The Advantages And Disadvantages Of The Traditional Business Model, Franchises, And Network Marketing
Very few people ever got rich by working for someone else. Leaving aside pop musicians, sportsmen and similarly gifted people, the only way to acquire wealth by work is to build a business of your own. The type of business you decide upon will depend on: a) how much money you have available as start-up capital and working capital; b) your business idea; and c) your confidence level.
There are three types of business: 1) the traditional one in which you are reliant solely on your own efforts; 2) a franchise where you follow a proven idea and receive considerable training and back-up from the franchise company; and 3) network marketing.
There are advantages and disadvantages with each of the three types of business:
- The traditional business requires considerable financial input, either from your own resources or part-funded by your bank. You may need to rent premises; buy equipment; hire staff; pay for advertising, brochures, stationery, and stock. A frighteningly high percentage of this type of business fails in the first year. To succeed you need: a good idea, considerable financial backing, good health, an understanding spouse, and stamina. If you do succeed you will own the business outright and benefit from all the profits.
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.
Our third type of business, network marketing, has many pros and few cons. You can start in your spare time and keep the income from your main employment. The secret is to persevere and get through the first year when earnings may be low. However, if you can keep at it your income should grow and in time most people are able to give up their ‘day job’ and run their business full time. Another advantage is that start up costs are usually much lower than in other business.
Which type of business suits you best will depend on your experience and the amount of money you have to invest in your dream. If you are just fed up working for others and want to see your rewards match your efforts, then the best options would probably be a franchise or network marketing. Which one will depend on your financial situation. A franchise will require to work a full day, so you will need some cash to pay your bills until the business is making enough money. You will also need some capital for the initial fee, premises, and maybe staff. If you do not have that sort of money then network marketing is the way to go. Start in your spare time and keep at it. So many people give up just before their business is ready to really take off. Set your self a target of say one year. By then your business should be starting to bring in some decent money and you will see the potential for further growth.
Whilst it may cost much less to start a network marketing business, that does not mean your potential income is less. On the contrary, your expenses will be much lower and there is no limit to the potential profit. To get an idea about the network marketing business opportunity I chose visit my website. You will find more information about network marketing, and you will also find details of the business opportunity.
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