New Ventures & Franchise
The World of Small Business
The world of small business can be distinguished by three
characteristics These being:-
1) Independently owned and operated
2) It is not dominant in its field and starts as a follower or support
3) It has potential for growth and gradually increases employees
These kinds of business are of two distinct kind and
1) Lifestyle Business: These are small businesses intended
to provide the owner with a comfortable livelihood.
2) High Growth ventures: These are small businesses that
are intended to achieve rapid growth and high profit on
A few concepts:-
Economies of Scale: The more you produce lower the
production cost will be.
In other words we can say: Savings from manufacturing,
marketing or buying large quantities.
Start up Companies: Those companies that start from a
scratch or start fresh are called “Start up companies”.
Purchase a running business.
Economic role of Small Businesses
Introducing New Products & Services
Supplying the needs of Large Corporations
Providing Specialized goods & services
Building a Business
1) Finding an opportunity
2) Deciding on form of Ownership
3) Developing a Business Plan
Finding an opportunity
Market Penetration .
Product Development .
Product & Market Development.
Deciding on form of Ownership
Developing a Business Plan
Company & Industry
Products or Services
Design and Development plan
Operations plan (Overall Schedule )
Critical Risks & Expected Problems
Credit from Suppliers
Loans from financing
Important Managerial Activities
Planning the activities of Business
Monitoring and controlling operations
Facing the red tape
Adjusting to growth
A franchise is a business arrangement in which an individual obtains
rights from a large company to sell a well known product or service.
Franchisee: A person or a group to whom corporation gives right to
use the company name in a certain area. In exchange of an initial fee
and monthly royalty payments.
Franchiser: It is the corporation or company that gives the rights of a
Advantages of a Franchise
The Franchiser is at advantage as he earns on the reputation
and foundation that he has built.
The Franchisee is at advantage because he uses the proven
successful system of the franchiser.
The general public is at advantage as they benefit by quality
and consistency of the product or service.
Advantages of a Franchise
Wide name Recognition
Training and support
Proven wining formula
Disadvantages of a Franchise
It might be safest way to start a business but not the
Monthly payment or Royalty is to be paid regularly.
Business independence is virtually not there.