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Why Most Home Business Owners Fail

Aug 17, 2007
A home business is probably the easiest to set up and get going quickly. All you need is a few basic things such as a telephone, a room set aside, a computer, an Internet connection and you are ready to go. Of course you need to know what your business will be and you usually have to get a permit from the city even though it's in your home. But did you know that most home - based businesses fail? They take the smallest amount of startup capital yet they have a high failure rate. One big reason why most home business owners fail is because there was a lack of adequate market analysis for their product or service. Let's face it. If there is no customer demand then there will be no sales. Just because you do something well as a hobby does not necessarily mean it will do well in the consumer market. Artists of paintings go through this all the time. Let's say you are a welder and make really nice iron art. It may be beautiful art but without the demand you will not be successful and your home business will probably fail.

The other reason why many home business owners fail is because they don't have a plan for their business. They have no business model. You have to identify your market, your market analysis and how you will go about getting financing and carrying out business operations. You need to have a strategy for penetrating the market and how to maintain a profitable level of sales once you are there.

You will increase your chances of succeeding if as a home business owner if you have a mentor or someone who can give you helpful advice while you are getting started and in the early stages of operation. Not everyone has this luxury. You certainly would not want to seek mentoring assistance from a direct competitor. Checking Internet blogs and reading stories of what other home business owners have been through is good too. But scrutinize Internet advice and make sure that more than one source is giving the same type of advice.

Home businesses also fail because they run out of money or never had much to begin with. If you are having cash flow problems then you may need to diversify your products and services a little. Some people are good at two or three skills and can try to get business in another line. You want to make sure that you have enough activities going on that will have quick cash turnover because that is what will fund ongoing activities plus buy your groceries. You don't want to take on too many large projects where payouts of cash will not happen for a few weeks because you will find yourself running out of money.

There are many more reasons why most home business owners fail. For some it is just a lack of discipline. It is easy to think that if you work from home that you can take an hour here and an hour there and still get something done. This is not true. Others fail to take any time off and end up getting burned out with then it becomes no fun and fails because of lack of drive on the part of the owner. And still other owners fail to take care of their own training and skills and keep up to date. This is especially true in technology fields where the small business owner must constantly stay on top of what is new.

Remember, if you are a home business owner, then it is up to you to watch out for these factors that cause failures. It is up to you to take care of yourself when it comes to rest and relaxation. It is up to you keep your education ongoing.
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