Once you have decided you have the characteristics of a successful entrepreneur and that you definitely want to be in business, then you must decide which business format is best for you and where to locate that business.

• Starting a business
• Buying an Existing Business
• Buying a Franchise

Starting A Business From Scratch

This option provides the highest level of flexibility to an entrepreneur, as he is able to control every aspect of the business to create a business to his own specifications. The entrepreneur directs every detail, such as product or service positioning, branding, marketing, finding the location, locating vendors and selecting the employee base. This option works best for someone who already has a specific idea for a business.

One of the biggest hurdles faced by a start-up is financing. Although starting a business generally presents the highest degree of risk of the three options, the rewards for this risk are generally the highest as well.

Buying an existing business
This option can provide a degree of comfort nonexistent in a new venture, as the company will have a tangible operational and financial history that can be evaluated. This history allows an entrepreneur to learn from the past mistakes and successes of the business, eliminating the need for the trial-and-error processes inherent in a start-up. Vendor relationships, employee base, customers and operational processes are all in place.

Sellers are often required to remain with the business during a transition period, which helps in the "training" of a new owner. That being said, significant operational changes may be difficult to instate when procedures are well-entrenched. Finding the right business to purchase can be difficult as well. It is generally wise to leverage your past experience and expertise when purchasing or starting a company, which may limit the number of potential acquisition targets within your geographic region.

Buying a franchise
This route provides a nice compromise between starting your own business and purchasing an existing one. Franchisers have established a set business plan for their franchisees, offering cookie-cutter-type guidelines for new business owners. Financing may be available through the franchiser to help you purchase a franchise. Training and operational support are provided, albeit at varying levels, depending upon the franchise.

Franchisers have an incentive to aid their franchisees because they receive a royalty fee based upon the sales or profitability level of the franchisee. Franchisers may provide help, not only in starting a new franchise, but also in the assessment of existing franchises to help promote operational improvement. On the flip side, the formulaic nature of franchises can create boundaries with regard to the ways a franchisee is allowed to run his or her business.