Franchise Buying Guide

Start a Business the Fast Way

The Biz Opp Option
Presented by Guidant Financial
Guidant Financial specializes in helping entrepreneurs purchase new franchises using their retirement funds.

While the structure of a franchise can be liberating for some, it can be restrictive for others, and that's where your personality comes into the equation. Says Caffey, "It has often been said that if you're a hardheaded entrepreneur who simply insists on doing things your own way, you may not be happy owning a franchise business because a franchise has to be run according to the specs, the plan and the business feel of the franchisor."

For these types of entrepreneurs, a business opportunity might be preferable since it imposes fewer restrictions. However, it also provides less ongoing support. "A business opportunity tends to be a one-time transaction in which you buy a package of materials that you can then use to generate your own business," explains Caffey. A business opportunity, generally speaking, is the sale of goods or services that enable the purchaser to begin a business and where the seller makes certain statements, representations or guarantees in the course of the sale.

Get in the Game
Purchasing a business opportunity is simple. The investor pays a fee and receives a business kit that usually includes a training manual, basic steps to getting started and access to a product or service.

Growing the business, however, can be more challenging. "People spend $1,000 for a package that requires them to sell goods or services, and that is something some people don't expect," says Caffey. "They don't understand what is involved in making a sale and a cold call, or how to handle rejection." Before you buy, it's crucial that you understand the nature of a business opportunity, believe in the product or service and are comfortable selling it. Caffey advises consulting with friends and family first to determine whether the product is sellable.

If you choose the right product, success can be just around the corner. Susie Cortright, 31, has been involved with Leaving Prints, a direct-sales scrapbooking supply company, since November 2003. Already, she has grown her team to include more than 400 other consultants and has been recognized as one of Leaving Prints' top three performers in the country. Since she chose scrapbooking materials--a product she is passionate about--the selling aspect comes naturally to Cortright. "If some-one doesn't like the style, then they won't be successful selling it, so I always tell [potential investors] to look at the product line," she says. "It's so important to [find] a product that matches you and your personality."

As an independent entrepreneur, Cortright would have had to spend time and money creating the brand and the materials. As a business-opportunity entrepreneur, she has access to an entire product line of professional supplies.

Easy on the Pocketbook
The financial barriers associated with a business opportunity are significantly lower than with a franchise--startup costs are typically a few thousand dollars or slightly more. For Cortright, it was even less. She started her scrapbooking business from her Breckenridge, Colorado, home with an initial investment of only $30, which paid for a business kit as well as a user ID and password to access the wholesale website.

Previously, Cortright had been working on developing an online magazine but hadn't been able to turn it into a profitable business. As the mother of three, she was looking for something to bring in some extra money without a huge initial investment. "I wasn't in a position to put in a lot of money. It was one of those things where it was like, 'Well, it's $30. I'll try it, and if worse comes to worst, I would have just gotten my scrapbooking supplies at a discount,'" she says.

Cortright's business has blossomed into much more than just a way to get discounted scrapbooking supplies. Working about 20 hours a week with Leaving Prints, she can focus on her family and her e-zine while bringing in an income of just under $2,000 a month. She's also able to provide a good example for her children. "I love [that] I'm modeling the entrepreneurial spirit to my children, showing them that you have choices as to how you create your working life," she says.

The choices are certainly out there. And with numerous franchises and business opportunities available, the dream of becoming an entrepreneur has never been so attainable. You don't need major capital or extensive business sense. All it takes is a personal commitment, hard work and an understanding of the options.

To find out more about buying a franchise, visit www.entrepreneur.com/franchise. For more on buying a business opportunity, check out www.entrepreneur.com/bizopp.

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This article was originally published in the June 2006 print edition of Entrepreneur's StartUps with the headline: Ready to Wear.

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