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Opportunities: Success and Failure Statistics as Well as Possible Prevention
By Vishal P. Rao
Let's face it, business opportunities are a rather quick, easy way to start a
business. They are usually "turnkey" operations, where someone that buys into a
program either online or offline is provided with all the necessary elements of
immediately being in business for themselves. Business opportunity programs can
also be cost effective, as many abound, and finding one within a restricted
budget is rather easy.
The biggest challenges faced when choosing a business opportunity program are
the following:
1. Choosing one that suits an entrepreneur's needs and skills as well as
interests.
2. Choosing one that pays enough in commissions on goods or services that makes
it lucrative enough to turn a healthy profit.
3. Choosing one that is wanted and needed by customers/clients.
4. Choosing one that does not exist in an already glutted market. This would
lead to too many choices of other providers and a rather limited market for the
business owner.
The sad facts are that because of the easy start up, and the rather quick "fix"
that business opportunities present to potential entrepreneurs, business
opportunity members can quickly enter a business and just as quickly leave it.
Turnover can be quite a problem. Since little initial investment is required,
many members "jump into" a business opportunity at whim, and quickly find that
running a business is a whole heck of a lot of work!
The reason for the failure rate is also attributable to certain outlooks and
requirements that many business opportunity "joiners" fail to consider when
joining:
1. Is the business opportunity nothing more than empty promises, the old "too
good to be true" adage? Unfortunately, these types of offerings run rampant both
online and offline.
2. Is the business opportunity catering to a dying market? Markets can
fluctuate, so due diligence is needed. Research into markets, just as with any
other business is paramount.
3. Is the business opportunity solvent? Talk to other members, and do research.
Become aware of any problems in payments/revenues before you join.
4. Is the business opportunity flexible? Does the Biz Op restrict members in
their advertising methods, or are they inflexible and "distant" in their
approach to members' concerns/problems.
5. Is the business opportunity viable? Viability should be financial as well as
personal. In other words, does the Biz Op have a great financial track record
and does it meet the needs of "you" personally, as far as personal satisfaction
and approaches to sales and marketing?
6. Is the business opportunity working within the confines of federal, state and
local laws? Depending upon where a member lives, these laws can vary widely!
The real statistics on failures of small businesses, many of which now are
business opportunities and franchises, are well documented by the United States
Small Business Administration: www.sbaonline.sba.gov/. Business statistics
provided by the United States Department of Labor, report that in 1994, the
number of businesses that failed that year were divided into the following
categories:
> Bankruptcies (a 15.4% increase from 1993).
> Failures (a 17% increase from 1993).
> Terminations (.3% increase from 1993).
The Small Business Administration attributes these failures and the evolving
higher percentages to the fact that there are now MORE small businesses in the
United States overall, with a 49% increase in numbers since 1982.
The Small Business Administration also states specifically that statistically,
only one in seven can be considered a true "failure", leaving unpaid obligations
in their wakes. Others simply sell or shut their doors for a variety of other
reasons.
Since most business opportunities, at least initially, open with less than 100
employees (many are simply the owner, as sole owner and executor of all business
"chores"), then most Biz Ops are indeed "small businesses" and as such all the
pertinent failure statistics can be applied to them. What is really surprising
and rather "staggering" is the fact that most business failures are not due to
outside forces, but those that the business owner has complete control over!
These issues included lack of marketing know-how, lack of record keeping, lack
of management competence, lack of financial management, and other business
basics such as controlling employees and the inability to seek outside
assistance and advice!
The wise business owner, whether or not involved in a business opportunity, will
seek to learn and implement proper procedures, and investigate proper methods of
operation throughout the life of a business.
If this is done, a Biz Op owner, or any small business owner, has less of a
chance of becoming the "latest failure statistic"!
About The Author: Vishal P. Rao is the owner of http://www.home-based-business-opportunities.com
- One of Internet's leading website dedicated to starting, managing and
marketing a home based business. © Vishal P. Rao. All rights reserved.
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