Monday, May 21, 2012

Why So Many People Fail At Their First Business

If you are thinking of going into business for yourself, then congratulations, and thank you. Congratulations are in order because very few people have the courage and determination to venture off into such a risk endeavor. Sure, if you are successful, then you can earn more money then you ever could working in an office for somebody else. But it's tough, and many people fail. A "Thank you" is in order because small businesses are the primary source of growth in any economy, and they provide the bulk of new jobs every year. And Lord knows we need some spark of economic growth these days. However, as you have likely discerned from the title of this article, success is anything but guaranteed. In this article, you'll learn why, so you can have a fighting chance.

The purpose of any business is to create products or services, and then sell them to as many people as possible. When you start a home business, then you are doing the same thing, only on a smaller scale. You are creating a product or service, and hoping to sell it to as many people as possible. Right off the bat you've got a problem. You've got to not only convince people that your product or service has value, but you've got to convince them that it's more valuable than the money in their pockets, so they'll be happy to buy it from you.

If this is a new product that has never existed before, then you've got to convince people why they need it. If it's an existing product, then you've got to convince people why yours is better than the competition. A lot of home business owners subscribe to the "build a better invention and the world will beat a path to your door" model. Sadly, this rarely is the case. You've got to aggressively sell your product to the public. This is one reason so many businesses fail to succeed.

When you start your business, you need to have a realistic business plan. You need to have a good idea of how many people will be buying your product, and how much time and money each product is going to cost you to produce. This is another area where new businesses fail. They vastly overestimate the sales they'll get, and they vastly underestimate their operating costs.

Not only that, but when their sales are below what they expected, they don't really have an idea how to increase them. In order to be successful, not only do you need to have a realistic estimate of your sales, but you've got to know what you are going to do when you have sales below estimates. If your best strategy is to simply keep your fingers crossed and hope for the best, then you might want to think twice before you quit your day job.

Probably the biggest mistake people make is giving up. Sure, you might run into trouble, but keep going. Most successful business people had to try two and three times before they found a business that was successful.

So you see, while it's tough to set up a home business, it's not impossible. Just keep pushing forward and never give up.


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