There are so many different problems that can be mentioned when answering this question. The truth is that over 90% of the home based businesses will fail. There is no way around that. Unfortunately, most of the business owners that end up filing for bankruptcy do not even know why their home based business failed. Everything starts with a good idea but ends up in disaster. Why does this happen.
Julio Avael III points out that many of the things that home based entrepreneur think are important are truly not important. This includes facts like:
Selling a product that is cheaper than the competition.
Selling a product that is better than what the competition offers.
Selling something that has a patent.
Selling items containing secret miraculous ingredients.
At the end of the day, the one thing that matters with home based businesses is offering something that is seen as a viable solution. You need this if you want to be successful. You do not necessarily have to worry about product benefits or features. Prices are not that relevant. The competition counts but it is not the reason why the business fails. Also, when you do not have competition, the hard truth is there is no demand for a service or a product like yours. When no demand is present, you end up in bankruptcy.
Home based entrepreneurs make numerous mistakes but some of the really big ones that have to be avoided at all costs include:
Lack Of A Business Plan
Even if the business is incredibly small and ran by two people in a garage, it needs to have a business plan. The people that started Google started this way but they did know what they wanted to do and how they were going to do it. Without the business plan you walk in any direction you see fit when you wake up in the morning. Your business decisions are flawed and it is a certainty that you will not be able to succeed.
Lack Of Research
Research is mandatory for business success, no matter the size or location. Do you know what your competition is? Do you know who your target audience is? Do you know how to reach your target audience? Where do the potential customers normally buy from? How old are they? What do they eat for breakfast? The more information you have, the higher the possibility you will be successful.
No Business Knowledge Or Willingness To Learn
Most home based businesses start from an idea. Maybe you figure out that you are good at painting or you can make quick profit since you know a distributor with great prices. The idea is not enough for success. You can be the very best plumber in the world and fail when you open your plumbing business because of lack of business knowledge. In the beginning, this will not be a problem since there are lawyers and accountants to help you. However, on the long run you need to keep learning and you have to do all you can to learn as much as possible about business.
