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Business
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:
- Choosing one that suits an
entrepreneur's needs and skills as well
as interests.
- Choosing one that pays enough in
commissions on goods or services that
makes it lucrative enough to turn a
healthy profit.
- Choosing one that is wanted and needed
by customers/clients.
- 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:
- 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.
- 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.
- Is the business opportunity solvent?
Talk to other members, and do research.
Become aware of any problems in
payments/revenues before you join.
- 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.
- 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?
- 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"!
© Vishal P. Rao. All rights reserved.
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