Tuesday, April 1, 2008

Why Home Businesses Fail

With more than 50% of home businesses failing within the first three years of operation, you may be wondering why you started home based business at all. For many people working from home is cost effective and allows them to spend time with their family. If you want to start a home business make sure you fully understand why so many businesses fail so you can avoid these pitfalls.

Many entrepreneurs who have a good idea are not business people. However there are certain business practices that you need to understand in order to run a home business successfully. You need to think about growth, marketing, and a variety of other business issues. Running a successful home business depends not only on a good idea but also on understanding and implementing business practices.

Problem #1: No Plan of Action
A large piece of what I like to refer to as the “business success puzzle”, is a clear comprehensive business plan. Complete with an outline of a businesses structure: management team; products and services; marketing strategies; and financial goals. Small business owners and entrepreneurs that work from home, neglect to see the value of such a plan. Since the majority of their capital comes from a personal account, they are convinced that a business plan is a waste of time.
This too is a misconception. Every business needs a plan of action. At some point, you will want to review your business strategies: to find new ways to increase revenue; and generate a client database. Without a business plan, you’re heading down a road that leads to destruction.

Invest in Your Dream - Not Someone Else’s
While get rich quick schemes may sound like the perfect of road to success, they’re usually money traps designed to only benefit those that have created it. Often they promise great wealth and income in a short amount of time. Use your skills and knowledge to benefit yourself not someone else.

Many get rich quick schemes promise easy money and really do sound like a good idea. Thousands of people have invested their hard earned money into these schemes and gotten nothing out of it but disappointment.

Thousands of people have invested their life savings and lost them in money making entrepreneurial schemes. What they usually don’t tell you is the risks involved. Making money is usually never easy so don’t be fooled by schemes that seem to promise you the world. If you want to invest your money to start your own business be smart and don’t throw your money away.

Find a Market and Stick to it
You may have plenty of good ideas that you want to implement all at once. However doing too much at one time can be your downfall. Many entrepreneurs have several products or services they want to sell. Take your time and implement one at a time and get it right before you try something new.

If you have several different interests you may want to start with just one. Some services and products don’t go hand in hand and don’t try to force it. Marketing certain new products to existing customers is not always a sure fire way to get sales. Think about your marketing plans before implementing them or they may be a waste of your time.

Selling network memberships takes more then a little bit of knowledge about networking. It takes time: Time to develop contracts; organize meetings; set up events; and keep your members active in business referrals. Think about your target market!

Take time to review over any new entrepreneurial plans and compare them with your existing business plan. See if they make sense or if they will fit in with your goals. Starting your own business can take some time but carefully done success will be yours.

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