There are three main reasons why home based businesses fail:
1. Poor planning
2. Poor marketing
3. Poor management
According to a report I read recently, over 90% of all network marketers, affiliate marketers or other work-at-home business people quit within the first year. Then they proceed to go out and tell everyone they know that you can't make money with a home business. It drives me crazy when I think how many people could have been successful with just a little planning, training, and time management.
If you think you have the idea for the next great business, or you've found the perfect MLM, or an excellent affiliate program - GREAT! Now, before you do anything else, write your plan. If your business is already somewhat established such as a network marketing, MLM, or affiliate program, much of that is already done for you. But you still need to plan how you are going to build YOUR team or downline or customer base or opt-in list. If you are actually looking a starting your own unique business then get a business plan template (most banks will give you one for free) and write your business plan.
82% of businesses fail due to poor cash flow or by starting out with too little money. Make sure you look at the money involved in starting your business. Many network marketing and MLM opportunities say they cost little or nothing to join. That may be true. They neglect to tell you that you have to spend hundreds of dollars each month to purchase products in order to make any money. Don't be like a friend of mine who joined a MLM company and quit her job two days later because she was going to make a fortune! Needless to say, she is back at work, in debt, and very bitter about the whole MLM industry. Could she be at home today making a decent living from this company? Possibly. But she did not consider all of the financial costs involved with successfully marketing an MLM opportunity and had nothing to fall back on until she built a business.
So you wrote your plan. You examined the financial costs of your business. You have the cash to make this work. You have a source of income or some savings put aside to live on until you start bringing in enough income to live on. You're on your way to success. Wait a minute! What was that second reason most businesses fail? Something about marketing? Oh well, it can't be that important. After all, it's Avon (or Melaleuca, or Herbalife, or Tupperware, or even Fortune Hi-Tech Marketing). I'm an affiliate for SBI! (or Amazon or Iris Silks or the Internet Marketers Club). Don't they do all that marketing stuff for me?
It's true you can capitalize off the name recognition of many of these companies. Do you think that fact that Fortune markets for companies like AT&T, DishTV, and Travelocity helps me when I talk about the business? Sure it does. But I still need to let people know what it is I do. That's marketing! If you are not doing anything to promote yourself and your business, it WILL fail. Every evening, I write down a list of things I need to do the next day. I always include at least 1 thing I can do to promote my business. You should be doing the same thing. If you don't know how to market, there are lots of great books and resources available to help you learn. The first marketing books I ever read were Guerrilla Marketing and Marketing on a Shoestring. I can't even remember who wrote them but I remember and still use much of what they taught me.
Okay - business plan, marketing - now you're all set. Right? Maybe. Don't forget the last reason so many home businesses fail - poor management. I know you're thinking "what's to manage? It's just me." Sometimes managing yourself can be more difficult than you realize. Learning to manage your time and available resources effectively can be hard. Read some of my earlier posts about treating your business like a business for more insight and don't start out on the wrong path like I did. It's much easier to develop good habits from the beginning than it is to change bad ones.
Plan, market, manage. Or as I've heard it put from so many of my colleagues and mentors - Plan your work. Work your plan. Failure or success? The choice is yours.