Entrepreneurial Finance: Fundamentals of Financial Planning and Management for Small Business

CHAPTER 2 SMALL BUSINESS OPTIONS

There are a few alternatives for an entrepreneur to enter the market of small business. Basically, the main couple of options are either the startup of a business from scratch or to buy an existing one and mold it to personal liking. Even the franchise, which would seem to be a third option, can be started anew or be purchased ready. Other alternatives may also sound as options but they seem to be more as given than being a choice. These alternatives are inheriting a business or gaining the control of a family business.

2.1 Starting a New Business

Starting a business from scratch could be the most difficult and risky among the other alternative ways to get into the market of small business. Assuming there is a unique and viable entrepreneurial idea, the new business project could either be classified as

1. a new-new project, which means coming up with an entirely new and unique product, service, or a method of doing something, or
2. a new-old project, which means presenting a certain modification to an existing product or service or method, or introducing them to a new market.

Either of the two approaches would require a well-thought-out process of execution that has to be based on knowing well the product, consumer, market, suppliers, and the production process itself so that the business would start on a solid ground of reality rather than on assumptions and imagination. In addition to getting familiar with all of the details of production and ...