Evaluate New Business or New Franchise to Consider Overview. Write a 5 paper evaluating the advantages and disadvantages of: Starting a new business.
Evaluate New Business or New Franchise to Consider Overview
Write a 5 paper evaluating the advantages and disadvantages of:
Starting a new business.
Buying a new franchise.
Then identify an actual new business or a franchise opportunity (in a new location) you would consider starting and operating, explain the reasons why, and specify which legal structure you will use to structure your new venture.
Use the Evaluate New Business or New Franchise to Consider Template [DOCX] located in the resources for this assignment.
Using the template, address ALL of the following issues:
Provide at least three (3) benefits and three (3) risks associated with each option.
Evaluate which model suits your personal preference and explain why. (Note: While you may be interested to buying an existing business, for the purposes of this course and the subsequent assignment related to this new venture, you must focus exclusively on a new business or new franchise in a new location.)
Identify an actual new business or new franchise opportunity you would consider starting and what kind of product(s) and/or service(s) you would like to sell. Explain the reasons why you focused on this specific market area and venture type. Please only consider a new for-profit business (or franchise) for purposes of this course. There are upcoming assignments that require feasibility, competitive, financial, and profitability analyses related specifically to a new for-profit business or franchise.
Specify which legal structure you will use to structure the new venture and explain the reasons why.
Note: Assume this is an actual new venture you will plan for, set up, launch, and operate. To make this assignment meaningful, interesting, and relevant to you, select something you are really interested in and/or are passionate about. Treat it as a real endeavor, something you are responsible for making happen.
The specific new venture you identify and select (new business or new franchise) will be used as the basis for the remaining course assignments you will complete going forward.
Length of paper: Use the template linked in the Resources. The body of your paper must be 5–6 full single-spaced pages, not including the Title (Cover), References list or Appendices.
Section Headings: Use the template provided.
Written communication: Your paper should demonstrate graduate-level writing skills and should be free of errors that detract from the overall message.
References: Support your paper with at least 3 academic resources from the Capella library. You must follow current APA style to list your references. Refer to the Capella Writing Center’s APA Style and Format module for more information.
Formatting: The Evaluate New Business or Franchise to Consider is a professional business document and should therefore follow the corresponding MBA Academic and Professional Document Guidelines, which can be found in the MBA Program Resources in the courseroom navigation panel.
Has a defined market been determined? Is that market in growth mode or is it in decline? Understanding with complete certainty who you will serve helps to determine the viability and ultimately the profitability of the franchise.
Researching the officers and management of the franchise along with those who will be supporting your business should provide you with some insight on the franchise’s culture. Look for stability and experience, as franchising is competitive and you want the best team as your partner.
All franchises will file a Franchise Disclosure Document (FDD) with their complete business details so you can begin your research. Be aware that the FDD is not forwarded until you have moved along in the discovery process and the franchisor has determined you are a qualified and serious candidate. Articles 1-4 of the FDD will give you the company’s history, a list of the management team, litigations, and bankruptcy information.
Article 21 of the FDD contains the franchise’s financial statements. Review them, question them, and consider having a CPA look them over.
You have to begin with a personal inventory of how much you can comfortable invest. All franchise companies will look at your liquid capital (sometimes known as the capital required) your assets-to-liabilities, and your net worth. You don’t want to come in undercapitalized. Be honest with yourself about what you can invest.
Look for a support and training system that is comprehensive and does not have any outdated procedures. Speak with current franchise owners in the system and learn from their experience. These owners are a valuable resource and can tell you whether the franchisor actually provides all that they promise.