| Many people want to open their own business. | | | | over a thousand dollars. |
| They not only crave the possibility of financial | | | | Second, the difficulty of managing the two |
| success, but the independence as well. But the | | | | businesses will be very different. An internet cafe |
| entrepreneurial world is far more complex one | | | | does not require any skilled labor. It could probably |
| than the job world. One of the decisions that | | | | be run by a computer enthusiast with some |
| must be made is what type of business to open. | | | | general computer knowledge. In contrast, a gym |
| In this particular example we will contrast a gym | | | | will need a team of personal trainers who are |
| with an internet cafe. | | | | properly certified. Gym equipment will break down. |
| Both businesses seem relatively similar. Both are | | | | And because the locations are big they will require |
| retail businesses selling a popular product to the | | | | multiple personnel. |
| general public. But the similarity stops there. | | | | Third, the cash flow will be very different as well. |
| For one, the start up costs will probably differ a | | | | The lifeblood of gyms are the monthly |
| lot. A gym has much higher fixed costs. The | | | | membership dues. This can be very profitable, as |
| location will need to be larger. Gym equipment is | | | | the costs of each additional customer is nothing |
| very expensive, with the best machines running | | | | because most of your costs are fixed. But it can |
| well into thousands of dollars. Meanwhile, an | | | | take awhile to build a stable customer base. |
| internet cafe relies on cheap computers. Even | | | | Meanwhile, an internet cafe relies much more on |
| machines built for computer gamers will barely run | | | | walk-in traffic. |