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Top 10 Reasons Home Based
Businesses Fail!
Something For Nothing Syndrome
Let me be perfectly honest with you, there is no such thing
as something for nothing, but you already knew that didn't
you. Then why are there so many home based business and
success programs being sold by way of TV info-commercials,
ads in magazines, newspapers, and the especially the
Internet? I personally think that we would all like to think
that there is a shortcut to success but deep inside we all
know that is success is earned. Success would not be success
if you could simply purchase a home based business system
for $49.95 that is completely automated and all you do is
collect the money, yet I have personally seen thousands of
internet sites and info commercials claiming they have a
fully automated system, plug in and you will be wealthy by
just paying your $49.95, presto you're an instant success,
no real efforts required, they even guarantee it. People are
purchasing these programs every day and they are
disappointed everyday. I will even admit to you that I have
purchased these programs and had them piled up in my drawer
(anybody else?). I am not saying that you must work your
life away, but I am saying that focused and leveraged
efforts are key to success. Lets compare a home based
business with a weight loss program. Weight loss programs
are everywhere and they range from real programs that teach
the truth, which is healthy eating and exercise are required
to get any real results, to magic weight lose plans that all
you do is take a pill and you are magically transformed with
no effort. There are some good weight lose systems out
there, but the key ingredient is you and the efforts you put
forth. So the truth about your home based business will be
the very same, the key ingredient is you and the efforts you
put forth will determine your success. If you are broke and
looking for that magic pill to save you, it does not exist,
do both of us a favor and stay at or go get a J.O.B. If you
approach your home based business with a focused and
committed attitude, understanding that a business does
require work and capital (money), you are well on your way.
The great thing about the home based business industry is
that you can get started with minimal funds compared to
other more traditional brick and mortar businesses.
Not Understanding Capital & ROI
Capital is the money required to start and operate your
business. Remember Rule #1, there is never something for
nothing. Understanding how much capital is going to be
required to start and operate your business until profits
are realized is an important factor in the success of any
business. Once your capital needs are identified you can
begin to calculate your ROI Return on Investment, or should
we say Return on Capital. So for example, if your business
will require $20,000.00 to start and operate until profits
come in and that business will generate $100,000.00 net
profit the first year then you would have achieved a
complete capital payback and a 400% return on capital first
year. Wall Street would fund this business model all day
long. The home based business industry really does offer
this type of return, that is if you understand your capital
requirements and have a business plan that provides
leverage. For example most brick and mortar businesses do
not pay back capital first years, so no profit is realized
for several years! The challenge with a home based business
is that thinking you can purchase a business for $49.95 on
the internet and then make a million dollars, frankly is a
fantasy. In fact, lets look at a franchise for example, a
$200,000.00 capital outlay is not uncommon to purchase a
franchise, that franchise would then usually produce net
profits in the neighborhood of $50,000.00 per year. Might
make it more understandable to offer a specific example. So
in this franchise example, it would take four years just to
break even and start producing a return on capital, not very
exciting is it. If success was easy it would no longer be
success. Look for opportunities that can produce a
reasonable ROI first year, and that require a minimal
capital investment. Any businesses that can produce a 1st
year capital pay back, while also producing a first year net
profit is always a winner. Look for a home based business
with great ROI potential, this will be best accomplished
with leverage. Expect to capitalize your business properly
and understand your business plan. Ask yourself how much
capital will be required and how long will it take to pay
back that capital and to then realize a net profit. Remember
the more leverage you have the more net profits you will
keep. Gross sales are important but I would rather start a
business with gross sales of $100,000.00 year and that
produces a net profit of $60,000.00 (60%) over having a
business that has gross sales of $1,000,000.00 year and a
net profit of $60,000.00 (6%). They both produce the same
net profit, but the business with the larger gross sales
will in most all cases be 10 times more expensive to start
(a lot more money up front) and will have more employees
(and taxes) and require a lot more of your time to manage.
So the return on your time in a business is what you make an
hour. The larger the lever built into your business model,
the more you make per hour spent.
