It's easy to lose sight of the ultimate goal of this exercise: business success. Will this venture make money? There are never any guarantees in business, so you need to do your homework. If you're buying a business opportunity, ask other owners what kind of money they've been able to generate; if you're buying a franchise, check Item 19 of the UFOC or ask current owners about their sales figures. In either case, you should hire a good accountant before you make any substantial investment. He or she can prepare a cash flow projection that spells out just how risky the investment is.
As a rule of thumb, never invest money you can't afford to lose on a business opportunity venture. You might lose personal interest in the project or experience a fizzling of the energy and persistence needed to earn sufficient sales. An enthusiastic buyer never wants to think this way, but losing the entire amount of your business opportunity investment is a real possibility. Be especially cautious about loading your investment onto your personal credit cards. Not only is this an expensive borrowing option, but if the business disappoints, your credit will sag under the financial weight of the investment.
Whether you buy a franchise or a business opportunity, look for value, follow your instincts and resist claims of easy money. Move cautiously, and you'll have a far better chance of finding the business vehicle that meets your definition of success.
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