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Why Home Businesses Fail
by: Nyall Bakk
Working from home is the least expensive way to operate a
business. But, some entrepreneurs find it an uphill battle.
More than 50% of home-based businesses fail within the
first three years of operation.
Entrepreneurs often make the mistake of not preparing for
growth, or setting effective marketing strategies. Most
entrepreneurs tend to believe that their hidden talents or
diverse knowledge in one area are enough, to create the
success they are striving for. But, this is an illusion.
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.
Get rich schemes are everywhere. Unfortunately, most people
believe the only way to make money online is to invest in
this type of program. It sounds attractive and promising.
But honestly, the only person making the ~big bucks~ is the
guy selling the program.
Several ~wanna-be~ entrepreneurs have invested their life~s
savings into Internet programs that promise the world,
thinking that they will receive the training and assistance
they need to join the thousands already making money online.
They begin handing out their money as if it was Halloween
candy. Although a few people have made these programs work,
there is a huge risk to gambling with ~get rich schemes~.
Problem #3: Changing Your Focus
Many people who start their own business try to do
too many things at once. Some products or services
have nothing to do with one another should not be
sold or marketed together. Focus on your target
market and choose products and services
accordingly.
If you already sell one type of service or product
you should evaluate any new services or products
based on the market you already sell to. If your
new service or product is not marketable to your
current client base it may be much more difficult to
find and attract a new market.
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 evaluate any potential new business
decisions and determine how viable they are.
Always refer back to your business plan and see if
new decisions make sense. By carefully
considering each new challenge you~ll make smart
business decisions that can secure your success.
This article was posted on August 7, 2005
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