Having reviewed 4 of the 7 fundamental reasons why small businesses fail (according to an interesting article on ‘BusinessKnowHow.com’), it is evident that many home-based Network Marketing businesses have a better than average chance of success. They offer high potential returns for low investments and are not subjected to the geographical constraints of some traditional businesses. What’s more, they cultivate a culture of peer support and mentoring, which can help to fast-track a new associates business to success.
Today we are going to explore the fifth reason why small businesses fail: “Lack of Planning”.
Why Small Businesses Fail #5 – Failing to Plan
Winston Churchill’s famous quote: “he who fails to plan is planning to fail” is the essence of today’s post. If you are starting a business without a structured plan, then you setting yourself up for failure.
If you are looking to secure investment for your business then a bank, or a venture capitalist, or any other investor will first ask to see your business plan. They are aware that if you haven’t planned properly and more importantly, if the numbers in the plan do not seem feasible, then they won’t get a return on their investment and won’t be willing to invest.
Perhaps you are not looking for investment. Perhaps you are putting up your own capital to start a business. Does that make business planning any less important? Is your money any less valuable than an investor’s? In fact, your money is probably more important as VCs expect a percentage of the businesses they invest in to fail! That’s because the ones that succeed make them significant returns on their investments!
Why Small Businesses Fail #5 – Business Plans
There is plenty of freely available advice on writing a business plan. Some of the key factors to consider are the size of your potential market, competition, cash-flow forecasts, etc. If we consider some of the earlier reasons why small businesses fail, then it is also important to consider the vision of your business (what you intend to offer the customer that nobody else is offering), how you will manage business functions (particularly marketing) and how many customers you will need to cover your costs. Anything less and the plan would be incomplete.
Planning – Blueprint to Success
When you write your businesses plan you are essentially preparing a blueprint for success. If you follow the steps in the plan, then you have a much better chance of achieving the end result. Is there anyone who you can consult who has already achieved the results that you hope to achieve? Do you have a family friend or acquaintance that you could meet up with to discuss your business plan? Failing that, is there any support for small businesses start-ups in your region? It is possible that government funding will be available to help you to prepare your plan, so I recommend doing your research first.
In my opinion, one of the real strengths of home business and in particular Network Marketing, is that the ‘Blueprint’ has already been written. When you start a Network Marketing business you are usually provided with a business plan and steps for building your business.
Admittedly you may wish to develop the plan. Usually you are recommended to make a list of family, friends, acquaintances, etc. and then you work through the list calling everyone to tell them about your products and business, whilst asking for referrals! It may seem a little bit like hard-selling, but working the warm market (as it is called) has been proven to work for countless associates.
Alternatively, you may choose to partner with a sponsor who has developed strategies for selling products on the Internet (to the cold market), without hard-selling to their warm market. If this is your preference then make sure your sponsor is able to produce the results that you want to achieve, otherwise how can you expect them to teach you how?
For details on my current offer to my new business associates, please use the link below: