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Average Life Span of a Business...

post #1 of 18
Thread Starter 
I've noticed many businesses are gone after a couple years...I'm guessing because they were not capitalized enough to get through the lean business building times.

Or maybe many natural baby store mamas lose interest once their kiddos start potty learning or wean. :

I want to build a business for the long term. Something my homeschooled kids can help run as they get older. It's taking alot of time and research, experimentation, etc.

Anybody care to share thoughts/ideas on setting up for the long haul to success?
post #2 of 18
You are absolutely right about businesses, especially online businesses, only hanging out for a couple of years.

From talking to several of the sellers/buyers I know that there are a few reasons:

1. Not interested - children getting older; not interested in products as much anymore; lack of time to manage it.

2. It was a hobby - no longer a hobby. Or they used to enjoy doing it, but started doing it for money and stopped enjoying it.

3. As you stated - poor planning, wrong product focus, financial hiccups

4. Personal family issues.

5. Or with me - Got an offer to sell, tired of maintaining inventory and wanted a new challenge (3 business sells later).

For the long haul - make sure you love what you do and sell, be realistic about growth, learn how to promote your services and/or products, make a FINANCIAL INVESTMENT from the onset, keep a decent level of inventory so you aren't always on backorder and have to make quick orders that cost you high money in shipping just to fulfill orders, and make an exit plan for when you may very well end up sick of it.

So many here will have great suggestions. There are also a few that offer business promotion/planning services.
post #3 of 18
The first 3-5 years is when a lot of new businesses tank. The easy word-of-mouth and first flush customers are gone and you have to start working hard to maintain and increase your customer base. Expenses start to really kick in, especially as a business starts to feel the need to expand. Growing too fast is a common mistake.

I've seen a lot of success with companies that create a sense of community beyond just the buy-and-sell nature of the business. Outreach, involvement in the local and online community, creating activities that both enrich customers' lives and pull them in the door, newsletters, etc.

Customer service is another BIG issue. All it takes is one bad day where a store owner takes out their mood on a customer and word flies. It's also important to strike that balance between being friendly and bringing your home life to work with you. No one wants to listen to a 30-minute story about your dog's emergency surgery, you know? (Pulling from painful personal experience. It was a cool store, but I never went back.)

More thoughts, but kiddos call. Will try to get back to this thread. Cool discussion topic!
post #4 of 18
For me, doing web design, I think it's a bit different. I have very few costs, all the programs I have (Photoshop CS2, Dreamweaver, etc) and my computer I bought for a hobby and fun, and I teach myself everything I need and want myself or off the internet, so it's very work at home friendly. My daughter already knows photoshop well from just playing with it and wants to learn coding. I don't know if it that's what she wants to do when she's grown up, but it's a good skill set to have! It's not easy to get into, you have to either take classes or teach yourself design and coding, which take years, but it's definitely doable.
post #5 of 18
I think most wahm's think that an online business is easy money, and it is really hard and taxing on family life, so they opt out. My best advice is HIRE people to do the things you hate. An keep hiring people/building inventory over taking a profit.
post #6 of 18
Thread Starter 
Thanks for the responses!

My husband runs a graphic/print design and screenprinting business from home. I have toyed with the idea of learning web design to compliment the business, but I'm not sure if I have the patience for it. He doesn't know anything about web design either. I'm trying to find a place for me in our business, but since I'm trapped in the house most of the time and he's out meeting people and clients - I find I just don't know what is going on and I'm pretty left out. He wishes I could get more involved though, and his suggestions are me doing cold calling to try to get more customers...not my thing at all and hard to do with your clingy 18 mo in your lap!

I have tried several offshoots to this business, screenprinting advocacy shirts, printing decorative children's shirts, etc since it seems logical and sensible to make use of the equipment we already have for my own business. But I don't know...it's just not clicking for me because it still requires too much participation from him. I did the advocacy shirts for about 18 months and then the kids shirts stocking on and off since last spring. I'm tired of being flaky about it. I want to find something that works for me and STICK WITH IT!!
post #7 of 18
Most small businesses fail, it's just a fact. If you can make it past (can't remember the exact number) 3 or 5 years, then you have a better chance of making it.

For me, I think I'll run my business for about 4-5 years, then sell it and retire. (Hope to sell it for millions.) My husband will probably still have to work though, we need to have $10 million to be able to retire and I don't think I'll be abl to sell it for that, hehe. We were just discussing all this this weekend.
post #8 of 18
Oh, and my business is baby-oriented, and I get passionately involved in new hobbies every few years, so I don't think I'll be able to run the business with much passion once my family is all grown up. I'll be on to the next endeavor.
post #9 of 18
When I was in grad school, I has a small biz making jewelry. My last year there, I brought in almost as much $$$ as I got in grad school stipend. [note to self: not a good idea, cause it interfered with my studies!]

