Why Home Business Fail
The first part of this series focused one reason why businesses and especially home-business fail: the business owner doesn't know who their ideal customer is and consequently can not know what fundamental benefit or need his product satisfies. In this second part, we are going to shift focus a little bit to a very common problem that can be just as dangerous as the first.
All too often people wanting to start a home-based business invest all their time in energy in the wrong things. They think they need to "look like a business" and have the fancy business cards, and all the latest hi-tech gadgets so they look successful and organized. The story below is a powerful reminder of why this is a bad idea.
Not too long ago a friends of my wife's was laid off from her job. She worked in the senior citizen care industry. She had worked in that industry for quite some time and had a lot of experience in that field. She decided that she would start her own senior care consulting company. This was a great idea because her years of experience and knowledge could certainly benefit other care centers.
She set out, as so many do, scribbling ideas down on nice notebooks she bought at designer stationary stores; because after all, she wanted to look professional. As her business plan was coming together, she began to see that her business was going to do well and she was going to have a lot of clients. Just then her eye cuts over to her sad flip-phone that was so stylish a few years ago but now seems quite inadequate. How could she possibly keep all of her appointments and clients organized if she didn't have new "smart phone". So she went out and buys a very capable, and expensive phone, and enjoys telling her friends it is more than a phone, it is "a tax write off" for her new business.
This goes on for a couple of weeks. She has managed to spend several hundred dollars on stationary and office supplies so that she is better organized. her husband is proud of her for working so hard and being so busy. All seems fine until the bills arrive. The loss of her job is an even harsher reality now and they don't know how they are going to pay some of the bills. They quickly log into the websites for various credit cards to check and see what the available balance is on some them. As they try and determine if they can use the cards to pay some of the bills, she begins to focus on other challenges she will face in her new business and nagging questions she can't answer. Questions like: "should I incorporate?", "should I be a schedule C or LLC?", "should I get free business cards with the card maker's advertisement on the back or should I buy ones that look more 'professional'?". The great idea she had for a business that seemed so possible and so profitable, now has left her with even more bills, less money coming in, and a pretty cool phone.
All too often people want to start a business and they think they need so many things to start one. In all reality, you only need two things to start business, people who want to spend money and a way to offer them what they want to buy. Do not over complicate it and do not lose sight of it. Running a successful business at home has much more to do with focusing on what really matters, putting your compelling offer in front of as many people as possible, and taking small but deliberate steps to doing that everyday.
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