How To Examine Your Business Venture

In the early stages of business, the investigation of the target project can be said to be more critical and more people bothered and. Now summarise the 6 aspects of the project side of the investigation should be concerned about, or smart investors must do 6 things, respectively, are.


I, Legitimacy
The examination of the legitimacy of the project party mainly includes: 1, whether the project party has business registration, whether the project party's business registration is within the validity period; 2, some project parties may take other people's licenses, so investors also need to identify whether the license held by the project party is owned by the project party itself, if the project party provides information, pay attention to the information in the business name and its business license provided on the business name, business scope, if inconsistent, if the business name is not the same. If the business scope is inconsistent, a reasonable explanation from the project party is required. When signing the contract, sign with the legal person on the business licence and affix the official seal of the legal person on the business licence. For security reasons, further enquiries can be made to the issuing local industrial and commercial authorities. 3, according to the relevant provisions of the state on the franchise chain, the project must meet the "2 + 1" conditions (2 directly managed shops, operating for more than one year), before the external investment, which is a special policy introduced to protect the interests of investors. According to the "Science of Investment" understand that a considerable number of project parties are actively engaged in franchise chain investment does not meet this requirement, which is contrary to the relevant provisions of the state, investors must remain vigilant.


Second, credibility
In view of the current franchise chain in a series of scams, some investors have suffered heavy losses, before considering joining, it is necessary to examine the credibility of the project side. Examination of the content mainly includes: 1, the project side to provide the office address is real, whether the address is consistent with the business license. Not long ago, a few Hubei people rented a room in an office building near Beijing University, did a business license, and then put out a banner to invest in the project, and a few months later they fled with the money. Such things happen all the time and are commonplace, so investors also need to examine the duration of the project owner's business and how long it has been in operation. Generally speaking, the longer a business has been in operation and the longer it has been in business, the more reliable it is. If necessary, you can inquire about the duration of the project's lease, how long you have paid the rent and until when, and you can also inquire whether the project has paid the rent of the house on time; from the size of the registered capital of the project, you can also see its strength and ability to bear the responsibility for breach of contract, which is all very meticulous work; 2. How. At present, some fraudsters are accustomed to hit a gun for another place, has formed a business "pattern", such as the above-mentioned several Hubei fraudsters, previously operated several other projects, which are open behavior, will certainly leave traces, as long as investors are careful enough, it is not difficult to see the cracks; 3, some project parties are happy to verbally and The number of people who have joined the advertisements and information is often very large, in order to increase the attractiveness of investors, to pay attention to examine its authenticity; 4, some project parties often promote their own award-winning situation, what "top ten", "best",  "most attractive", "most satisfied investors", etc., these awards are often awarded by certain industry bodies, investment organising committees and the media, but according to Science of Investing, many of these are awards given to you as long as you pay, and the more money you pay, the more bluffing the name of the award will be. This kind of awarding of plaques is entirely a sale and purchase and is not to be trusted.


Riskiness
In order to make the project "guaranteed", the investor must conduct a thorough examination of the riskiness of the project. The content of the examination includes.


1, The feasibility of the project to examine.


2, The project forerunners to investigate. When you look at a chain of franchise projects, you can examine the project has been joined by the operating conditions, the object of inspection can be provided by the project, but preferably by the investor's own choice, without informing each other of the premise, first to observe the identity of the consumer. The inspection includes the location of the shop, the flow of customers per hour, the flow of customers throughout the day, the popularity of the products, the way the operator operates, the number of employees, the level of proficiency in the business, and an estimate of its costs and inputs and outputs.


Then appear as an investor and ask the other party directly. Most of the time, if the other party is not operating well and is in a mood for the project party, they will instead present you with the real situation, and if they are operating very well, they may hide it from you or present the situation untruthfully to guard against competition, and at such times, good judgement is needed on the part of the investor. You can then compare the situation from the inspection with the presentation from the project owner and basically come up with a judgement that is realistic. It is important to note that the general inspection of the project side of the sample shop are not reliable; investors in the poor operating conditions of the franchise to investigate, to find out why the other side of the poor operating conditions, sometimes it is the franchisee's own reasons, or the lack of ability, or do not listen to the project side of the guidance, investors generally like to listen to the franchisee's side of the story, because the other side and their own identity similar, under the same disease It's easy to make the same mistake and miss out on a good project. However, if you feel that you really do not have the ability to distinguish, it is better to believe it than not, after all, for small and medium-sized investors with insufficient risk tolerance, investment security should be the first factor to consider.


3, To understand whether the project party has any disputes in terms of intellectual property rights (technology, trademarks, etc.) and branding, and whether it has full ownership.


