Entrepreneurship Discussion, Essay Example

One of the best approaches to assist the decision making process for examination of the advantages and disadvantages of a franchise agreement is by production of a SWOT Analysis (Strengths, Weaknesses, Opportunities and Threats).  An example of this diagram is shown here  populated with the appropriate information: (QuickMBA)

The SWOT Analysis clearly shows the benefits of being part of the “Foods of Reality’ franchise. A lot of the small business start up risk is eliminated creating a safer entry vehicle to the market.  It would be difficult to turn an offer down like this unless you have the entrepreneurial spirit to invest in and start up your own business.  If Liz had her own capital I would recommend that she starts up her own business because of the following strengths:

• She knows her town and her customer base and what would make a good organic shop in her town;
• She has contacts to a variety of wholesalers  ( one of the franchise advantages)
• She can control her inventory in accordance with local demand
• She does not have to pay someone else 1.5% + of gross revenue
• She can make the shop look to her own and customer expectations

The safe option is go with the Franchise offer but … ” Approximately 70 – 80% of traditional store front businesses fail within the first 2 – 5 years.”  (Cooper).  The more adventurous option is the thrill of starting up your own business which you control, its’ destiny is yours to forge.  The decision is based upon circumstances but if you have the capital it’s worth the risk.

Works Cited

Cooper, Joe. Top 4 problems of owning a franchise. 6 9 2006. 26 7 2010 <http://ezinearticles.com/?Top-4-Problems-of-Owning-a-Franchise!&id=294741>.

QuickMBA. SWOT Analysis. 2010. 26 7 2010 <http://www.quickmba.com/strategy/swot/>.