Business Decisions Please Respond To The Following Identify

Business Decisionsplease Respond To The Followingidentify A Type

Identify a type of business you would like to own. Next, evaluate two (2) advantages and two (2) disadvantages of buying an existing business compared to those of starting the new business from the ground up. State your decision and explain your rationale. In buying or starting the business above, you determine that you do not need external financing. Discuss why you should write a business plan, and select one (1) element in the plan that you think will be the most difficult for you. Next, identify three (3) techniques you can use to overcome the challenges. Justify your selection of these techniques.

Paper For Above instruction

The task at hand involves a comprehensive analysis of entrepreneurial decision-making, specifically regarding the choice to buy an existing business versus starting anew. To illustrate this, I will consider the example of owning a recreational center, similar to a franchise like YMCA. This choice aligns with the growing societal focus on health and wellness, which provides a promising entrepreneurial avenue. The decision to buy an existing business, such as a franchise, or to start from scratch involves weighing various advantages and disadvantages, which influence the entrepreneurial approach and strategic planning.

Advantages of purchasing an existing business are numerous. First, an existing business comes with a proven operational framework, brand recognition, and an established customer base, reducing the risks associated with new ventures. According to Shane (2003), familiarity with operational routines and customer loyalty can accelerate the path to profitability. Second, buying an existing business often requires less initial effort in establishing market presence, as many foundational elements are already in place, allowing entrepreneurs to focus on growth and scaling.

Comparatively, disadvantages include the potential for hidden liabilities or operational inefficiencies that are not immediately apparent. As noted by Hedley (2018), acquiring a business may also involve significant upfront costs or incompatibility with the existing organizational culture, which could impede progress. Conversely, starting a business from the ground up offers the advantage of complete control and customization, allowing entrepreneurs to innovate and tailor the business to current market demands. The disadvantages include higher risk and the considerable time and effort necessary to build a brand, develop customer relationships, and establish operational processes.

In my evaluation, the decision leans toward purchasing an existing franchise like YMCA’s recreational center due to lower initial risk, brand recognition, and resource availability. This aligns with my goal of entering a market with an established community presence rather than creating one from scratch. The rationale relies on the strategic advantage of leveraging an existing organizational structure and goodwill, which can facilitate quicker profit realization.

Even without external financing, a well-crafted business plan remains vital. It provides a roadmap that details all operational, financial, marketing, and staffing strategies, reducing uncertainty and aligning resources towards strategic goals. A business plan acts as an essential management tool, helping to identify strengths, weaknesses, opportunities, and threats (SWOT analysis), which are crucial for sustained growth.

The element of the business plan that appears most challenging is projecting future income and setting realistic monthly goals. Forecasting revenues involves predicting customer retention, seasonal fluctuations, and market trends, which are inherently uncertain. Accurate financial projections require comprehensive data analysis and market insights, posing a significant challenge for new entrepreneurs like myself.

To overcome these challenges, three techniques can be applied. First, conducting thorough market research to gather real data on customer behaviors and competitors’ performance is essential. This will refine income projections and ensure goals are based on actual market conditions (Lussier & Pfeifer, 2016). Second, adopting a conservative approach by setting lower, achievable goals initially allows adjustments based on real-time business performance. This mitigates risks related to overestimating income or underestimating expenses. Third, obtaining sponsorships or forming strategic alliances can provide additional financial or marketing support, bolstering revenue streams and expanding market reach (Kuratko, 2016). These techniques are justified as they create a buffer against unforeseen challenges and foster adaptive management.

In conclusion, choosing to purchase an existing business such as a franchise offers significant strategic advantages over starting a new venture. Although forecasting future income is challenging, employing techniques like comprehensive market research, conservative goal-setting, and strategic partnerships can address these difficulties. A detailed business plan remains indispensable, guiding the entrepreneur through the complexities of operations, finance, marketing, and staffing, ultimately increasing the likelihood of long-term success.

References

• Hedley, B. (2018). The art of business acquisition: Managing hidden liabilities. Journal of Business Strategy, 39(2), 45-52.
• Kuratko, D. F. (2016). Entrepreneurship: Theory, process, and practice. Cengage Learning.
• Lussier, R. N., & Pfeifer, S. (2016). Entrepreneurship and Small Business Management. SAGE Publications.
• Shane, S. (2003). A General Theory of Entrepreneurship: The Individual-Opportunity Nexus. Edward Elgar Publishing.
• Hedley, B. (2018). The art of business acquisition: Managing hidden liabilities. Journal of Business Strategy, 39(2), 45-52.
• Kuratko, D. F. (2016). Entrepreneurship: Theory, process, and practice. Cengage Learning.
• Lussier, R. N., & Pfeifer, S. (2016). Entrepreneurship and Small Business Management. SAGE Publications.
• Scarborough, N. M., & Cornwall, J. R. (2015). Essentials of Entrepreneurship and Small Business Management. Pearson.
• Hedley, B. (2018). The art of business acquisition: Managing hidden liabilities. Journal of Business Strategy, 39(2), 45-52.
• Kuratko, D. F. (2016). Entrepreneurship: Theory, process, and practice. Cengage Learning.