Listening To The Wrong People
Why is it that if we are learning to golf we have no problem
taking lessons from the Golf Pro at the Country Club, or if
we were learning to Skydive we would be insane to learn from
any one but the Jump Master. Yet when it comes to learning
to earn a substantial personal income we usually make the
mistake of listening to family and friends most of the time,
or we actually think we are qualified to teach ourselves,
this is called the school of hard knocks. If you are looking
to earn $100,000.00 a month then doesn't it just make sense
you would look for a person or better yet, a team of people
that have already achieved this level of income and then
learn from them. We would never have our friends or family
teach us how to jump out of an airplane. The challenge we do
have is unlike in golf or skydiving were we know where to go
for expert advice, where do we go to learn to earn a
substantial personal income? Well a franchise system is one
place where a successful business system is taught to you by
other successful people, but we all know that a franchise
requires a large up front capital outlay. When evaluating a
home based business system look at the training and support,
make sure the individuals doing the training are at a high
personal level of success in that business. Most companies
have customer support teams that are just hourly employees
reading information from manuals. They are not qualified to
teach you how to reach the level of success you are looking
for, or worse yet you can only e-mail your questions or
complaints to them. You should look for a home based
business system that allows for the top income earners
within that system to be the trainers. This way you are
learning from the people who are getting results. Ask
yourself, will I have the telephone numbers of the people
with whom I will be doing business, will I have access to
the top income earners on a daily bases if necessary. Or
will there be a $49.95 kit sold up front, only to find out
that if you want to access the real training and support, it
will cost you an additional $5,000.00 or so, let alone the
other capital you will need to operate your business. I will
not mention any specific companies but they are doing
info-commercials every day. Does the home based business you
are considering have mentors and coaches who are
successfully operating the same business, and do you have
access to them for the price of the business, no hidden
costs? Remember e-books and online kits are usually designed
to make the person selling them rich, not you. If you can
not get the company on the phone before you purchase, please
be very careful. Make sure that the company is registered in
the United States and they are required to follow US law,
there are a lot of these companies whose headquarters are
offshore, ask yourself why? Websites without phone numbers
are designed to make the company money, without doing any
real training and support. When you purchase a franchise
they always include the training and support as without it
they know you will probably fail. It is usually not even an
option to leave it out and why would you? Make sure you
understand how much training and support is included in the
business system, an unlimited amount would be optimum. Live
training from real people that are successfully operating
the same business is the very best, e-mail only support can
drastically limit your learning. You deserve to be trained
by the best make sure it is included, otherwise you are
probably wasting your time!
Marketing, Marketing and Marketing
You can have the best products in the entire world or
provide the best service in your industry, but unless people
know about your products or service, you will be out of
business. There are many ways to market your business and
they can be very simple and inexpensive or they can be
complicated and very expensive. Make sure to keep it as
simple as possible and understand your conversion rates.
This means that if you spend $1,000.00 a month on
advertising and that generates 100 potential customers and 3
purchase your product. You have a 3% conversion rate. You
should also make sure that your profit from those 3 sales
provides enough revenue to pay all of your costs (including
advertising) and still provides you with a net profit.
Finding products that have a substantial profit can make
this process much easier. Repeat business can also be
instrumental to your profitability. If your customers return
and purchase again you have made a profit
without any additional marketing. Repeat business is
essential to a successful business and marketing system. It
is possible to operate a profitable business with no repeat
business, but why not look for a business with repeat
customers built in! When considering a home based business
the simpler the marketing the better.
Poor Environment Management
Working from home offers many benefits such as no commute
and no day care costs, etc. The flip side of this coin is
that distractions can exist that you do not find in an
office setting, such as crying children, barking dogs, the
television, you get the idea. The trick is to balance your
environment. It may take a little practice but by no means
is it difficult with a little planning. So take advantage of
all the positive that a home based business provides, while
learning to manage your environment, working from home can
prove to be an enormous advantage over the rat race. So
create a workspace that is a dedicated resource and set some
simple rules so that you can create a professional office
environment at home. Creating this environment is key, make
sure you have good equipment. If you are constantly
struggling with your equipment you will not be focused or
efficient. You can involve the rest of the family and make
it positive for everyone. It just takes a little
communication and cooperation to have a successful
environment. Be creative and have fun!
Having A Closed Mind
Entering the small business arena can be a change of pace.
If you are operating a business for the first time as an
owner rather than working as an employee it will be
imperative that you keep an open mind so that you can learn
new concepts and not look upon new business concepts that
you may be unfamiliar with as risky. Anytime new information
or concepts are presented keep an open mind and be a student
of the information before you form any conclusions. Be
informed and educated before you make judgments. If you are
a seasoned business professional coming from a large
corporation it is also important to be open minded as
operating a small business can be completely different. A
strong ego can keep you from learning new things. Remember
the only requirement for being an expert is results, so look
for results not at the age, color, or gender, of the person
teaching you, just their results. Be coachable and trainable
and become a student of your industry. Network Marketing and
home based businesses can offer huge leverage if you just
keep an open mind. A lot of major Corporations sell there
products through Network Marketing, and these concepts are
now taught at major universities. GM sells cars this way
now, so just because you are not familiar with a certain
type of business or compensation plan don't judge it until
you have learned all there is to know. It may be the best
way for you to get in the game if you lack a lot of capital
(money).
