Starting out with your own idea is the path taken by most entrepreneurs. You have an idea and you alone organize the activities necessary to setting up a business over which you will have full control.

ADVANTAGES

● Greater decision-making freedom

● Changes can be made quite quickly

● The start-up costs can be changed more easily, if necessary

DRAWBACKS

● Start-up planning may be quite long

● The clientele is not built in but must be developed

● Starting from scratch may involve higher risks, depending on the type of business

● Financing may be more difficult to obtain

There are two main ways to buy an existing business :

1. Buy the business’s assets (for example, furnishings, buildings, customer base, trademark). You will then have to choose a new legal form for operating the business, into which you will transfer the assets acquired.

2. Buy the business’s shares (if it is a corporation or company). You then purchase the business as a whole, with its history and its assets.

ADVANTAGES

● You start with an established business

● The clientele and the network of suppliers and distributors are established

● You benefit from the credibility built by the former owner

● Before making your offer to buy, you must conduct serious research and analyze the business’s financial health

● The business risks incurred are often lower than with the other types of starting a business, depending on the business that you are purchasing

DRAWBACKS

● You must respect the commitments of the former business owner

● It is more difficult to make changes to the business

● It is more difficult to establish credibility if the former owner suffered from a lack of a good reputation

A franchise is a licence for intellectual property rights concerning brands, distinctive signs, or existing knowhow regarding sales and distribution of goods or services. Acquiring a franchise gives you the right, for a specific period, to administer your business by using the intellectual property rights of the franchiser.

You must therefore sign a contractual agreement with a franchiser. This contract allows you, depending on the clauses set out in the contract, to sell a product or services generally within a protected territory.

In practice, you own a business and you assume the risks and management while being accountable to your franchiser and paying royalties to it. If you acquire a franchise or dealership, you will probably have to start a company or corporation, depending on the franchiser’s requirements.

ADVANTAGES

● The risks are lower

● The clientele is targeted

● The trademark is established

DRAWBACKS

● The cost of a franchise can be high

● The franchiser’s products and services must be used and respected

● There is little room for entrepreneurial creativity