5 Causes of business idea failure

It is a sad fact that many home based businesses fail to get off the ground. Even more fail to prosper as well as they should. Sometimes it's the business idea or business model that is at fault. Here are just some of the reasons why people come up with ideas that are not so hot.

1. Not identifying the customers. Whether you start an online or offline business, you should identify exactly where your customers will come from. Don't try to sell to everyone, at least at first. Instead, try to identify a section of the population that you will serve. Maybe it is people in a particular area, or who work or do certain things at a particular time. Maybe your customers come from a certain age or status group, or hold particular opinions. Will your product appeal to people with specialist interests? Start thinking broadly and focus in. You may identify more than one group. Do you need a different approach for each?

2. Not identifying a unique selling point (USP). What is it that you will do that makes you stand out from the rest? This doesn't have to be a totally novel idea or new product. It just has to provide to a group of customers a solution that isn't provided by anyone else, or at least by few enough people that there is room for you. It could be offering an online solution to businesses that don't usually operate online. It could be a simpler, more direct or quicker way to deliver your products. Maybe different opening hours or a unique location.

3. Avoiding competition. If there is competition, there must be a demand! You need to focus on your customers and on your USP, but you won't be able to avoid competition completely or for long. Even if you start with no competition, if your idea is any good you will get competition. Being afraid of competition can lead you to operate in an obscure niche where there just isn't enough trade to make your idea a success. You can't avoid competition, but you can stand out from them and be a success.

4. Thinking more about solutions than needs. Businesses become successful because customers have a need for what they supply. If people don't need what you provide, they won't buy, even if your idea is fantastic. Of course, there are different values to 'need'. People need food to survive, their need for a great dining experience is about pleasure, social interaction, status. So needs are identified by the customer and will change over time. How many people 'needed' a MP3 player ten years ago?

5. Being inflexible. When you've just come up with a world-beating idea, it can come as a bit of a blow to find that no-one else thinks it's so hot after all. It calls for a bit of fine judgement as to whether you stick to your guns in the face of mounting scepticism, or modify or, in the extreme, scrap your plans. Getting your market research right will help you to decide. Market research doesn't have to be elaborate - at it's simplest, it's just about talking to people. But the more evidence you can gather, the more you will be able to determine whether your idea needs to stay, alter, or be shelved.

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