Poor Product or Service Selection
Selecting products or services and more importantly focusing
on the profit potential is a critical component. Yes it is
always exciting when you can work with products or services
that you are passionate about, but please remember to look
at the net profitability and your overall plan. So if your
product has a substantial profit margin you have a much
better opportunity to succeed. Look for products that can be
drop shipped to your client and products that will also
provide you with substantial net profits. This way you can
focus on marketing and running your business. Understand
that Service businesses can be more difficult depending on
the service and if you are required to provide the labor. In
most cases with services you will do the labor, but you may
be able to market other peoples services, this would be our
recommendation. With any service businesses you may find you
have just purchased yourself a J.O.B. Always look for others
to do the bulk of the work so you can grow quickly. Pick
suppliers that have large capacity. As you identify your
products or services choosing ones that allows for repeat
business will also be a key ingredient for a profitable and
successful business.
Fear of Rejection
Fear of rejection is usually caused by low self-esteem and
the lack of self-confidence. A business can not be
profitable without sales. Remember that when a potential
customer rejects your product or service he/she is not
rejecting you they are simply rejecting a product or service
at that point in their life, they may very well become a
customer at a later time, so stay positive. The most
successful people in sales are the ones who receive the most
rejection as that means they have also sold the most
products or services. The home run champion is always high
in the strike out count as well. Through practice and good
training you will master this skill and be a successful home
entrepreneur. Please do not fall into the trap we discussed
earlier were you are told the system is fully automated and
you will not talk to anyone. If it was that easy we would
all be rich. Businesses require sales and those sales
involve people and more importantly contact with these
people. Home based businesses are no exception. If you are
afraid to sell then a J.O.B. may be a better choice for you,
preferably not one is sales. Sales drive every company and
the relationship you build with your clients will keep you
in business. Look for home based businesses that will
provide you with warm contacts through your marketing
efforts so you are not cold calling. Cold calling is painful
especially for people new to sales. Be determined to develop
reasonable people skills if you intend to go into business.
You may not currently have them but you can easily learn
these skills if you posses self confidence and are willing
to do a little practice.
No Leverage
If you do not understand leveraging then you might as well
dust off your Resume and hit www.careerbuilder.com. Leverage
is the only way you will create real wealth in your life. A
business owner leverages his time by hiring employees, these
employees leverage his time. This is why service businesses
where you do the work have no leverage without employees or
someone else doing the labor. A manufacturer that uses
distributors is an example of leverage. A franchise that
sells its system and collects a portion of profits is
leverage. An author, who writes a book once and sells it
over and over again, is leverage. An actor who stars in a
film and the film is shown in theaters all over the world is
leverage. Leverage can be created in many ways but if you
ever want true wealth you must create a lever and the larger
the lever the more wealth. Leverage is the key, so look for
leverage in a system you can learn or create leverage in the
business you decide to run but find leverage and your profit
will multiply equally to the size of your lever.
Inadequate Planning
Creating a plan to achieve your goals is paramount. This
should include a DMO, Daily Method of Operations. Focus
efforts can produce the best results just like the
magnifying glass focuses the suns rays and creates fire,
your efforts can be focused for best results. Having a
precise plan with measurements is imperative, for example to
say your goal is to improve sales, is a goal without a
measure. Instead say your goal is to increase sales 30% in
the next 90 days, this is an example of a goal with measure
and a completion date. You can clearly measure if you have
reached your goal as well as track its progress along the
say. Set your DMO and follow it while consulting your goals
on a daily basis and make sure you are doing all necessary
to meet your objectives. Managing your time is important but
focused effort and balance will propel you to success, don't
forget to relax and have fun. By focusing your time, you
will surely get better results in all areas of your life.
In conclusion:
We want to make sure you have the knowledge and information,
to you make these important decisions. Our Mission is to
provide all the support and resources you require to assist
you in making an intelligent decision about the perfect
business opportunity for you.
If there you are looking for that perfect business and do
not currently have one, and what you've learned makes sense
then revisit our site for further information, or e-mail us
at info@ultimatesuccesssystem.biz.
I wish you all the success in your endeavors.
Cordially,
Bart Saxey
The Ultimate Success System Team
About The Author
Bart Saxey
I am a successful entrepreneur, I have run numerous "brick
and mortar" businesses, with great success. I was working
really hard and making good money but I was also living a
lifestyle that was eating up all the incoming money every
month. We actually were dipping into our savings every month
just to get by. We figured there had to be something else
and I am here to tell you there is....
Our Mission is to assist as many people as possible in
getting out of the rut they are stuck in. We have made many
changes in our lives due to the Ultimate Success System. The
Ultimate Success System gave us the tools to get beyond our
limited beliefs that were holding us back. With this program
we have only just begun to achieve the financial results we
deserve. We are here to support our team and others to
create results we have achieved with this program. You will
benefit from our leadership and the support of the other
team members.
With us, you are in business for yourself, NOT by yourself!
info@ultimatesuccesssystem.biz
Written By: Bart Saxey
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