Hidden Causes Why
Home Businesses Fail

I came across several less-than-obvious reasons why home businesses fail. By being aware of these causes you can ensure you do not lose money because of them.

A three lettered monster: Ego

The ego is such an important and central part of a person’s identity and placement within a group or society that it will be defended as would a child.

Nobody likes to be told they don’t have what it takes or to be criticized.

This is shown in our reactions to avoid humiliation or damaged pride… we will find any excuse, become angry or blame someone or something rather than have our ego and respect injured.

- ‘It’s not my fault’
- ‘I lost all my money before’
- ‘Con artists’
- Scams’
- ‘Rubbish Company’
- ‘No support’
- ‘I didn’t think that was a problem’
- ‘They ripped me off’

For people to accept full responsibility for their own actions is to take on ego, which some people will kill to protect, that is no small mission!

There were no doubt strong reasons for this ego behaviour in our past. However in today’s culture it means that rather than accepting, learning and progressing, people stay the same or spiral the wrong way.

One of the reasons it is difficult to get the truth about why home businesses fail so often is that most messengers of bad news get the stain of the information they are relaying, in ancient times this often resulted in the beheading of the messenger!

It is this same association which means it is not good business sense to deal with this subject.

However this is a necessity here and I believe those of you reading this will have the strength of character to be able to swallow this bitter pill if it applies to you. It certainly applied to me and I only started to make progress after allowing for this element.

Yet most people want the benefits of being a successful entrepreneur. If we can analyse ourselves impartially at the start, we can then mitigate any weaknesses and amplify our strengths.

The trouble with business opportunities is they are all saying 'Hey fellow entrepreneur…' because that is what people would like to be… when the reality is the vast majority of people are torpedoed right here.

This is not to put people down who have a positive attitude to their future and potential... but just to illustrate that perhaps the biggest reason why home businesses fail is the individual.

This obstacle often has a ferocious ego standing guard over it.

We can soothe our egos if they realise the situation is not really a fair one, you will see why in the following sections, once acknowledged actions can be taken to bypass this Achilles heel.

Over the course of this research I spoke to many, many prospective entrepreneurs, the first thing that struck me was the difference in the ability of these people.

I would get off the phone to one person who made over £20,000 ($38,000) per month and next would be speaking to another who was barely literate and getting by on £240 ($430) per month of government payout. Yet they were both trying the same opportunity.

It was obvious to a third party like me that one would have a greater chance than the other of being successful. However it was also clear that it was not obvious to the less able person.

Emotion

Emotional responses are produced from a part of the brain called the limbic ring which consists of the: amygdala, hippocampus, the visual and temporal cortex.

These are responsible for our emotional reactions and stored emotions. This part of the brain is believed to have developed much earlier in our past than the areas where logic and reasoning occur.

The emotional brain has kept us alive over a long period of time, the logical ‘newer’ brain is part of what makes us uniquely human, but we are a combination of the two.

The emotional brain works on survival and genetic survival and due to its age-old reliability is invariably the decider over logic.

Our most important decisions are usually based on emotion. All great works of art or songs are driven by emotion which is their appeal.

It is how we feel about something.

Bill Gates first word on what is the secret to becoming wealthy was an emotional one: passion.

People pay the most to satisfy their deepest emotional and evolutionary needs.

Emotion in the form of passion can be an asset, but in other forms can be detrimental to any business.

Optimism over rational trading of the markets is unhealthy... buying a house you love for a buy-to-let may not be profitable... and creating your own fantastic e-product in marketing may work but equally may not sell one item.

A lack of confidence can stop you from starting a business even if you have a brilliant idea and are capable of doing it.

In the section on 'ENTREPRENEURS' you will see there are specific groups more prone to the positive emotions and others who are more prone to the detrimental emotions which are a major cause of why home businesses fail so often.

By being aware of your particular emotional make-up means you can prepare in advance or put in a strategy to make sure you avoid this common reason.

Motivation and Drive

Abraham Maslow’s: Hierarchy of Needs. This outlines what drives us to do what we do, and in what order.

1 - Physiological: Air, water, food, digestion, sleep, movement, sex
2 - Safety: Protecting yourself and your family, physical and mental, habit
3 - Love and belonging: Acceptance, group membership, love, trust
4 - Respect needs: Self-esteem, competence, ego, respect
5 - Cognitive: Understanding, wisdom, logic, exploration, curiosity
6 - Artistic: Art, nature
7 - Self-actualisation: Living your dreams, fulfilling your ambitions

The theory is that each layer has to be taken care of before you can progress to the next one:

• You need to breathe… L1 (Layer 1) before you can protect yourself L2
• You need to protect yourself psychologically, which can mean familiarity or habit… L2 before a need to use logic L5
• Emotions… L3 need to be met before logic and reason L5
• Ego… L4 needs satisfying before logic or reason L5
• Living your dreams L7 is the last need that needs to be fulfilled

One of the reasons why home businesses fail so often is because people are trying for L7 before the other needs are met. The lower ones have a stronger pull than ‘thinking’ i.e. logic and reason.

Ego, emotions, and habit will win over logic and reason every time.

Copyrighting makes use of these differing needs. Trust L3 is more important than logic… the trust or credibility of the source of information is taken more into account than the facts and figures.

It can also have a bearing on what you decide to do and how successful you will be with a particular business.

This classification covers mankind as a whole, as will become apparent in the 'Entrepreneurs' section there are internal groupings of man which also affect these drives and needs.

Well it could be the business system, it could be the timing or the market… but then has anyone else been successful with that system, at the same point in time?

If the answer is yes then by deduction we see the reason cannot be the business system but that it must be the individual, each of us.

During the research there was an excess of courses, opportunities, seminars, 'How To' and self-help books and products all touted as the key to your success. Equally observable was the fact that nobody was being successful with them.

It is the individual difference in terms of selection, entrepreneurial temperament, skills, intelligence and ability that are the biggest factors affecting whether or not home business fail.

It is therefore worth your while to look at this section including the temperament aspects of why home businesses fail.