- Business and Employment
Why businesses fail and how to avoid it
Why businesses fail and how to avoid mistakes
Below are examples from my personal experience. What has been learned is that what is failure for one is often success for someone else. In business things are a little different than in most peoples lives. Once your business is running its now what you know that is more important than who you know. You have sold yourself as the expert in your field and now you have to prove it. This applies to what you are selling or the service you are providing.
It however does not apply to having all the knowledge needed to keep the business end running. Being an expert in your field doesn't cover everything, there is always something new to learn so a wide range of friends and business contacts will help immensely. Remember to treat each new contact and customer as you would a good friend.
This is what has worked for me. Anyone who gives me money is a friend even if they have received value for it. Contacts have the potential to show me how to earn more or keep the tax man satisfied. So everyone has the ability to help me in some way.
Don't overlook even small details
My first move into the business world was as a manager. Two small details were overlooked which caused the business to go under a few months after it was open under my management. The owners actually lost the business because of my failure. It didn’t make me feel good and taught me a valuable lesson. Don’t over look even small details. A decision made to keep the business open seven days a week, in a small (population 320) “Mormon town” was one, and only receiving an electric bill once a year, which was not brought to my attention, was the other.
You have to have a business plan
My first business was Rent a handyman. It was well researched, no small detail was overlooked, everything necessary was in place including a good business plan and there was enough money to survive until it took off. The sixteen to twenty hours a day spent growing it were more than my body could handle, so it was sold. A good set of books, the professionalism on the phone and having all correspondence edited at least once was one of the reasons it was easy to sell. In this instance the business failed for me but the new owners ran it at a profit for years.
Resources and friendships
Knowing time was important to me the next businesses was a partnership. It was closed when my partner retired. He retired three years before our original plan because two of his friends had died shortly after they retired. There was not yet enough money for me to buy the equipment he had furnished to keep it going or enough time to find another partner.
Know your limits and live within them
Taking with me the lesson learned from the last partnership, my next partnership was in a roofing company. It kept going after my retirement from roofing. Statistics had shown at that time the average life expectancy for a roofer who worked over the age of thirty five was seven years. One friend and one relative had gone beyond that limit and had fallen off roofs to their deaths. There was no wish on my part to join them. This time a good business plan had been written and followed so my partner was ready to buy me out when the time came.
Learn everything you can before you invest
The next business was muddled mess, my roommate borrowed my credit card to buy an internet site. Everything got messed up when both names appeared on everything. Soon calls and letters started coming in saying you have to pay for this and that. Another company approached me and said we can straighten everything out if you buy this schooling from us. It was an offshoot from the site which had been purchased. They made a recommendation that the business be incorporated, a business plan paid for, and that a bookkeeping service would be necessary for help with tax deductions.
Never invest more than you can afford to lose
Those items took my credit card $2000 over the limit so when the monthly bills for the business started coming in they were sent back. There was not enough capital, even borrowed to get it off the ground so it was never really started. Make sure you have enough capital and keep close tabs on your credit card balance if you are using that route. The best way to go is a Small business loan. This way you have one payment which is easier to make while the business is in the start up phase.
If you don't have these don't start an online business
When starting a business, this includes online businesses, there are two types of output required. One is money to live on until things are moving well, the second is time. To my knowledge there is no way around either. Even "going with everything free" a person has to have a roof over their head and food to eat,
If you have time and an outside income but no money to start a business
You can start earning an online income without spending a single penny as long as your willing to spend hours researching everything available, or already have your own idea. If you don't have your own idea there are programs which are free to join and have no monthly fees. If you really invest time you will learn enough to survive within a matter of months. These are best used with an auto-responder as is true with any online business. To my knowledge there is one available online free and one that can be purchased with Virtapay.
One thing to avoid for internet marketers
It is highly recommended to avoid sites where you have to buy and product monthly which require people below you to earn your income. The current trend is businesses which work by selling to people and business who are under utilizing what is available online. Many of these companies offer the ability to earn from people who sign up below you. Just make sure your income doesn't entirely depend on the ones below you doing anything. It takes time and money to gain qualified people below you.
If you don't succeed the first time don't be afraid to try again
The best thing you can do if you fail is try again. Check over everything you did, figure out what mistakes you made and avoid them the second time around. Remember if you put together a good business plan and follow it your chances of success increase by about fifty percent. Find the right fit, research it well, make sure to check even the smallest details, then go for it.
From the ashes
In our case the corporation formed for the original online business was still intact. For a while however we weren't aware we had a product or service. Not wanting it to go to waste we found a way to use it. This is where the hubs about the bet started.
Having been badly hurt by the first business we decided to see if there was a way to earn money helping others who are as bad off or worse than we are. Months of research showed there were possibilities which we then checked into. While doing this research we also found we actually owned rights to three websites. We have spent time building upon what we found and added new services which help people and our local economy. Now we have a system where everything fits together to help a lot of people and it is working.