3-31. What would be the advantages of buying a Cold Stone Creamery franchise as opposed to starting a business from scratch? A few advantages would be that they are already popular and have a name for themselves, they offer training and support and it would be less of a risk. 3-32. What are the disadvantages of buing a Cold Stone Creamery franchise? A few disadvantages are that they have high fees that have to be paid and there is very limited control. 3-33. While franchise owners must have at least $125,000 of cash available, average startup costs are more then double this amount. What are the most likely sources of funding a franchise? I would say that the source would be through investors, or using assets to borrow the money. 3-34. How
Senior Management of PepsiCo is evaluating the potential acquisition of two companies – Carts of Colorado and California Pizza Kitchen – in order to expand the company’s restaurant business. If indeed PepsiCo decides to pursue the acquisition of one or both, they must decide how to align each of these business units in its historically decentralized management approach and how to forge relationships between the acquired business units and existing business units. In their evaluation, Senior Management is faced with the question of whether the necessary capital investment in order to purchase one or both of the businesses can be profitable for each of the acquired business units, but must also take into consideration that the additional business units will not hinder the profitability of the existing business units.
Financing decisions focus on how an organization can pay for its major projects. The financing decisions also determine the source of money in the organization. The business may require more cash for capital investments as compare to cash generated within the organization. There are two options for business to generate cash one is to obtain cash from owners, and other is to obtain cash from lenders (Kaplan Financial, 2015).
The advantages that franchisees gain when they buy their franchises include a business system, management training and support, brand name appeal, standardized quality of goods and services. Franchisees of Firehouse Subs have a complete business plan, strong brand name recognition, and the opportunity to own
1. DON’T overextend financially when buying a franchise. Never, never buy a business that you can’t afford – it is the number one reason that businesses fail. They simply run out of cash to operate and advertise before they have enough customers and cash flow to support the business.
All business activities require finance to establish itself physically in a location and to fund daily activities of the business. This money can be acquired in two ...
Ward will be contributing his own capital to the business for start-up costs, and has secured financing from several other sources, but will still need $10,000 in start-up costs.
The choice of funding is crucial for any industry or firm. Firms in general prefer raising finance from internal sources rather than external sources. Let us elaborately discuss the underlying advantages and disadvantages of raising money from internal and external sources
financing. They are often comparatively modest, in-order to help the founders get on their feet, build
where the real money comes from. Even though people think of poles and stages when thinking
Money delivered by investors to startup companies and small businesses with professed long-term development likely. This is a very significant source of backing for startups that do not have contact to capital markets. It classically needs high risk for the saver, but it has the latent for above-average earnings.
In the future, I plan to open my own business. This business will be a Limited Liability Company. The reason I chose this type of format is because my personal assets will be protected if I am sued. I will be charged more in taxes than other formats, but I will not be double taxed. The business I plan on opening will be a health food store. This store will cater to people who are athletic and health conscious. In order for me to start this company, I will have to seek capital. This means applying for a business loan to get the company going. All business must have enough money in order to sustain itself for at least five years (Morgan, 2006). My vision is to create a company that will start small and grow as time goes on in a variety of locations.
Getting your startup funded is one of the biggest challenges that entrepreneurs face. One can go about this in many different ways. I would argue that the most popular options to fund a startup are bootstrapping, Venture Capitalists and government funding (SBIR, STTR). I will discuss the possible pros and cons for each one of these, the business ideas that work best with each one of these options and other relevant factors that a founder that has to take into consideration.
Raising money is undoubtedly among the toughest aspects of running a business. Since it doesn’t grow on trees and you can’t live without it in the modern world, a business owner has to learn how to find it and use it in an efficient manner.
Sources of finance to cover the long term consist of owners who invest funds in the company. For partners and sole traders this can be their savings. For businesses, the money invested by shareholders is named share capital. Another long term source of finance is loans that can come from the bank or either family or friends. Furthermore, another long term source is debentures which are
The first step in any business is to think of or create a business idea. Without an idea, one cannot launch their business off the ground. A right direction is needed to create a business with a unique idea. However, other options include franchising or buying an existing business (1). Franchising allows an individual to run stores such as Burger King or McDonalds under the corporate name. It involves taking training classes and a heap of money in order to start a franchise. A Franchisee will have to buy products and services from the corporate entity they are franchising from, which is often required. Buying a franchise is like taking a piece of the pie from the company that is franchising and sharing that pie with everybody else. In addition having a franchise allows one to communicate and in essence become a big part of an added business opportunity (4). Franchising is far from easy to start and maintain for that matter. Starting a franchise involves a l...