Internet Based Home Businesses Failures – Five Reasons For Home Business Failure

When there is such a huge variety of ways to make money online, it seems strange that so many people fail when they try to start their own Internet based home business. Do they all make a bad choice or is there something inherently faulty with the idea that you can make money online? The statistics produced in regard to home businesses say that 50% of all home businesses will fail within the first year and 90% will come to an end within the first five years.

According to these statistics, the failure rate is at the same high level for any home business and is not just confined to Internet based businesses. There are many reasons for the high failure rate of Internet based home business ventures, here are a few of the main ones.

Picking The Wrong Business

Even experienced business people can make mistakes. It is not surprising that wrong choices are made, considering most people signing up to home based business opportunities have no previous experience of running a business or working on the Internet. The Internet is full of lurid advertisements urging people to sign up to have their own lucrative home based business. Fortunately, most legitimate home business programs offer a free trial period or money back guarantee so a mistake need not be costly if it is recognised early.

Unrealistic Expectations

Many people who start an Internet based home business are first time business owners who are drawn to the idea that you can make money online but don’t stop to think about what might really be involved. These people pick the home business opportunity that offers the highest income for the least effort, sign up, sit back and wait for the truck loads of money to start arriving. Some people just don’t seem to understand that if you want to make money online, you have to work for it. Working online is not hard compared to things like coal mining or fire fighting; you don’t exactly risk life and limb sitting in front of a computer. Even so, it is still harder work than a lot of people expect.

The Hobby Mentality

A good way to make money online doing something you enjoy is to turn your hobby into a business. If you are passionate about cooking, you could write a cookery book or start a catering business from home. Unfortunately, it does not work the other way around. You can’t take a home business opportunity and treat it like a hobby. An online home business is the most flexible way to make money imaginable. An Internet business has completely flexible hours but that is not to say you don’t have to do any work at all. Any home business must, if it is to be a success, be worked at in a consistent and businesslike manner.

Loss Of Focus

The distractions waiting for anyone trying to make money online are a day to day problem. Maintaining focus on vital tasks requires real effort. Getting led off course can happen even to experienced Internet based business owners. Even though the first time home business owner might spend long hours working online, their business can still fail if they allow themselves to be distracted.

Giving Up Too Easily

Persistence and patience are two of the main keys to Internet based home business success. Overnight success with a home based business almost never happens. Anyone who claims to achieve overnight success is probably omitting to mention the preceding months or years of work put into planning, preparation and testing. You need patience to await results and persistence to keep trying. If a thing does not work the first time, it might work if you try it another way and then another and another…

“Our greatest weakness lies in giving up. The most certain way to succeed is always to try just one more time.” – Thomas Alva Edison

Resources For Entrepreneurs

So, you’ve decided you want to start your own business. You have a novel product to sell or an expert service to deliver. You’re sure of your abilities to produce products or deliver services. But you’re a little intimidated by the other rolls you must learn as a small business owner: salesman, marketer, accountant, human resources manager and more. Luckily there are a number of excellent resources for beginning entrepreneurs to learn the ropes of owning their own business. Among the wide array of resources available, the two that are most constantly cited by small business owners as the best available are the United States Small Business Administration and local Chambers of Commerce.

The Small Business Administration has offices in most parts of the country. Although getting face-to-face assistance has become a bit more difficult in recent years due to budget cuts ordered by the Bush administration, the Small Business Administration also has a website packed with helpful information, forms, tutorials and online courses. Small business owners can count on the Small Business Administration for accurate information on laws affecting small businesses, tax and social security information and small business statistics.

The Small Business Administration’s sister organization, the Service Corps of Retired Executives provides mentoring and in-person courses for small business owners. The Service Corps of Retired Executives was created by a group of retired executives from large corporations who wanted to continue using their business skills after retirement to mentor small business owners.

Local Chambers of Commerce are another excellent resource. Chambers of Commerce typically serve two functions: Promoting the business climate of the area to outside investors and serving as a networking hub for existing businesses. However, due to the rise in entrepreneurship, many Chambers of Commerce are beginning to offer seminars to start up business owners including marketing, bookkeeping and other topics. They may also offer special networking events geared toward new businesses just getting started.

Once you get your business started, there is no better resource for networking than your local Chamber of Commerce. The annual fee is typically modest and covers your attendance at more functions than you could possibly find the time to attend. For example, the Chamber of Commerce in West Palm Beach, Florida offers networking breakfasts, lunches, cocktail hours and dinners. They also offer special networking events targeted at certain business sectors, sponsorship of corporate events and a member directory with advertisements from their membership.

Home Based Business – Making Sense Of The Failure Rate

When there is such a huge number of ways to make money at home, it seems odd that so many people fail when they try to start their own home business. Do they all make bad choices or is there something wrong with the whole idea of wanting to earn money working at home? The statistics produced in regard to home businesses say that 90% will collapse within the first five years. Ninety percent is a frighteningly high failure rate. If we assume the statistics are right, should we let them put us off working from home?

Some people quote a failure rate of 95% or 98% for Internet based businesses but, for now, let’s assume the failure rate is at the same 90% level for any home business (online or offline). The figures don’t take into account the fact that five years is a long time for most people who starr a home business. All sorts of people, for all sorts of reasons, decide to have a try at making money working at home. However, the majority of the people who decide to start a business so they can work at home are mothers of young children. They want to find ways to earn money working at home that they can fit in around the demands of a young family. After five years, their circumstances can be very different.

Five years is a long time in childhood. In that length of time a child’s needs will change dramatically. Just picture the difference between a newborn and a five year old, or a four year old and a nine year old. For a really dramatic example think about how a child will change in five years from an eight year old kiddie to a teenager.

After five years working at home, the mother might feel comfortable in arranging for part-time care for the child outside school hours so that she can go back to a career she enjoyed before the responsibilities of motherhood took over. Alternatively the mother might decide to replace her home business with a more challenging one because she finds she has extra time she can commit to working at home. Maybe more children arrive and the mother simply does not have the time or energy to run a business while caring for several small children.

In either of the first two examples, if the business brought in a profit before it ended, it can hardly be deemed a failure but, because the business ended, it will be lumped in with the doom laden figure of 90%. In the third example the business did fail but the statistics don’t give any indication that the reason had nothing to do with the actual business.

Another work at home statistic tells us that 50% of home businesses fail within the first year. Although 50% does not seem as foreboding as figures of 90% and above, for half of all home businesses to end within their first year is still a huge failure rate. The reasons most home businesses fail within the first year are mostly due to mistakes or unrealistic expectations on the part of the business owner.

Many people fail to understand that the freedom and flexibility of working from home does not mean they won’t have to do any real work to earn money. Other people fail to behave in a businesslike way: they treat their home business more like a hobby they can play around with when they feel like it. These people put a minimal amount of effort into their home business and then wonder why they don’t make a profit. Other people make an unfortunate choice and, only when it is too late, they realise they are not going to be happy running the business they picked.

People from each of these three groups often get labelled with disparaging names like “quitter” because they drop their home business at a very early stage. Patience and persistence are key to succeeding with a home business but it is also true that there is nothing to be gained in applying the whip if your horse is deceased. If you have no real hope of getting anywhere, it is far better to take a realistic view, cut your losses and use the experience as a lesson.

Personally, I have quite a bit of sympathy for the people in the third group who realise they made a bad choice and give up: it takes courage to admit to making a mistake. The people from this group who reassess their situation and pick another home business to work at often make good use of the lesson to be learned from their early failure. They account for many of the people who end up in the magic 5% – 10% who own a successful home business.