Why Do So Many Small Businesses Fail
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by: Richard C. Falconer
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>You frequently here that 99 percent of new online marketing businesses fail within the first year. That's a staggering and very discouraging number. It was really bothering me. I just had to do some research to see for myself if it was accurate. After reading a few periodicals and numerous articles on small businesses in general my research shows that performance statistics for all small businesses, whether home based or not, are very similar across the board. I must say, to my surprise, that what I have seen statistically suggests that, actually, 60 percent of small businesses have a chance of surviving two years and 40 percent have a chance of being around after five years. The chances of success seem to be much better than has been popularly believed for some time. Some of the sources I tapped for my research include: Small Business Trends, Business Week, USA Today, Allbusiness.com and others.
>Despite the optimistic numbers I discovered in my research a large number of small businesses do fail. Why? Opinions and statistics vary. In the interests of taking a closer look at online marketing, specifically, here are some big reasons why new online marketers fail so early on in their entrepreneurial endeavors.
1. Why Are You Doing This? So many people get into the marketing business for the wrong reasons. For example, if you think you're going to get rich quick it's an unrealistic expectation. It is possible to produce substantial profits in a short period of time in the online marketing industry. However, on the average, it takes six months to a year for most new marketing entrepreneurs to be able to build strong lists of leads and consistently convert sales. If you're doing it to have more time to spend with you're family you might be underestimating how much time and effort it takes to start up a business. Furthermore, If you think you wont have to answer to anyone else think again. The demands of your customers, business partners and tax issues alone will quickly dispel any of these naive notions.
2. Mindset And Fitness. If you don't have the right mindset to begin with you are in trouble right out of the gate. To build and run a successful business takes a mental toughness that many do not posses. Failures and setbacks cannot deter you. You have to have a passion for what you are doing. You have to like, if not love, your fellow man. It really helps to be adept at dealing with a diversity of personality types. Also, many small business owners having had to fold within a year or two can be attributed to poor physical fitness and health issues. You have to stay fit to keep up with the demands of your new lifestyle. Undoubtedly your financial success will almost always be directly proportionate to your personal growth and maintenance.
3. Insufficient Capital. It not only takes money to start a business but it takes money to keep your business going until you do start seeing consistent conversion rates. The initial start up capital required to get a new online marketing business up and running is somewhere between $5k and $10k. Most people getting into marketing have not done nearly enough research to know just what they are getting into and will wind up having to fold before they ever have a chance. Buying into a marketing or sales system, web hosting and design, and add costs are just a few of the initial expenses you will incur.
4. Poor Planning And Money Management. I recently read a story about a man who hit the lotto for over $3 million. Two years later he was homeless, living in the streets of Philadelphia somewhere. His family was looking for him and put an add in the newspaper asking if anyone had seen him. If you're contemplating starting a business in online marketing because you want to make millions with your laptop from your lounge chair on the beach while sipping mai tai's... well, let's just say you might need a slight reality check. If you do decide to jump into this marketing melee and you are one of the diligent ones who find success guard it. Be wary of fraud and counterfeiters. Do your research and find reputable, successful financial institutions to help you make sound financial investments. Plan for your future and look ahead.
5. Web Sites and Technology. Remember that 70 percent of the population in The United States is now shopping and doing business on internet. Internet marketing and sales is a $90 billion dollar a year industry. Americans lead the world in internet usage. There are thousands of people just like you and I turning to the internet as a means of earning an income. There will be so much growth on the internet in the next five to ten years that it is next to impossible to represent it in numbers. Not growing with and taking advantage of new and evolving technologies and schools of thinking will, inevitably, prove disastrous.
About the Author
Richard C. Falconer owns and operates a small trucking company and is an online marketer and member of The Global Resorts Network. The Global Resorts Network is a travel company offering discounted travel through it's memberships. GRN also affords an excellent business opportunity for online marketers and travel agents full or part time. To learn more contact Richard at 209-969-6919 or visit http://www.RCF-Enterprises.com
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