business startup - series of health economics and entrepreneurship for pharmacy students part 5 Pharm Paul Malaba

2. BUSINESS
VENTURE
HOW TO
START-UP A
BUSINESS

3. Ways of Business Startup
3 ways to start business:
– Start,
– Buy or
– Franchise

4. Buying Existing Business
Advantages
– Successful existing business may continue to be
successful
– Existing business may already have the best location
– Employees and Suppliers are established
– Equipment is installed and productive capacity is known
– Inventories are in place and trade credits are established
– Business hits the ground - running
– New owner can learn from experience of previous owners
– It is a bargain

5. Buying Existing Business
Disadvantages
– Realities may be disguised. Real reasons are not stated
– ill will might have been created by the previous owner
– Employees inherited may not be suitable
– Location might have become un-satisfactory
– Equipment and Facilities may be obsolete and inefficient
– Change and Innovation are difficult to implement
– Inventory may be outdated or obsolete
– Accounts receivable may be worse than the face value
– Business may be over priced

6. Starting New
– Advantages
– Independence/ Opportunity to be creative and implement ideas
in your own way
– Disadvantages
– Untested Waters
– No formal support/ backup in Marketing
– Must address to all startup resources and factors 5M + I
– Generally the level is Small – Medium
– External Finance is comparatively difficult
– Generally needs greater effort - may be as a tradeoff for lesser
investment