Why Most Businesses with Low Start Up Costs Fail

Thousands of people in America start their own home based business each and every day.

This includes many different types of businesses such as network marketing, eBay, blogging, consulting, coaching, virtual assistant, babysitting, pet sitting and countless other things.

For many people, it’s the American dream to be your own boss.

After all, who wouldn’t want to work from home, sleep in, make your own schedule, not have a commute, and have more flexibility?

For many others, being your own boss, is the only viable option.

Let’s face it, good jobs are hard to find and harder to keep.

Contrary to what most people will tell you, the economy still sucks.

Most people are living day to day, let alone paycheck to paycheck.

Most people have tons of debt and no savings.

Most people are just one or two paydays away from bankruptcy.

Even worse, many people who do have a job are underemployed.

That means they make less than they should be making.

For some people, starting their own business is their only chance to have a good life and create financial success.

Starting your own home based business can be very exciting.

The possibilities are endless…

It sounds so appealing.

The laptop lifestyle.

Work from home.

Time freedom.

My wife and I are very blessed that we can do this.

But it has been a LONG and HARD journey.

Knowing what I know now, I’m glad I made the journey, but it took me about 5 times longer than I thought it would.

Here’s the reality.

Most homes businesses don’t survive.

Hell, most traditional businesses don’t survive.

If I was a betting man, I’d bet at least 90% of all home businesses don’t survive for longer than a year.

Why do so many home businesses fail?

There are several reasons.

First off, building a successful business of any kind is hard.

Just ask any entrepreneur.

It takes tons of hard work, a good plan, focus, and even a little bit of luck to succeed.

Secondly, home businesses are very different from a traditional business.

With a traditional business, the entrepreneur typically has LARGE AMOUNTS of money invested.

They have skin in the game.

As a result, they will do everything and anything to make the business work.

Even if it means working 100 hours a week, not taking days off, and not taking vacations.

Not so with a home business.

We tend to attract a different type of person.

We tend to attract people with little money, false expectations, and a lack of commitment.

We tend to attract people who want to dabble or try something.

I’m not saying these people aren’t good people.

They are good people.

They’re just different.

They aren’t as committed or serious to their business’s success.

When you have tens of thousands of dollars invested in your business, you look at your business differently than someone who spent $50 to start a business.

Make sense?

I don’t care if the business is network marketing, an eBay or ETSY business, a blog or anything else.

With no money invested, or very little money invested, you will not treat the business like your life depends upon it.

You will put in on the back burner when something comes up.

It will be easy to quit.

Nothing ventured, nothing gained.

No skin in the game makes it easy to quit!

And that’s why most home businesses fail, regardless of the industry.

It’s easy to quit when you only have a couple hundred dollars invested.

It’s hard to quit when you’ve invested your life savings.

It’s hard to quit when you have no other options.

Remember that.

And here’s my simple advice to you.

Treat your little rinky-dink home business like you do have a million dollars invested in it.

That’s the mindset you need to have if you want to succeed.


Act as if your life savings is invested in your home business.

Act as if you have no other option.

No back up plan…

With that mindset, I can almost assure you that you will find a way or make one.


Mindset folks.

Get your thinking right.

Nothing ventured, nothing gained.

The greater the risk the greater the reward.

The more money invested to start a business, the more seriously you take it.

People don’t spend a million dollars for a franchise and quit in 90 days because they aren’t making money!

I guarantee it.

They have a minimum five-year plan.

They know it will take several years just to break even and get their money back.

Just because a home-based business is inexpensive to start doesn’t mean it can’t outperform a traditional business.

It can.

Many do.

With such a low monthly overhead it’s easy to be profitable.

But it’s the winning mindset that is missing in most home businesses.

The home business owners typically aren’t as committed or as serious as traditional business owners.

What do you think?

Leave a comment below to share your thoughts.

I look forward to hearing from you.  Have a great day.

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2 thoughts on “Why Most Businesses with Low Start Up Costs Fail

  1. You are quite correct in this post Chuck.

    For me, there is really no quitting my home-based business; and it wasn’t because I have a lot invested, but it is because I really don’t have a back-up plan.

    How was I able?

    I decided to move to Puerto Rico where Spanish is the primary language, and I am a person that knows maybe 10-15 words in Spanish. I would probably have a very difficult time trying to find a job here, so I have to make the home-based business work.

    I may not have a lot of money invested, but I do have my life invested, and it is working, because it has to, or I would be up a creek with no paddle.

    Great post sir!

    • Sometimes not having a back up plan is the best way to go.

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