8 Factors in a Successful Home Business and the Myths of Entrepreneurship

Myth #1: "Business owners work fewer hours and spend more time with their families."

Actually self-employed business owners work an average of 44 ½ hours a week. And if you're planning on becoming a millionaire, expect to put in even longer hours!

Lewis Shiff, coauthor of The Middle-Class Millionaire: The Rise of the New Rich and How They Are Changing America, found that self-made millionaires work an average of 70 hours per week.

From my own experience 30 years ago when I operated two businesses, I remember spending 2-4 hours after business hours each week working on record keeping.

So when I first considered starting my own business last spring, I was interested in reading everything I could about startups. Specifically, I wanted to learn what had changed about business ownership during the past three decades; particularly since I was heading online and my previous business experiences were strictly brick-and-mortar.

One of the titles that caught my eye in my search for hard facts was The Illusions of Entrepreneurship, by Scott Shane, Professor of Entrepreneurial Studies at Case Western.

Shane culled through a lot of research and discovered, among other things, that the U.S. is not the entrepreneurial capital of the world everyone thinks. In fact, entrepreneurism has been on a decline in this country since 1948.

Let me share some of the professor's findings that might affect your decision about going into business for yourself.

Myth #2: "You'll never become a millionaire working for someone else!"

The percentage of millionaires who attained their wealth either as employees or as business owners in the U.S. is roughly the same: 1%.

If you are not an athlete, not an actor or singer, not a top executive with a firm, not a real estate investor (during normal economic times) you are unlikely to achieve your million dollar goal.

So what are your chances of even succeeding in your own business?

Myth #3: "90% of all businesses fail within the first year."

Studies agree that most startups fail; but not 90% of them and not within the first year. If we apply statistical averages from the past-and they are consistent-then out of every 100 new businesses started this year, 29 will be around ten years from now.

As for the self-employed, out of a 100 who strike out on their own this year, about 41 will still be in business for themselves in 10 years.

Understand that these 10-year studies do not take into consideration that some of these people may have opted to retire.

In fact, it might surprise you to learn that Shane found the largest entrepreneurial age group is not the college dropout but those 45 and older! So it is just as probable that a 57-year old who finds himself downsized and starts his own business may have achieved his goal and was able to retire at 62.

Choosing to no longer be in business or self-employed does not necessarily mean these individuals failed.

Shane found another constant among entrepreneurs and self-employed: they reported higher levels of satisfaction. In fact, 62.5% report job satisfaction versus 45.9% of those who work for others.

One of the reasons for failure rate that everyone can agree upon is that most entrepreneurs start businesses in their own industry. For example, a real estate agent will start his own real estate firm. Or a computer tech will start a computer repair business.

As a result, the expert does everything himself. Much of the time the entrepreneur lacks the full range of skills to run a business. Oh, he may be able to fix a computer, but he doesn't know how to attract customers or grow a business.

By the way, Shane found the most successful entrepreneurial business model in terms of longevity and earnings is in the wholesale industry.

A wholesaler is an intermediary between manufacturers and retailers in various activities such as promotion, warehousing, and transportation.

While there are many failures that offset industry averages, the software industry produces the highest number of multi-million dollar businesses.

What are some of the other fact-based research you should know before taking the entrepreneurial path? Here are eight truths from The Illusions of Entrepreneurship that you should consider if you hope to succeed in an internet venture.

1. The gurus are right: check the profitability of your product or service before starting a business.
2. More than half of all startups begin as part-time endeavors and has no effect on the success or failure of a business.
3. About 60% of new business owners work alone, which again is not a predictor of success or failure. They key is to begin outsourcing as soon as you are able.
4. One-third of all established owner-operated businesses generate more than $10,000 in net profits annually.
5. New companies that have a marketing plan and start marketing sooner are more likely to succeed.
6. Home businesses that follow a financial plan are more likely to survive and grow.
7. New businesses that focus on a single product or activity perform better.
8. The order in which the business is launched-from identifying the idea, conducting market research to marketing it-plays a major factor in its success.

My website is an information hub for new and aspiring business owners-as well as for those trying to get their enterprise back on track. All resources I provide tend to be low or no cost. In addition, I provide breakdowns of every possible internet business model.

Before you invest any money or time, see what is involved and determine which type of business fits your dream.

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Still in the contemplation stage? Get the facts about starting your own business in my free tutorial: Web Economics 101.

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