Why do so many people fail at Home Based Businesses, Network Marketing, MLM and/or Direct Sales? In most cases, failure happens because fundamental truths or realities about what it takes to succeed are ignored or not known by the new Home Business owner.

Here’s 8 of the Big Truths or Realities that every aspiring Home Business Owner needs to know before they start their Home Business.

Why you start a Home Business will dramatically effect your success chances along with dozens of other factors, some within your control, some not. But for the purposes of this article lets assume you have found that “Can’t Miss” Opportunity; you’re excited; you’ve sent your money, here comes your millions right? Wrong!

There is much you must do to find success no matter what your background is going in to be successful. This article will explain some of the main reasons people fail. It by no means is the complete list, but be sure you understand these basics and are OK with the challenges ahead before you start that new Home Business … or don’t get started or signup!

Let’s put the TRUTH on the table … there is a very high failure rate in home businesses. Less than 2% actually find the financial freedom they seek (ie. The big money). Another 3% make some money, perhaps enough to earn a living. Everyone else strikes out.

Society looks at home business, and more in particular at Network Marketing or MLM as an almost less than noble way to earn a living. The truth is that many people have completely changed their lives in very positive ways in Network Marketing or MLM. However, the more frequent truth about MLM is that almost everyone fails.

It is the very few and highly publicized success stories (like mine) that bring people in droves looking for a low cost (low risk) path to riches. Behind every success story though is some serious work, experience, and the absence of the Failure modalities outlined herein.

The real questions is WHY do so many people not succeed? Why do so many people fail in home business?

It comes down to the fact that each and every person is different coming in. Take my case, I came to the home business arena with 17 years of mostly successful entrepreneurial experience. I negotiated deals, sweat payrolls on Fridays, traveled to get customers, lost big customers, etc. I ran the gauntlet of success long before I got in this industry.

So would it be fair to say that someone that is working at Home Depot can pull off what I did as fast as I did? Probably not? Does that mean that people without experience have no shot at success in Home Based Business? Not at all. It just means that they have obstacles to overcome which any successful entrepreneur and/or upper management individual already has overcome in their own careers and lives.

Here are 8 realities, hurdles, or obstacles that any and all successful entrepreneurs have jumped, and the reasons that so many people don’t make it in Home Based Business, Free Enterprise, Network Marketing, Direct Sales, MLM, and even small business.

Reality #1 – Lack of Mental Toughness
Many people entering free enterprise for the first time have no-clue as to what real mental toughness is. That’s why mindset training is so important to the new Home Business owner’s success. Acquire the mindset that you are going to do whatever it takes to succeed and you are way more likely to join the ranks of the successful. In fact I would almost guarantee that you’ll make it with this key mindset element.

Reality #2 – Choosing the Wrong Sponsor / Up line / Mentor
Un-Ethical Marketers are abound. Unfortunately, many Home Business marketers see their responsibility is to simply “show” someone the opportunity and get paid for just that. Here’s the typical line “if I could show you a way to accomplish your goals would you … [pay me]” is still widely used in network marketing sales pitches. (Not by this author).

If you break that sentence down, it clearly shows that the marketer expects to get paid for “introducing” the aspiring Home Business owner to the business, and nothing more.
Because of this, be sure you are going to work with the right person with the right opportunity. Your up line/sponsor should be able to give you references of happy customers that they are working with, not just Power 3-ways with Up line Sales Masters. The secret to big success in Networking Businesses is this team building and nurturing, and the Home Based entrepreneurs that are willing to make this commitment to adequate support in training for their teams are few and far between.

Reality #3 – Unrealistic Expectations
So many new business opportunity operators have fallen for the HYPE. They believe the “perfect” scenario or something close to it is going to happen to them. They are so excited, and think as soon as they start talking to people or they get their website up, money is just around the corner. After a week or two reality sets in. Within 30 – 60 days it will hit you … your success is going to take some effort. And in most cases it’s not anything wrong with your opportunity, it’s your lack of skills, focus, and/or effort. Go look at a mirror because the problem AND the solution are looking right back at you. (ouch)

Reality #4 – Lack of Focused Effort
Many new Home Business owners fall victim to the idea that as soon as they start their home business, they can start living the lifestyle of a successful home business operator. This is a business killer for sure.

I remember coaching a young man that enrolled in a high dollar Direct Sales Program who was coming to all of the training calls, and after 2 months he still was not in profits. I asked him how much prospecting he was doing and his reply was that he gets around to it a few days a week because he was living the “life style”. I then asked him if he was already rich, to which he said no, and he was starting to get worried about the fact that no money was coming in yet. Sounds incredible, but this is a true story.

