Five Things You Need To Consider When Thinking of Buying a Business Opportunity
Are you still thinking what a business opportunity means? Well, a business opportunity, also known as “Bizopp,” is the situation where an entrepreneur/purchaser buys a product, service, lease, equipment, etc, which enables them to start a licensed business.
General Criteria of a Business Opportunity
Every country has different laws regarding business opportunities. However, the gist of all remains the same. A business opportunity in Grapevine or Jackson is as follows:
- The seller of the business opportunity in Grapevine will find the buyer a suitable location where the purchaser can sells his product
- The seller guarantees that that the income the buyer will generate will be equal to or greater than the price he/she will pay for the product or service
- The seller guarantees a market present if the buyer buys a certain service or product
- In most cases, the initial fee that a buyer pays for the business opportunity in Grapevine to the seller is from $400 to $1,000
- The seller promises that he/she will buy back the service or product purchased, in the event that the product is not sold to the buyer’s customers
- Only a licensed buyer can purchase a service or a product from the seller
- The seller will provide the buyer with a marketing or sales strategy program that will help him/her to sell the product. (In some cases, the seller also provides a trade name under which the buyer can market his/her product)
Now that you know, what a business opportunity entails, let’s focus on the things that you need to consider before you purchase a business from a licensor:
1- Always Start With the Basic Information
Once you have decided on a business opportunity, get to know your licensor. Ask him/her the following questions:
- How many products or services have you sold?
- Is there currently a business opportunity that you are helping out with?
- Can I have the numbers of some of your buyers?
Before you hire a licensor, do a Google search on them. Check out their website and social media pages, read their reviews and find out who runs the business.
According to the new rules put forward by the FTC, a licensor must help the buyer with the business opportunity, provided that it is not independent. However, the seller is mostly responsible for the outer workings such as the legal paperwork, permits, payments, etc. All the inner workings must be taken care of by you. At this time, you need to think about all the skill set that will be required.
Do you have the specific talent on board that the business demands? Do not fool yourself into thinking that you can muddle your way through it. Pick a business opportunity that requires the skill set you can excel at and have the backup to make it successful.
2- Choose a Business Opportunity You Are Passionate About
Now a days, a business opportunity is all about generating high revenues. A little advice, put the profits on the back burner for a minute. Choose a business opportunity that interests you. The licensor will go on and on about how a certain product will bring in bigger profits but what good use will it be, if it brings you no joy. After a while, your focus will start to drift towards something that truly interests you. Therefore, do not settle on something because of its profit potential.
3- Does the Product have a Presence in the Market
The most important thing to ask the licensor about a business opportunity is its viability. Will people give you money for this service or product? A business opportunity is not considered a business until someone buys it. Try asking the licensor if you can meet with a person who currently operates a business opportunity in Grapevine. Spend some time with them and see how they sell the product and what the customers’ reactions are.
4- Any Competition Is Good Competition
Ask the seller who are the direct competitors of the business opportunity you are buying. Do not be fooled if the licensor says that there are no competitors of this business. A business succeeds when there is a healthy competition in the market. Search harder and find who your business will be up against. If you do not find any competition then, reevaluate your decision.
5- Is The Business Opportunity Worth It?
“I would be better off if I buy an independent business”. At one point or another, every buyer has thought this. Weigh the pros and cons and decided whether the risk will be worth it. A business opportunity brings in profits much quicker, where as an independent takes time and lots of money but it has your name on it. It’s up to you in the end. All you need to remember is choose the business opportunity you are passionate about whether it is independent or not.
While this might be hard for an entrepreneur, a buyer must think about investing in different business opportunities. Do not make yourself dependent on a single target market. Diversify your portfolio and go for something that you have always found interesting but was waiting for the right time. However, make sure that you have the funding for it. Do not give up your equity because you might lose your loyal customers. Start from something small and then build your way up.
No matter what business opportunity in Grapevine you are purchasing, you will need financing to start it. The higher the initial payment, the more equity you will have to give up. Instead of taking a loan from a bank, at this point, it is better to get a business loan from an investor. There are several companies out there that not only sell business opportunities but also provide finance to help you with the process. Every person has a different motivation behind purchasing a business. All they need to remember is that if they put their mind to it, they can do whatever they want.