Top 10 reasons for failure in home business
Here are some expert opinions about what a business owner should and shouldn’t do to keep a new business afloat.
1. You start your business for the wrong reasons.
Would the sole reason you would be starting your own business be that you would want to make a lot of money? Or maybe that you wouldn’t have to answer to anyone else? If so, you’d better think again.
On the other hand, if you start your business for these reasons, you’ll have a better chance at winning success:
You have a passion and love for what you’ll be doing, and strongly believe based on study and investigation that your product or service would fulfill a real need in the marketplace.
You are physically fit and possess the needed mental stamina to withstand potential challenges.
You have drive, determination, patience and a positive attitude.
Failures don’t defeat you. You learn from your mistakes, and use these lessons to succeed the next time around.
You thrive on independence, and are skilled at taking charge when a creative or intelligent solution is needed.
You get along with and can deal with all different types of individuals.
2. Poor Management
Many home businesses fail due to poor management. New business owners frequently lack relevant business and management expertise in areas such as finance, purchasing, selling, production, and hiring and managing employees. Unless you recognize what you don’t do well, and seek help, you may soon face disaster.
Neglect of a business can also be its downfall. Care must be taken to regularly study, organize, plan and control all activities of its operations. This includes the continuing study of market research and customer data, an area which may be ignored by many once a business has been established.
3. Insufficient Capital
Another common for a home business is to have insufficient funds for operations. Many home Business owners underestimate how much money is needed and they are forced to close before they even have had a fair chance to succeed. They also may have an unrealistic expectation of incoming revenues from sales.
It is equally important to consider not only the costs of starting, but the costs of staying in business. It is important to take into consideration that many businesses take a year or two to get going. This means you will need enough funds to cover all costs until sales can eventually pay for these costs.
Location is critical to the success of your business. Whereas a good location may enable a struggling business to ultimately survive and thrive, a bad location could spell disaster to even the best-managed home business.
Some factors to consider:
Where your customers are
Traffic, accessibility, parking and lighting
Location of competitors
Condition and safety of building
Local incentive programs for business start-ups in specific targeted areas
The history, community flavor and receptiveness to a new business at a prospective site
5. Lack of Planning
Anyone who has ever been in charge of a successful major event knows that were if not for their careful, methodical, strategic planning and hard work success would not have followed. The same could be said of most business successes.
It is critical for your home business to have a business plan. Many fail because of fundamental shortcomings in their business planning. It must be realistic and based on accurate, current information and educated projections for the future.
Components may include:
Description of the business, vision, goals, and keys to success
Work force needs
Potential problems and solutions
Financial: capital equipment and supply list, balance sheet, income statement and cash flow analysis, sales and expense forecast
Analysis of competition
Marketing, advertising and promotional activities
Budgeting and managing company growth
6. Lack of time you can spend on the business
Many people start a home business on a part-time basis while raising children or working outside the home. Others start full-time when family and finances allow. However you begin, figure out how may hours per week you can devote to the business. Make a weekly chart of your activities, examine it, and determine where the business fits. Don’t assume you have time and find out later you don’t.
7. Negative attitude towards the business
Negative attitude will take you nowhere. Invariably having a positive attitude towards your business and life in general will encourage you to move on.
“Twenty years from now you will be more disappointed by the things you didn’t do than by the ones you did do. So throw off the bowlines. Sail away from the safe harbor. Catch the trade winds in your sails. Explore. Dream. Discover.” Mark Twain
8. Lack of Commitment towards your efforts.
The owners of successful home businesses are the ones who are committed towards their efforts in making the business a success. You cannot achieve success without working towards it. Failing to do so will only make your business a failure before you even realize it.
“The only place you’ll find success before work is in the dictionary.” May B. Smith
9. No Website
Simply put, if you have a business today, you need a website.
At the very least, every business should have a professional looking and well-designed website that enables users to easily find out about your business. Later, additional ways to generate revenue on the website can be added; i.e., selling ad space, drop-shipping products, or recommending affiliate products.
Remember, if you don’t have a website, you’ll most likely be losing business to those that do. And make sure that website makes your business look good, not bad – you want to increase revenues after all, not decrease them.
10. Forget the success factors
When it comes to the success of any new business, you – the business owner – are ultimately the “secret” to your success. For many successful business owners, failure was never an option. Armed with drive, determination, and a positive mindset, these individuals view any setback as only an opportunity to learn and grow. Most self-made millionaires possess average intelligence. What sets them apart is their openness to new knowledge and their willingness to learn whatever it takes to succeed.
So finally, you don’t have to be one of those unfortunate people. All you need to do is to become more informed, take the necessary steps when required and know what to do!
“Many of life’s failures are people who did not realize how close they were to success when they gave up.” Thomas Edison