• Section: Money Guide - Category: Home Business
• Written by Mark Albertson

Nationally, eight out of ten small businesses fail in the first five years. When it comes to home-based businesses, the statistics are worse: approximately 98% of home based businesses fail. Many people cite this statistic as a reason not to start their own business. But the reality is that there are some very common reasons home based businesses fail. Knowing these reasons will allow you to prepare better and will highly increase your chances for success in your business.

Reason #1: Lack of knowledge. Many people have great ideas for businesses, or are "sold" a package or franchise, without having the basic knowledge they need to establish and properly run a business, and then they fail because they did not anticipate the market, or their competition, or because they just didn't spend the time to learn what they needed to know before

they started their business. The best initial investment is to spend time learning before you start. There is no shortage of great websites and internet newsletters available to help you learn.

Reason #2: Lack of focus. A common misconception for "newbies" is that if you own your own business, you don't have to work as hard or as much. There are, indeed many businesses, that, when established, do give you a great deal of freedom to play more, but when you are starting the business, until it is profitable (and I don't care what business you name) you must focus your attention like a laser, or the business will never succeed.

Reason #3: Lack of time. Working a full-time job, taking care of family, and taking care of yourself leaves little time to start a business. The fact is, most businesses fail because the owner just didn't spend the time they needed to doing what they needed to. You must set aside sufficient time in order to succeed.

Reason #4: Unwillingness to invest in their business. You've got to spend money to make money. And this is true even for all of the "business in a box" internet business offers available. Yes, the website may be cheap to set up, but you have to spend the money you need to in order to get customers in the door. It doesn't mean you have to spend thousands of dollars, but it does mean you've got to spend what it takes.

Reason #5: Invest in the wrong things. Spending your money wisely is just as important as what you spend. You need a mentor or a coach who has "been there before" to help you weight what is important to spend money on, and what you should pass on for now. Otherwise, you'll discover that you have spent a great deal of money on things that produce little or no profit.

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