Enter a family Businnes

The unites states economy is dominated by family bussines. According to some estimates, as many as 90 percent of all businesses, including the vast majority of small-and medium-sized companies,are owned by families. Even many large companies, such as chick-fil-A, continue to be owned and operated largely by people who are related to the company founder.

Adventages of a family business

Entrepreneurs who work for their family businessec enjoy the pride and sense of mission than comes with being part of a family enterprise. They also enjoy the fact that their bussinesses remain in the family for at least one more generation. Some enjoy working with relatives. They also like knowing that their efforts are benefiting other whom they care about.

Disadvantages of a family business

Family businesses have several drawbacks. Senior management positions are often held by family members, regardless of their ability. This situation sometimes mean that poor business decisions are made. It is also makes it difficult to retain good employees who are not members of the family. Family politics often enter into business decision making. Plus, the distinction between business life and private life is blurred in family-owned businesses. As a result, business problem end up affecting family life as well.

Entrepreneurs who join their family business must be prepared to make compromises. Unlike individuals who start or buy their own companies, people who work for their families lack the freedom to make all decisions themselves. They may also be unable to set policies and procedures as they would like.

Franchise ownership

Purchasing a franchise is another route by which you can become a entrepreneur. Jiffy lube station are franchises. So are many McDonald’s restaurants. Private entrepreneurs who operate them as their own bussineses own these retail outlets.

A franchise is a legal agreement that gives an individual the right to market a company’s products or services in a particular area. A franchisee is the person who purchases a franchise agreement. A franchisor is the person or company than offers a franchise for purchase.

More than 900,000 franchises are operating in the united states, and the number is growing. Franchising opportunities are available in virtually every field from motels to pet stores to video outlets. The Franchise opportunities handbook, a publication of the U.S. Departement of Commerce, list more than 1,400 franchise opportunities by category. It also provides information about costs and capital requirements. Sources for finding out about franchise opportunities include the following.

1. Buying a franchise : A Consumer Guide, published by the federal trade commission

2. Books on franchising available at your public library

3. The Wall Street Journal

4. Magazines such as Forbes, Barron’s, Entrepreneur, and Inc

Operating Costs of a Franchise

If you decide to purchase a franchise, you will have to pay an initial franchise fee, startup costs, royalty fee, and advertising fees. You may also be asked to pay for nationwide advertising of the franchise.

The initial franchise fee is the fee the franchise owner pays in return for the right to run franchise . The fee can run anywhere from a few thousand to a few hunred thousand dollars. It is ussually nonrefundable. Startup costs are the costs associated with beginning a bussiness. They include the costs of renting a facility, equipping the outlet, and purchasing invertory. A royalty fee is a weekly or monthly payment made by the owner of the franchise to the seller of the franchise. Royalty payments are usually a percentage of your franchise’s income. Advertising fees are paid to support television, magazine, or other advertising of the franchise as a whole.

Jim Saurbey purchased a Mr. Rooter franchise, a company that provides plumbing servis. In return for the right to use the Mr. Rooter name and logo, Jim paid a franchise fee of $17,500. In addition to this fee, Jim spend $30,000 renting office space, leasing vehicles, and purchasing equipment.

During it’s first year of operation, Jim’s franchise earned $36,000 in profits. He returned 4 percent of those earnings, or $1,440, to Mr.Rooter in royalty fees. During Jim’s second year in business, his company earned $51,000. That year he paid $2,040 in yoyalty fees