How to Buy a Business Opportunity
We all know that ideas are a dime a dozen. While ideas may be cheap, good ideas can be rarer than free diamonds. If good ideas were that easy to come by, however, ask yourself why you didn't invent the personal computer or compact discs.
So consider buying a good idea for your business. Besides buying a franchise or an existing business, or starting a business from scratch, you can buy a business concept. You may see some of these concepts referred to as business opportunities and easy ways to make extra money.
With a franchise you're buying a name and concept by paying an up-front franchise fee and a continuing percentage of your earnings. With a non-franchise business opportunity you also buy a concept by paying an up-front fee for your easy ways to make extra money. You may also pay the seller for equipment and supplies. What you don't pay is a continuing percentage of your earnings.
While you do get a business idea that is a turnkey business where you can immediately begin your operations, you don't get many of the things that come with a franchise. Sometimes these things are good, sometimes not so good.
Understand that there is no requirement to pay any ongoing fees. Once you pay for the business opportunity, you're basically on your own. You may continue to order supplies from the seller, but there are no other fees. With a franchise you have a continuing obligation to pay franchise fees.
There are also no restrictions. With a non-franchise business you aren't required to conform strictly to a franchiser's code of operations. You have more flexibility to run the business as you see fit. And because you don't have the ongoing fees of a franchise, you have more money in your pocket to do with as you wish.
There are other things that aren't quite so favorable for a business opportunity. First is the trade name. With a non-franchise business you get the concept, such as college scholarship matching in which you help students locate scholarship opportunities, but you probably won't get the trade name, such as American College Planning Services, a franchise providing the same type of service. Although you can negotiate to keep the current business name, in most cases, you run the non-franchise business under the name you select with your easy ways to make extra money. You must establish your own name recognition.
You also don't get a protected territory. Unlike a franchise opportunity, the seller of a non-franchise business may sell the same business opportunity to your next-door neighbor, unless you have a non-compete clause in your contract.
It also lacks extensive training. You may get some reference guides or tapes to instruct you in how the business operates, but the seller of a non-franchise business opportunity will not show you how to run a business in general. You have to pick this up on your own. There may be a trade association that covers your business type that can help you.
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