The bottom line is that starting a business, any business takes big effort. It’s like you are starting to roll a huge boulder. You’re going to push at it, pull at it, then figure out how to move it a little, then eventually get it to roll, and once it starts rolling, well it’s not so hard to keep it rolling. That is the same with a Business. It takes great commitment of time and effort to start a Home Business, especially your first. Many of the most successful people in Home Business, or any type of business really, failed several times before they got it right. It took them a while to figure out how to make the boulder roll consistently.

Reality #5 – Lack of Adequate Funding
The costs to get started in a Home Business ranges from less than $ 100 on up to $ 25,000 or more. The key phrase here is “Get Started”. Those are just the entry costs. The reality is that unless you are going to build your business with “Warm Market” (the archaic MLM practice of selling to friends and family, whether they want to be sold to or not), you are going to need consistent funding for advertising and marketing expenses. No business can make it without customers and you have to acquire them to be successful; and that will likely cost some money. In some cases thousands of dollars.

The best prospects to have are targeted prospects, like those you can generate through expensive Pay Per Click Internet Advertising. The higher the sales price of the “products” you are selling, the more money you will need for marketing. Also, the less experience in “Selling” or “People Skills” you have, the more money you will need. Under funding is the #1 reason Businesses fail across the board.

Reality #6 – Lack of Business Knowledge
This is a huge factor in the Home Business failure rate. First, many Network Marketing companies pitch their “System” and how just plugging into this “System” is going make all of this money for you. The part they leave out is that YOU are the most important part of that system. Your sales/people skills is the lubricant for the machine in the system. In fact these skills are the most important part of that “System” and your ability to generate leads is the second most important part.

Keep in mind that most Home Business operators are coming from the 9-5 paycheck on Friday mentality, and not having to learn and do every aspect of running their business. They have to get used to doing work now, and not getting paid now for it, until perhaps much later. And of course they have to make those mistakes that create lessons, important lessons in the climb to success.

If you polled successful Home Business owners, you would find that they invested heavily in their personal development and tactical skills education in order to find success. In most cases these costs dwarf the costs of the initial startup cost in the business.

Reality #7 – Lack of True Commitment to Success.
Most people that drop out of their home businesses do so within the first 90 days. It doesn’t take long before the “Honeymoon” ends and the real work starts. The 9-5 mentality employee is not accustomed to an 80 hour or more work week, the kind of commitment it takes to get a business off the ground. When you are starting something new, giving it a complete focus effort is going to greatly enhance your chances of success while you are learning. In fact if you are doing it right, you will be in a major time compression mode, at least for the first few months.

For so many though, once they see that owning a business takes serious work, many re-consider … after they have invested a handsome amount of money. Many MLM’s know this and try to plug you for your warm market or get you to upgrade to the expensive packages fast, before you are most likely to quit.

Reality #8 – Up Line Support Can Vary Drastically
Big Home Business income earners like myself have figured out that providing Fortune 500 company caliber support and training is the key to success in building a highly leveraged and high income producing organization. However, most Home Business operators have not figured this out, and rely on their company to provide all training and support. This typically leaves some vacuums in the knowledge and wisdom department adding further to the challenge of the new Home Business Operator.

In summary, Home Based Free Enterprise is on the rise, and many Great opportunities continue to immerge. The Internet has made acquiring information about scams and dis-reputable businesses easy to find. There is a very Darwinian process that goes on because of the speed of communications over the Internet.

Don’t believe everything you read on the Internet though. Many posts have been placed there by competitors posing as ex-customers, trying to tear down their competition instead of building their own tower. If you are researching a particular sponsor, watch for patterns, and study testimonials.

And by all means ask for references.

So if you are contemplating starting a new Home Business, or you are already in one trying to figure things out, be sure you account for the 8 realities covered in this article. Are they they only challenges you will have? Absolutely not, but I believe they are the biggest and account for 80% of the failures of not more.

Home Based Free Enterprise is very rewarding, even if just for the education. Success will require that you take personal responsibility for your thoughts and actions. Since most people can’t or never will go borrow or risk hundreds of thousands of dollars to start a traditional business, Home Based Businesses is the only way for the masses to have even a shot at significantly improving the quality of their lives.

Is it worth the effort and risk? You have to decide that for yourself, but to this author, the rewards of success make the climb worth it.