by Ginger Marks
When do you know it is the right time to bust loose from the 9 to 5 JOB? Do you have what it takes to really make a go of this opportunity we call a home-based business? What if you give up your job and things don’t work out as you planned? These questions and more come to mind when you first begin to consider if owning your own business is right for you.
Right up front you need to look at the numbers. Read the details. A visit to the US Small Business Administration website reveals that 66% of start-up businesses are still operational after 2 years, while only 50% of those remaining will survive another 2 years. Furthermore after an additional 2 years only 40% of those remaining will continue to be serving the needs of the public. This means that after six years out of 100 businesses that opened their doors only about 13 will still be in business.
One thing I want to clarify here though is the fact that just because they are not in business after six years, those that are not operational could have closed for many other reasons than failure. On the contrary, this could mean that they were so successful that they wisely put together an “Exit Plan” and sold their thriving business or they may have moved or retired. Any number of reasons could account for this low number of viable businesses surviving for a mere six years.
Nevertheless, how do you keep from becoming just another statistic? Looking at the reasons start-up businesses fail will help you understand better what it will take for you to succeed.
Business owners who take the time to sit down and pen a business plan greatly increase their chances of survival. Why? The simple answer is that a business plan not only gives you direction but it details the way you will accomplish each phase of the business development. When you need additional funding what a financial institution is looking for is a clear statement of what you plan to offer and how you plan to take your idea from concept to delivery. Besides these reasons a well thought out business plan will help keep you on the track. It should be—and will be—your roadmap to success.
Insufficient funding is another reason businesses fail. With the business plan in place additional funding can be sought through investors and financial institutions. Consider applying for a small business loan through sources that are there to help you. Angel Investors is one source other than governmental assistance that you might apply to for support if you need additional backing. It is advisable to have at least two years of funding set aside in case things don’t progress quite how you had planned.
As I often recommend, do your homework. Know your market and your competition. Is there even a market for your product or service? Decide who your target market is. Will you offer a product or service that should be geared to a local customer or will your business be better suited for the Internetcommunity? Be sure that you have the proper education and experience to run a business. Lack in these areas can, and often does, lead to poor decision making which can cost you dearly in the end.
On the other side of the coin are the issues that lead to success. Do you have what it takes to be successful? Do you have that education? A proper education enables you to not only make good decisions but ensures you have the base knowledge to skillfully operate a business. Maturity is helpful here as well. With maturity comes the knowledge of how to handle difficulties with finesse. You may also have the resources in place to assist you in case of an unforeseen obstacle may rear its ugly head. Mature business owners, not necessarily the maturity of age, are able to focus on the goal and commitment to success. Actually talent can be a factor here as well. Do you have the natural talent and ability in place to achieve your goals?
Know when and how to expand your business, how to located suppliers and to spend within your budget. Many home based businesses are initially started for emotional reasons. Because many are started with no plan in place and very little start-up capital the home based business is at risk. However, due to the lower expenses many home based businesses are beating the odds and surviving past the expected norms.
So, know what you are in for, be prepared to take the necessary action to achieve your goal and commit to success and you will most likely beat the odds and join the ranks of the successful home based business owners.
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