Why Most People Never Become Millionaire Business Owners

Failure doesn’t just happen. There is always a reason. I would say 10-20% of failures are beyond the control of the business owner.

A farmer plants field of potatoes, looks after them and...then potato blight strikes and he loses the entire crop.

A woman sets up a cafe using borrowed money from the bank. She buys equipment, employs people and advertises both locally and regionally. Then a big supermarket opens offering what she is offering at half price and with additional ongoing special offers.

There are two ways to dramatically reduce the risk from circumstances beyond your control.

1. Work out the worst possible scenario - ask yourself if you would be okay if this occurred. If not, consider taking a smaller step. If so, go right ahead.

2. Have alternative plan (s) - If the worst thing happened, what other avenues would attract an equivalent amount of money using the resources left? What could you do? What else? Think.

By doing these two things before you start, you reduce the chances of anything beyond your control affecting you. It won’t stop the dire circumstances occurring, but by doing this you will be in a position to know what do as soon as anything should happen

So that is the 20% possibility what about the other 80%? Well these are usually the result of one or both of these things...

1. Overestimating profits

2. Underestimating costs

To fail in business, you MUST make a loss. That is the only way to fail in business. The only way to make a loss is to have higher outgoings (costs) than incoming (profitable turnover).

This may seem obvious, but it is the overestimation of profits and the underestimating of costs that makes this happen. The reason they make a loss when they set out to make a profit is because of their mistakes in working out profits and cost.

This is one area you need to really get to grips with. It is the number one reason for all business failures. The business owner thinks they’re going to make a profit, so they invest every penny they can muster into the venture and then... when the money is counted, they’ve made a loss.

Sometimes they go bust. Sometimes they get given another chance. Sometimes they realize their mistake. Sometimes they don’t... and continue... and go bust.

The business owners that underestimate profits and overestimate costs are the ones that never make a loss or... are the ones who have previously made this mistake.

Now, you can overcompensate. You can under-underestimate profits and over-overestimate costs. Do this and you’ll never get into business at all. The most successful people are those who have previously overestimated sales and underestimated costs and then learned from their mistake ( By going bankrupt or nearly going bankrupt ) but not overcompensated.

Overcompensation as a result of such a mistake is the biggest reason people who have failed in business don’t start another one. They do the sums of their over pessimistic estimations and they never add up so they never do anything.

And not realizing this mistake is the biggest reason people go bankrupt. They do the sums of their over optimistic estimations and they proceed to shovel money down a bottomless pit.

The people who realize their mistake but do not overcompensate - win.

So... be ruthless in this area. Work out your exact cost of sales, work out your exact profit per item/s, work out your exact running costs and overheads, work out the exact figure you will need to draw to live, be slightly pessimistic about your estimations of the sales you’ll get, set goals to sell much more (and more) than that and you’ll build a profitable business.

Here’s a tip: Work out the minimum number of sales you’ll need to cover all your costs and ask yourself if you could sell that many. If the answer is: "Easy" then go for it. If the answer is: "It’ll be a tall order." Then either increase your profit per item/s (and reduce your costs) so that the answer becomes "Easy" or go back to the drawing board.

To find out more go to www.vicbotterillshows.greatestbusinessideas.com

Millionaire Stealth Secrets
How to become a millionaire.