Businesses fail all the time. Would you like to read a good article on this point from Forbes magazine? Click Here! http://www.forbes.com/sites/ericwagner/2013/09/12/five-reasons-8-out-of-10-businesses-fail/
Eight out of 10 businesses fail within 18 months. The main reason is often given as lack of finance. Actually, businesses reach that point before that point in time arrives.
Back In Iowa
Years ago in Iowa, I was designing and building a furnace for two men who had an SBA guaranteed loan to build a ceramic detailing company. Their business model was simply to purchase blank dinnerware plates, place a decal on them, and sell them.
They had been in this business for a long time. But they had other factories decal the plates for them. These companies were purchasing blanks and placing the decals as ordered. The two new businessmen decided they would cut out that process. They would buy the blanks themselves, make their own decals, place the decals on plate blanks, fire them in my furnace and then ship them to their customers.
They told me after they failed that the only thing that worked for them was the furnace that I designed, installed and show them how to operate. The reasons they failed were not the major reasons for new start-ups failing (read the article).
Here is why they failed:
1. They blew a good portion of their money on things that had nothing to do with the business.
2. They didn’t understand the manufacturing side of their business.
3. They didn’t understand that new employees had to be trained, and it goes without saying, that they didn’t know how to train them. They were impatient and callous and new employees walked out the door as fast as they came in.
4. The selling function that they did so well in the past was neglected because of their panic while trying to start their new manufacturing operation.
5. They gave up before they really got started.
What Could Have Saved Them
The solution to their problem was really simple. Only thing they had to do was to hire an experienced manager of a decal operation. If hey have done that and stuck to sales promotion, at least to start, they would have been very successful. But they felt this business was going to start itself and that they could sit back and live a life of leisure.
Unfortunately, they started living that life of leisure to soon.
Requirements for Business Success on the Internet
You will not succeed in this business unless you:
A. Choose a profitable niche market where there is competition but not so much that you can’t succeed. Don’t go into competition with General Motors nor your local hardware store.
B. Work your niche from within, communicate with your potential customers and discover their wants and needs. Then supply those needs and wants.
C. Become an expert in your field and share important knowledge with your potential customers. Stay in contact with your customers continually to determine changes in the market. Remember that Internet customers can not kick the tires and feel how smooth that jacket is. You have to tell them all the details and show them many pics or videos so they can see the product from all angles. You need to tell them that you use what you promote.
D. Attract potential buyers to your store (website), make them feel comfortable and welcome when they get there, provide them valuable information. Use traffic generating methods to entice Internet searchers to come to your website.
E. Remember that you are in business, that you should have a business plan (SBA.gov), and that you communicate with the business community.