You've decided to dump "the man"--become your own boss. Leave corporate America behind. But what kind of business will you start? Are you hoping to turn your hobby into a money-making venture? Buy an existing business? Purchase a franchise and capitalize on the franchisor's existing brand identity?

Choosing the right business for you is a life-altering decision, one that will affect you for a long time to come, so you should do some serious soul-searching before you make that decision. Some questions you might ask yourself are:

• What am I passionate about?
• What am I good at?
• What life skills do I have that will help me run my business?
• Do I have enough money for start-up costs?
• What is my ultimate goal--financial freedom, more time with my family, the prestige of business ownership?

The answers will help give you direction in choosing the right type of business for you. You have basically three options:

1. Start your own company. Many entrepreneurs are attracted to home based business opportunities, such as a consulting firm, desktop publishing, copywriting, virtual assistant business, daycare, custom clothing design, or mystery shopping operation, while others envision a traditional bricks-and-mortar business that will attract pedestrian traffic, such as in a strip mall or another high traffic area. Each type of start-up has advantages and disadvantages, but the pros and cons of starting your own business are the same:

   PROS:

   • You get to be the boss. You have total control over the company's operations.
   • You decide on what location you'll work from, what hours you'll work, and what services/products you'll offer.
   • You can work as much or as little as you want.

   CONS:

   • Financial risk--the start-up costs can be quite high, especially if you're opening a shop outside your home, and until the business starts making money, you've got to cover all expenses (including your own salary).
   • You've got to create your own brand identity and attract enough customers to keep your business alive.
   • It takes longer to build a business from the ground up than to open a franchise or purchase a turn-key operation.

2. Buy an existing business. This can be an attractive option for new entrepreneurs because it doesn't involve the research and foundation work required to establish a start-up. The pros and cons of purchasing an existing business are:

   PROS:

   • You can step right in and start running a business that's already in operation. No guesswork or long-range planning involved before you can start.
   • Financing may be easier to get based on the company's existing track record.
   • You've already got an established customer base and a preexisting structure for your daily routine.
   • You can customize the business to suit your own needs, as long as you're still serving the needs of the customers you've "purchased."

   CONS:

   • Purchase price can be steep. Since the existing business owner has already made the start-up investment and built up the business identity and customer base, the purchase price can be substantially more than starting your own business.
   • Existing debt. When you purchase a business that's already in operation, you're buying not only the business's assets, you're also responsible for the business's liabilities as well. It's vital that you do your homework--a due diligence search--to learn everything you can about the company's reputation and outstanding debt BEFORE you make the purchase.
   • Uncollectable receivables. Again, your due diligence search should include what monies are owed to the business and how old the debts are. Even though your accounts receivables are business assets, if you can't collect, then they're really a liability.

3. Purchase a franchise. Owning a franchise can be lucrative in financial terms, especially if you've got a good location and it's a well-known name in your market. You can either purchase a product/trademark franchise, in which case you're buying the right to sell their goods, such as candles, herbal supplements, nutritional drinks, cleaning products, etc., or you can purchase a business format franchise, like Starbucks or Blimpies or KFC. The pros and cons of franchising are:

   PROS:

   • Instant name recognition. People who are already familiar with, and comfortable buying from, a well-known company are already prequalified as customers.
   • In most cases, especially the business format franchise, the franchisor provides the business expertise, such as marketing, training, financing assistance, management guidance, site location, and operational procedures.
   • Financing is easier to get based on the franchisor's expertise and existing business model (depending, of course, on whether the lending institution finds your credentials and management ability credible).

   CONS:

   • Limited creative control. You may have to follow the franchisor's guidelines with respect to design and appearance and what products you can sell.
   • Purchase price, set-up fees, and maintenance fees can be more costly than the other two business options.
   • Contractual obligations. You may have to conduct your business according to the franchisor's method of operations instead of using your own business judgement; you might have to contribute to an advertising fund controlled by the franchisor; and your sales area may be limited to a specific territory, which inhibits your ability to move to a better location.

No matter what type of business you choose, your success will depend on your entrepreneurial drive, your passion for making it work, and your commitment and dedication to its daily operations. Make the choice that's right for you, then make your dreams come alive with your actions.