Business Opportunities: Success and Failure Statistics as Well
as Possible Prevention
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"!