information on lawsuits both past and pending.

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Pizza Franchise Review
The pizza business includes both mom-and-pop establishments as well as some of the largest corporate players in the world of franchising.  Because ingredients are relatively inexpensive and equipment is minimal - the most you need is a pizza oven, a clean workspace, and some well-trained pizza flippers - owning a pizza franchise is incredibly popular.  There are tons of choices out there, so deciding which business to buy can be challenging.  One should balance name recognition with the cost of operation, and take a close look at the competition.  Here are the top pizza franchises for 2009 as determined by one of the industry’s most trusted trade journals.

1. Pizza Hut
Pizza Hut is to the flat pie as McDonald’s is to the round burger - the 800-pound gorilla in the room.  Founded in 1958, there are more than 14,000 locations of this family-style pizza franchise restaurant.  The initial franchise fee is $25,000, and one’s total investment will range from $268,000 to $1.4 million.  The company charges a 6.5 percent royalty on gross sales.

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