Which Business Model Is Right For Me?

Dozens of business models are available for anyone interested in becoming a business owner. The right one for you depends on several factors including financing, expertise and your goals.

In this article we will touch on three business models. They are franchises, independent businesses and internet marketing.

Let's use the Dunkin Donuts franchise, New England's top selling coffee shop, as an example. For starters, Dunkin Donuts requires a background and credit check. Initial franchise fees amount to approximately $50,000 dollars. There is a net worth requirement of $400,000 dollars of which half needs to be in cash.

The startup costs are separate from the franchise fee and are between $250,000 and 1 million dollars. These figures are not exaggerated and are readily available online. In addition, there are ongoing costs, a 5.9 percent royalty fee and 5 percent advertising fee.

An online search to discover how much you can expect to earn per year from one Dunkin Donuts franchise appears to be between $40,000 and $80,000 dollars. Benefits of owning a franchise include name brand recognition, training and national advertising.

Startup costs associated with independent businesses vary. An example would be whether or not special equipment and accommodations were required. The benefits in comparison to a franchise include not having to pay royalty fees, franchise fees and freedom from franchiser regulations. However, drawbacks include the lack of a proven track history, national advertising or name brand recognition.

A good question to ask yourself before buying is whether or not you will have enough money left over to pay for advertising. Consistent and targeted advertising is one of the keys to a successful business. According to SBA (Small Business Administration) only 66 percent of startups make it past the first two years. After four years, 44 percent and after five only 56 percent. Although, we hope to make money from our hard work and investment, the fact is five out of ten businesses fail in the first five years.

Internet Marketing is the last business model. Since its beginning, the internet has introduced many new opportunities for businesses including Affiliate Marketing, Info Products and Pay Per Click Advertising.

Affiliate Marketing is a program developed by businesses which allow you to earn commissions on sales made as a result of your online marketing efforts.

Info Products include any books (eBook), videos or software that can be purchased and downloaded online. It's not necessary to create these products as they are readily available and free to use.

Pay-per-click advertising involves two of the largest search engines, Google and Yahoo. Google calls their program Google AdSense and Yahoo's is Yahoo Search Marketing. Content related advertisements are placed on your website or blog. Revenue is generated when visitors click on them.

The benefits of internet marketing include; low startup costs, the ability to work from home and at your own pace, high growth potential, and residual income.

Although business ownership can be rewarding there are serious considerations that need to be made. As noted previously the business model that's right for you will depend on your expertise, financial statement and goals. Furthermore, advertising is absolutely essential and needs to be a part of your budget. Long hours and hard work are other factors that need to be taken into consideration. Take your time and do your homework before diving in.