4, To understand the project side of the taboo, under what circumstances may be lifted to join the chain, to understand the project side of the taboo set whether reasonable, in the contract to clarify these details, if the contract does not have these elements, you can supplement the contract to explain; if necessary, but also to clarify the refund of fees paid, such as in what circumstances the investor out of the franchise, the project side must return the deposit, these should be in the contract These should be written clearly in the contract. For the franchisee to pay off a number of fees for a period of time, such as a full payment of 2-3 years of management fees, service fees for the project side, investors must remain vigilant to prevent the other side in the receipt of money to roll up and leave, or in the event that things do not go well, slip away. In order to improve the security of investment, investors can discuss with the project side of the installment payment method, such as how much to pay when learning the technology, how much to pay when getting the equipment, how much to pay when producing qualified products, etc.1,Sustainability For investors, it is easy to choose a project, of course, hope to be able to operate for a relatively long time, to bring their own benefits, for this reason, investors also need to the project side of the operation of sustainability aspects of the investigation, including: 1, the project side of the operation is standardised, including the code of conduct and charter norms. Behavioural norms: whether there is a unified internal and external logo; whether the operation process is standardized; whether the process is standardized, whether the service process is standardized, etc., whether the franchisee to provide unified standardized training, training projects, time, whether training fees, the standard of fees. Charter norms: whether the project side to provide a unified operation manual, service manual, management manual, training manual, the preparation of the manual is standardized, whether practical, whether it is easy to implement, whether not to allow ambiguity; 2, if the distribution, distribution equipment is complete, whether advanced, whether there is a unified distribution centre, the quality of the distribution staff, how the management, whether the distribution centre can respond to the franchisee in a timely manner The distribution of raw materials is often in short supply, whether the distribution price is reasonable, whether the change is unpredictable. It is normal for some project parties to charge a small franchise fee and put all their profit points on the distribution of raw materials at a later stage, but as investors invest more and more, they cannot get out easily, and the project parties are arbitrarily asking for higher and higher prices and harsher and harsher conditions when it comes to the distribution of raw and auxiliary materials, so that franchisees feel blackmailed, which is very abnormal. This is why Beijing investor Li Deyi fell out with Sichuan x Fish Head and started his own Papa Li. But most investors are not as lucky as Li Deyi, nor do they have the strength that Li Deyi has, having relied on building materials in the past to have strong savings. If a small or medium-sized investor encounter such a situation, they have to admit their own bad luck, so they have to prepare for the rainy days and take precautions. Therefore, you should make the price of delivery clear to the project, and make a note of the various possible situations and ways to deal with them, as well as the possible losses and conditions of claims in the contract. There is another type of project where the project owner does not deliver to you and the raw materials you need are easy to find on your own, so it is important to be alert to such projects. This means that the project has a very low threshold, is very likely to be copied and may have to face a flood of competition.


Generally, such projects lack the potential for sustainable development.

V. Expansiveness
Anyone would like to see their business grow bigger and bigger. If a project is still limited to a seven or eight square metre shop with a monthly income of a few thousand dollars after three or five years, it means that such a project lacks expansiveness. Expansion comes from two aspects, one is whether the project owner has the determination to make the business bigger, whether they have a long-term strategic plan, this is from a high level. From a low level, the project side in the market expansion is able to provide strong support for investors. Most of the current franchise chain projects focus on fast-moving consumer goods, catering, small food, fashion accessories, health care products, new household items, new electronics, small household appliances, community service products such as laundry, beauty salon, etc., generally very strong reliance on advertising, the project side of the advertising is sustained, whether the advertising can cover a certain range, when necessary, the project side can provide strong promotional If necessary, can the project owner provide strong promotional support, such as material support and policy support? All of these have a direct impact on the expansion of the investor's business. The ability of the project owner to continuously improve the value of its brand has an indirect impact on the investor's ability to expand effectively; secondly, the ability of the project owner to innovate its products also determines the outcome of the investor's growth.


Sixth, extension
When examining the project party, in addition to examining the character, personality, experience, knowledge structure, corporate resources and social resources owned by the project lead person, we should also focus on the project party's team. In various chambers of commerce, we can see that many investment teams are improvised by the grass-roots team, tying a tie with a red scarf, a pair of leather shoes for 3 years without polishing, a suit oil stains twist, such a team, what kind of guarantee can provide for your future investment projects, it is not difficult to imagine. The inspection of the project side team is to examine the quality of the team members, their experience in the industry, their experience in the industry, their past performance and their reputation in the circle; the second is to examine the complementarity of the team in terms of personality and professionalism; and the third is the stability of the team. For some more experienced investors, reliable conclusions can be drawn by looking at the project's team and conducting surprise interviews with the project owner.


Overall, the examination of a project, including the project owner, is a very meticulous matter that requires a good deal of patience and sufficient sensitivity on the part of the investor. It is worth putting in some of this effort for the safety of your investment.


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