Class 6

Methods to Initiate Ventures

The pathways to New Venture for Entrepreneur

Create a New Venture

Buy an existing business

Obtain a Franchise
 Creating New Venture
How does a discover or invent new products?

New-New Approach
How does a discover or invent new products?

New-old Approach
Introducing already existing in an area where it was not
available before
 Examination of Financial Picture

Make a list of activities that show,

Cash inflow

Cash out flow

Start-ups Costs
Acquiring an Established Entrepreneurial Venture
Obtaining already running business

• Personal Preferences

• Examination of Opportunities

• Advantages of Acquiring an Ongoing Venture

• Evaluation of the Selected Venture

• Key Questions to Ask

• Negotiate the Deal

 Acquiring an Established Entrepreneurial Venture
Obtaining already running business
• Why is the business is being sold?
• What is the current physical condition of the business?
• What is the condition of the inventory?
• What is the state of the company’s other assets?
• How many of the employees will remain?
• What type of competition does the business face?
• What does the firm’s financial picture look like?

Negotiate the Deal

 Do’s and Don’ts of Buying a Business

• Have a seller retain a minority interest in the business

• Never rely on oral statement
• Have an accountant examine the books and check the cash flow
• Investigate, investigate, investigate.
• Interview employees
• Find-out the real reason the company is for sale.
 Franchising: The Hybrid
How a franchise works
Advantages of a franchise • Training and Guidance
• Brand-Name Appeal
• A Proven Track Record
• Financial Assistance

Disadvantages of a franchise
• Franchise Fees
• Franchisor Control
• Unfulfilled Promises
Case Studies
Activity