1. Technology. You may think that spending years learning a skill can transfer into a successful home based business. This may have been the case a few decades ago, however, now with increase in technology, things are different. Most services can be found online, and often for free. The Internet has made things like accounting, consulting, and even legal work harder to charge for.
2. Visibility. Not only is it harder, for customers, to see a small business, it is even harder to see a home based service business. Most likely, you won’t need a location when offering a service. So, it gets difficult to get your name out there. No one may know you’re even there unless you do some heavy marketing and advertising.
3. High operating costs. A service business is unlike supplying a good or creating a product. Services have to spend both time and money traveling, operating at different locations and maintaining their work. This can run up high costs for the business owner. Because they can’t be in multiple places at once, they often lose customers. They also have high transportation costs of traveling back and forth to clients.
4. Professionalism. Another way that service businesses can fail is the lack of professionalism. A customer would rather deal with a business that has proper paper work and acts like a large company, even if they are not. They want someone who dresses and looks the part of someone representing a business that will deal with them in an honest matter and do a good job.
5. Communication. While this may not seem like a big deal when you’ve got so many orders to fill and so little time to do it, but lack of communication will send your customers away faster than anything. I’ve often called service companies, only to consistently get their voicemail. Shortly after, I moved on to the next business. It doesn’t matter how pretty your flyer is or how well built your website is. If you can’t communicate with your customers, they won’t feel the need to communicate with you.