A Closer Look

Get With The Program

Whether the new program you're considering is a franchise or a business opportunity, you have an enormous advantage when it comes to buying into the system, and you shouldn't squander this valuable position. Your leverage? All sellers of newly created business package programs are under huge pressure to sell. That means you have an excellent chance to negotiate for favorable price and terms.

Offer the seller an amount below the asking price. After all, why should you pay a premium for a new concept that hasn't yet proved itself? Propose a structured payment over time. Go in with a portion down and the balance on favorable financed terms. Get aggressive; you'll be surprised at the response you get.

A structured, negotiated purchase might also give you some protection. If, in a few months, you find the venture doesn't live up to its promise, you can stop paying on the deferred purchase price and resolve your problem with the seller on reasonable terms, with a substantial portion of your purchase money still in your pocket.

The uncharted waters of a new program might make it attractive to risk-taking entrepreneurs seeking a challenge. But be careful: It's the calculated risk that creates wealth. Before you dive in, assess the program with care and evaluate its real potential in the market.

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This article was originally published in the November 1998 print edition of Entrepreneur with the headline: A Closer Look.

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