Guest Author - Dianne Walker
As the unemployment rate rises to 9.5 percent with no end in sight, more people are turning to entrepreneurship to make money to support their family and pay the bills. There are many options that should be explored when deciding the best entrepreneurial path to follow.
Franchises
If you’re currently unemployed, purchasing a franchise is probably not within your budget. A franchise allows you to use the company’s brand name, products and proven systems to start and build a business. The downside is that most franchises cost between $25,000 to $150,000 to purchase. A franchise may also require continuing payments to the franchisor. One benefit of a franchise, however, is their incredible success rate at almost 85 percent as compared to a regular new business.
Buy an existing business (not including a franchise)
If purchasing a franchise presents monetary issues for the unemployed, buying an existing business may present challenges as well. Financing is difficult and start up costs can be astronomical. There is a plus side in purchasing a successful, pre-existing business. You may gain business success by default and hope that it continues to be profitable.
Start your own business
Starting your own business is another risky venture because there are no pre-existing plans to model the business after. The time and physical effort of starting your own business can be exhausting, so health is an important factor. Depending on the business, financial success is not immediate. It may take years of operating in the red before the business makes a profit. If you’re unemployed, this is not a feasible option.
Consulting
Consulting is the number one entrepreneur venture that people embark on. There are many advantages to starting a consulting business. To begin with, consulting is one of the most inexpensive businesses to start up and the easiest to end. Working as a consultant allows for maximum flexibility. You can make your own hours and decide how many clients you want to service. While the benefits of working as a consultant are numerous, the cons should not be ignored. Consulting can require long hours, many times, without additional compensation depending on the business or contract. The income is also inconsistent and is dependent on the needs of your clients. One of the major pitfalls is the lack of insurance and retirement benefits. One illness can have a major impact on finances.
Whichever options you explore, remember that a successful entrepreneur is willing to take risks. If you’re unemployed, the risk is even greater because there is little room for financial slip ups. You need to decide just how much risk your particular budget can hold.
