Requires a lower initial fee than a franchise. Although the number of low-investment franchises has increased, the fee to get into a business opportunity is still considerably lower. The FTC requires a $500 minimum investment for an opportunity to be considered a business opportunity, but there are many that fall under this set fee, although most average around $2,000 to $3,000.
A proven system of operation or product. Existing systems serve to maximize efficiency and returns and minimize problems. It's simply a matter of passing on experience, still the best teacher. Whether they admit it or not, most people like having their hands held once in a while. During crises, the parent company is there to help the licensee over the bumps. Many people like this idea of safety in numbers.
Intensive training programs. In any new business, a lot of time and money are consumed during the learning period. A good business opportunity venture can eliminate the majority of ineffective moves through an intensive training program.
Better financing options. Because of its financial size, credit line and contractual agreements, the parent company offering the business opportunity can often arrange better financing than an individual could obtain. Financial leverage is an important consideration in any investment situation.
Professional advertising and promotion. Most small businesspeople don't spend sufficient money on advertising. When they do, their efforts are often poorly conceived and inconsistent. Many business opportunity ventures supply the buyer with print advertising slicks, radio ads, TV storyboards, etc., in order to provide a better marketing effort. Some business opportunity ventures will even have a cooperative advertising agreement under which they will split the cost of print, radio or TV ads. This type of marketing help is especially beneficial in large metropolitan areas where the cost of media is prohibitive to the one-shop owner.
Ongoing counseling. Most business opportunity ventures offer support not only through training but also through counseling from a staff of experts who offer assistance that no independent could afford. Legal advice is available to a certain degree. The most efficient accounting systems-perfect for that particular business-have been designed by experts in the field. Some licensors offer free computer analysis of records, and through comparison with other units can pinpoint areas of inefficiency or loss as well as profitable aspects of the business that are being neglected.
Site selection assistance. Experts in site selection and marketing choose locations using all the scientific tools available. Professional negotiators arrange leases and contracts to the best advantage, using the power of a large organization to influence landlords and other important figures.
Purchasing power. Many times, the parent company's tremendous buying power and special buying techniques can bring products, equipment and outside services to the licensee at a much lower cost than an independent could ever get.
No ongoing royalties. In a business opportunity, unlike in a franchise, there are no ongoing royalties to pay to the seller. The profits are all yours.