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5 Reasons Why Businesses Fail!

Terry Thomas is a direct marketing specialist. he has owned his own business since 1987 and publishes the innovative and provacative newsletter, Mail Order Marketing News. Terry’s article on why mail order businesses fail ran originally in HOME BUSINESS MAGAZINE

My book HOW TO BECOME A MAIL ORDER MILLIONAIRE addresses these same problems but Terry summarizes the 5 most common reasons and they are:

  1. Poor or Non-Existent Business Plan
  2. If you do not know where you want to go, how can you ever expect to get there? Many times I’ve seen people with good ideas never get them to market due to lack of  a clear, easy-to-follow business plan. You must clearly define your goals and objectives and develop a plan on how you are going to reach them. This includes projections for sales, income expenses and overhead. Without a detailed  business plan you’ll end up wasting a lot of time and effort and will never realize the true potential of your endeavor.

  3. Poor Cash Flow
  4. The most important aspect of any business is maintaining a positive cash flow. Without a positive cash flow, your business cannot survive, at least not for very long. You may have one month where you do a huge amount of sales, then have two or three months with less revenue  than expenses. If you do not maintain the cash flow from the sales in  the first month you will not be able  to survive  the following months. Cash flow cannot be overstated. It is the single most important factor to  sustaining a business. Perform realistic and accurate cash flow projections so that  you have enough cash resources to fulfill your business plan. Don’t guess here, realistically forecast your revenues and expenses so you’ll know how much money you’ll need to operate. Then make sure you have enough coming in.

  5. Thinking That Selling One Product Will Make You Rich
  6. It’s no secret, the key to success in any mail order business is to sell products to repeat  customers. The mistake many people make is thinking that if they can come up with one “killer product” and sell it to enough people, they will become rich. This is short term thinking and is not how you build a successful business. You must look for products that will be wanted and needed by the same customer who bought your first product. This is not as hard as it  sounds.

    For Example:
    Consider Apple computer who will not only sell you an iPad or iPhone device, they have a whole stream of other products and services to sell you such as music, movies, games, apps, iCloud and more. Or just think of hamburgers and how many ways people can prepare a hamburger. Now think of McDonalds, its not the greatest hamburger in the world but the genius was to realize that hungry people want food fast. Find a simple service that people value and they will return to use it over and over again. Apple and McDonalds are Billion Dollar Businesses built on a simple idea executed exceedingly well.

  7. Unrealistic Expectations
  8. To succeed in business, you have to be realistic. If you think that you are going to become rich in one or two months, you are most likely not being very realistic. You must be willing to stick  to a plan and slowly build your business. You must also have realistic profit expectations. For example, if you are selling something that is automotive related, you obviously have a huge potential market. Don’t say to yourself, “If I only get one percent of the market, I will be rich”. Instead strive to sell 10,000 units of the particular item within the first three months. By setting specific goals you are more likely to be realistic in your expectations.

  9. Giving Up Too Soon

If you truly believe in what you are doing, there is never a reason to give up. If you want your own business, do not expect it to make you rich overnight. Start slowly, and part time, if you have to and do not quit a job until it is fairly clear your business will succeed.

There you have it, my top five reasons why mail order businesses fail.

If you want to succeed, you should have a detailed business plan, realistic expectations, enough cash flow to maintain your business, and a group of products or services that can generate repeat sales to a strong, satisfied customer base, and finally keep at it.

DO NOT GIVE UP! You never know what tomorrow will bring, but if you give up, it cannot bring success.

Interested in HOW TO BECOME A MAIL ORDER MILLIONAIRE. The book is available on a complete money back guarantee of satisfaction. You can order it from Amazon for the regular price of $39.95 plus postage and handling or direct from the publisher for only $29.95 plus $3.50 for first class postage. Total $33.45. Order from SUPERIOR PRESS 333 N. Michigan Avenue, Suite 1032, Chicago, IL 60601

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