Then I got a very good job offer, with health insurance, 401K plan, stock options, etc. And a nice salary! And even in the field I had studied! I took the job, canceled the tax number, and shelved the business. I still have lots of beads and sterling silver wire here, cause I still think about making jewelry, and I can't pass up a bead bargain. Maybe I should have sold it, though at the time I did not have any possible buyers in mind. I really want to be a person who makes jewelry. But my heart is not in it right now.

Quilting/spinning/weaving/spinning is my real love, not metal work. And I am doing web design right now, which makes money without holding inventory. :
post #10 of 18
I've seen a lot of businesses shut down when the second child comes along.

So far we are hanging in there, but we only adopted dd a month ago. But if I can run the business through jetlag, I can do it long term. Plus I trained my sister in while we were in China, so she can fill orders for me if I was ever totally overwhelmed.

Hmm... I'd love to learn more about how to sell my biz for a million someday. I have seen many people just close their businesses down when I felt like they really could have sold it instead. I guess some of them are planning on opening back up when their kids are older...
post #11 of 18
I had another business that was the diapering/sling/toy type stuff. I closed it down for good last year. My heart wasn't in it anymore since my family was no longer needing those same types of things.

The pads had been part of them until fall 05 when I moved them to their own site. Since they it's grown so much. I have learned when to cut back so I don't get behind.

I started after I"d had all my kids. My youngest is going into K in the fall which will give me more time to do the business.

I don't foresee myself stopping anytime soon.
post #12 of 18
Knowing how busy you are with the kids Marisa, I recommend you finding a way to make a more passive income, instead of something you have to constantly work. You are a great designer and I think you could take that and apply it to a cafepress shop and make a killing. I have another close friend who you also know who has a cafe press shop and is bringing in close to $900 a month from her cafe press sales. You ask how does one do that? Truth be told it is designs that are more mainstream. Fit into a wider variety of families as well she gets income from affiliate sales at cafepress. I have another friend who has only one design on CP and she get a check for $45- $75 a month. It is an excellent passive income. I get checks every now and again but my designs appeal to a very select group of folks. I am sure if I made some more mainstream designs I could make more money...hmmmmm wheels are turning....I digress.

Good luck whatever you decide.
post #13 of 18
Thread Starter 
I do make some money here and there from my old Cafepress - but I guess it's just hard for me to believe that people really buy those shirts; mostly because I have never seen one in person to tell what the quality really is. Maybe I should think about it some more.

I would prefer my income to be more passive (who wouldn't? )and I tried to work on some content websites - but writing content for me is incredibly time consuming. And you have to have ALOT of it to get anywhere.

It will be tough finding much of anything that I can do with four homeschooled kids under the age of 6 so we'll see.
post #14 of 18
Thread Starter 
Quote:
Originally Posted by CarrieMF View Post

The pads had been part of them until fall 05 when I moved them to their own site. Since they it's grown so much. I have learned when to cut back so I don't get behind.

I started after I"d had all my kids. My youngest is going into K in the fall which will give me more time to do the business.
Congrats on finding success with a good niche product!
post #15 of 18
Thread Starter 
Quote:
Originally Posted by HipGal View Post
we only adopted dd a month ago.
Aww, how wonderful!!

Your site has a very comprehensive inventory! I'm guessing some of your products are drop ship?
post #16 of 18
I think for a lot of people it's just plain old burnout that gets you after a while. It's a lot of work to get a business up and going. Then you finally get to a place where you are making a living and realize that means MORE work, not less. It's a lot of hours in and much of the time people just decide it's not worth the effort for the return.
post #17 of 18
marisa good luck! I have only been a WAHM mom for less than a year but I earn money from affiliates and ads on my site and from writing articles, so I don't know if you call what I do on my site a business.
post #18 of 18
I read a study that showed most small businesses that fail do so because of a lack of capital. Also, small businesses that have employees are less likely to fail than those that don't.

So, with this information in mind, I recommend being very wise when pricing your products and putting as much money back into the business as possible.

Also, while the study didn't talk about outsourcing -- as opposed to hiring employees -- I think outsourcing will have the same effect as having employees. You are less likely to get burned out if you are not trying to do it all yourself.
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