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Home Business Failure: $120,000 Hindsight Part 7 of 8

Mar 16, 2008
91% of those who start will experience home business failure. In fact it's much worse - 91% is with conventional businesses over 10 years, according to Dun & Bradstreet. There is no firm statistic for home business failure, but it is without doubt going to be higher. I would guestimate there is at least 98% - 100% failure, depending on the business category. Those are the genuine odds that no one - who is aware of them - wants to tell you.

98% is not a chi square analysis or any other statistical method. It is a rough estimate which resulted, in part, from interviews with successful home business entrepreneurs, as well as talking with several hundred business opportunity seekers. On the other side it was by speaking with: spread betting companies, trading professionals, internet marketing specialists, property professionals, network marketing statistics, and home business bureaus.

The Key Cause

Dun and Bradstreet estimate 88% of business failures to be due to poor management - the human element. After a few months into the trials I realised a major variable was not just the home businesses - there are definitely good, medium and bad - but I also began to realise that I was tending to look only outward at the businesses and all the details, when in fact a major variable was me. And likewise would be each individual who tries a home business.

This is a difficult area to delve into which is why most do not, but much of the answer lies herein. Below are some probing questions that need to be taken into consideration in regards to home business failure:

Why Are People Starting A Home Business?

This is a decisive question - is it because they are already a successful entrepreneur wishing to include another income stream to an existing thriving portfolio? If this is the case the likelihood of success is high. Or, is it because the individual is penniless, indebt, frustrated and/or optimistic? If these are the reasons, then the chances of home business failure are much higher.

Why Do People Want An Off-The-Peg Business?

Ease of starting could be an answer, or wanting to use an existing workable blueprint or template, or a lack of knowledge in a new area. All of which are reasonable points.

Then could it also be because of a lack of confidence to set up a business, a seeming lack of capital, or a lack of drive? Are all people looking at his area identical? Do they anticipate getting the same results? Are they including their abilities in the equation or are they envisaging what they can do with what the author claims he pr she makes?

Why Do Sellers Use Copywriting & Hype?

Because it works - which means a lot of people who buy business opportunities are vulnerable to hype, why is that? Are these the best qualities for an entrepreneur?

Why Do People Believe They Fail?

The most frequent answers by people as to why they had failed were: a lack of money, a lack of time, scams, hype, bad programs/companies etc. They may be reasons, but then why do they not have the money or time? Why did they select bad programs? How come others made money and not them?

What Level of Commitment Are People Ready to Give?

How much time, money or effort, is somebody prepared to put in? Even if they put in all the aforesaid is that sufficient? Do they give up at the first obstacle or only with their last breath?

Even if they are determined is that enough?

My Viewpoint

After three years as an observer I would say home business failure is due to a multitude of factors:

* Biased or hopeless advice
* Most opportunities on offer are of poor quality, overpriced or oversold
* Unrealistic expectations by those taking part
* Lack of self-assessment and lack of introspection by potential entrepreneurs
* Starting a home business based on profit predictions rather than a good character fit
* Lack of awareness of temperament effects on business success
* Not treating a home business as a business

If people invest $250,000 they treat their enterprise seriously. A $270 manual on internet marketing does not have the same effect.

Success tends to favour not only the talented, but also those that are inclined to deal with the above causes.
About the Author
Charles Challis is the managing director of Applied Serendipity Ltd. He has spent the last 3 years and over $120,000/66,000 GBP researching and testing home businesses. The company website: http://www.home-business-consultant.com is a must-read for prospective home business entrepreneurs. Visit http://www.home-business-consultant.com to save your time and money.
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