Own idea or buying a company?
There are different forms of entrepreneurship You can consider. It is not always necessary to invent a new idea, when there are several tested ideas out there - just for You to take and make them work for you. If you haveyour own idea, a vision and a completely new idea, You can make it work since You are the best expert of Your idea. However - there are other possibilities also.
A company may be founded based on a completely new (business) idea, product or service. Compared to using an existing business idea, this option is more challenging and it includes risks. A typical way to start a business however is to use an existing business idea but implement it in a new way or in a different market area.
Buying a business always includes risks, but this provides a possibility of starting business operations straight away. An existing business already has customers and sales. You can either buy a whole working company or just a part of an enterprise or it’s business operations. For example, if You are considering starting a restaurant business, buying a working restaurant is easier than going through the semi-heavy process of getting all the licenses and permits for restaurant premises etc.
1) Buy the whole of a working enterprise
If you are buying an entire working enterprise, You should find a reliable way to define how much the enterprise is worth - the value of the operations. According to Enterprise Finland, the most usual ways are calculating its discontinuation value, asset value and productive value. They also state that the correct sales price is the price at which a transaction can be made. In small and medium-sized companies the price is almost always a compromise between the expectations of the seller and the buyer.
2) Buy a part of an enterprise or enterprise's business operations
Instead of buying a whole enterprise you may purchase only a part of an enterprises operations (called asset acquisition). The advantages of this are that the acquisition applies to specific, selected part of the company (and for example customer base), but all old tax liabilities and other possible risks remain with the selling enterprise.
When making a decision about your way of becoming an entrepreneur, using experts to calculate and estimate risks and financial issues related to business / enterprise aquisition is recommended. Financial-management professionals such as accountants, auditors and corporate aquisition consultants advise you on the profitability of business operations and reliability of it's accounting. Legal expert could also be consulted before signing agreements, contracts or other documents related to business aquisition.
Read more about buying an enterprise here
Franchising is a way to start a business as a member of a chain and using a tested concept. The entrepreneur basically pays for the use of the tested concept as well as the materials and support of the franchisor.
By definition franchising is a collaboration model between two companies. It means long-term collaboration and a collaborative agreement between two independent enterprises. For the contract period, the franchiser assigns the right to utilise a concept in return for compensation. There is of course a fee for using the idea and there are terms of reference. The basic principle in a franchising business is that the franchisor can duplicate the idea, i.e. set up many enterprises using the same idea. Usually the franchiser provides the franchisee with training, information and assistance (contracts, finding suitable premises for the concept etc.) when starting the franchise. However the franchiser) does usually not provide financial assistance to the franchisee.
Part-time entrepreneurship is a good way to start, if You are not certain of Your business' profitability. This allows you to test Your business potential without taking on the full personal financial risk of entrepreneurship.
Part-time entrepreneurship refers to a business where the entrepreneur earns a living otherwise than as an independent entrepreneur. A part-time entrepreneur is primarily a wage or salary earner, or a student. Entrepreneurship can also be part-time or seasonal in nature. For instance, a pensioner or an unemployed person may gain additional income or life content from such an activity.
This type of business is usual in sectors such as training and personal services, leisure time recreational and physical exercise services, business management consulting, technical design, accounting companies and private physicians. When thinking of this form of entrepreneurship, it is good to remember that start-up fund will not be granted for part-time entrepreneurs.
Operating as a partner can be a very entrepreneurial activity depending on how the responsibilities and authority are split amongst the partners. For example, in family businesses, the spouse and children may be partners. In small businesses, it may be possible to get the key people to commit themselves to the enterprise and its development by transferring stakes in the business to them.
When several people who wish to become entrepreneurs establish a business together - it’s called team entrepreneurship. All these people are responsible for the success of the enterprise.