You are not in business unless your business is online. This seems to be the trend in today’s context—entrepreneurs around the globe are bringing new businesses to the market which are purely online, with minimal offline activities.
But, of the thousands of people who launch such ventures across different verticals, how many succeed and how many fall by the wayside? And what were the mistakes the ones who fail made or continue to make?
The aim of this article is to allow the entrepreneurs that want to start an online business in the future to avoid making them!
The common and avoidable mistakes are explained below.
Lacking a Solid Business Plan
As the cliché goes, “you don’t plan to fail, but you just fail to plan,” many ventures are founded without a firm business model in place to start with.
Experts point out that one does not have to have a set-in-stone plan running into several pages. But since the business itself is expected to be online and adaptable by nature, one has to put down some framework of the primary objectives.
It could start by saying what the product or service the business plans to make or offer, and the current scenario in the market it is preparing to enter. The top cited reason, why startups fail, is because their idea falls short of filling a market need. Business owners should outline the need for the product or the service and in what manner the business to be started will cater to that need/demand.
Finally, there can be a brief mention of how much money will be needed, when would the company start making profits and how many people may have to be recruited to accomplish the tasks. If you ask around, very few new businesses will be able to spell these out clearly.
Lack of Emotional Attachment to the Project
Any new business is a project, and many try and compare it to a new-born baby. As much as attention and focus need to be directed towards the business, the entrepreneur has to be quite possessive about the project, a kind of emotional attachment and the inner urge to see it beyond the standard ways of looking at a business.
This is being mentioned because a new business goes through many trials and challenges in the early days; arranging to fund could be a monumental task, getting the right people for critical functions and getting the marketing strategy right are all challenges that can affect any individual.
The owner of the online business has to have the determination and perseverance to survive through such turbulent times. The passion will only get them through. Those who do not possess these qualities often fail.
Lack of funds: “It’s About Money Honey”
Again, an oft-repeated cliché. The fact is that when a new business is started, it sucks the maximum amount of funds.
Depending on the kind of business you have planned online, the revenue inflow may start after several months. Have you worked out your full financial needs and the sources they will be raised from and how the funds will be structured?
You can bet many businesses get it wrong. If this is allowed to go out of hand, it can rapidly slide down and take the venture to failure before you know it. Your financial management ought to be perfect. The ones who make the mistake of not taking this seriously will find it hard to succeed.
Lack of customer focus: Mind Your Customer
While the traditional businesses learned the hard way how important it is to keep the customers’ interests the top-most priority, the challenge is even more critical for the online businesses since the customer is unseen and, on many occasions, unheard.
It is essential that you build within your site a platform for your customers to let you know what they feel about your business, your products, and your service. If you are the business owner, you may not know that your product was delivered late to a customer or that they received the wrong product unless you encourage your customers to get back to you and inform you.
Online businesses make this mistake frequently and may realize very late that their customers have switched to other sites to do their transactions.
Failure to Get the Pricing and Discounts Right
This is a very frequently observed blunder by new businesses; either they are misguided by someone, or the business owner himself/herself has these pre-conceived notions of doling out too much to attract the customers and grow the revenue.
While as a strategy per se, this may not be wrong, it ought to be calibrated and executed based on in-depth research and knowing the consequences fully. The mistake businesses often commit is to give away too much too soon and then they are left with nothing to give. As a result, the customer could drop you like a hot brick.
Lack of an HR Strategy
People constitute a vital part of a startup.
But many online businesses make the mistake of either over-hiring, then finding difficult to pay employees their salaries when things get tough, or under-hiring, leaving out critical functions which can have a negative impact on specific processes. It can even end up being the reason for the downfall of the organization.
That’s why it’s crucial for business owners to establish an effective strategy for managing their teams. It’s also necessary for entrepreneurs to follow recommended guidelines for how to pay employees during the startup stage.
There may be many other mistakes that online businesses commit that lead to their failure.
In any eventuality, lessons are learned and some of the mistakes may not be made again. The need is definitely for the businesses to learn from the mistakes of others and not their own. There are enough recorded case studies of why an online business failed, and it takes some effort to learn how to avoid them to embrace success.
As we’ve seen throughout this article when starting an online business, there are several things you can do and several ways to make it work.
- Lack of a Solid Business Plan
- Lack of Emotional Attachment to the Project
- Lack of funds
- Lack of customer focus
- Failure to Get the Pricing and Discounts Right
- Lack of an HR Strategy
If you take the time to focus on avoiding these six critical pitfalls that can break your online business from the start you’re already half the way to build a successful venture!
Guest contribution by Sophie Ross
Sophie is a marketing specialist at Security Gladiators. A writer by day and a reader by night, she is specialized in tech and cybersecurity. When she is not behind the screen, Sophie can be found playing with her dog.
Now that you know what mistakes to avoid, do you need some ideas to get started? Below a list of 12 ideas that require little investment and carry a high profit-margin:
- Become a blogger
- Become an online instructor
- Become a professional photographer
- Become a ghostwriter
- Become a Chatbots maker
- Become an affiliate marketer
- Become a career coach, resume writer or LinkedIn profile writer
- Become a business development contractor
- Become an infopreneur
- Become a websites flipper
- Become an SEO consultant
- Become a contractor headhunter
Do you still need more ideas? Below a list of 26 ideas!
- 1. Affiliate Marketing
- 2. Infoproducts
- 3. Email marketing
- 4. Google AdSense
- 5. Consulting
- 6. Branded stories
- 7. Paid reviews
- 8. Banner Ads
- 9. Sponsored Blog Posts
- 10. Members Only Content
- 11. Paid Business Directory
- 12. Become a Coach
- 13. Accept Donations
- 14. Charge For ‘Premium’ Content
- 15. Sell Your Blog
- 16. Build your SaaS
- 17. Speaking Gigs
- 18. Create & Sell Your Product
- 19. Write Tutorials & Guides
- 20. Live Workshops
- 21. Find Sponsors For An Event
- 22. Generate ‘leads’ for other companies
- 23. Create a job board
- 24. Advertise pages
- 25. Host paid webinars
- 26. Writing Gigs
How to get started with your business?
- What Is a Business Model? 26 Successful Types of Business Models You Need to Know
- What Is The Best Business Model For A Small Business?
- What Is a Business Model Canvas? Business Model Canvas Explained
- Business Model Tools for Small Businesses and Startups
- What Is a Value Proposition? Value Proposition Canvas Explained
- What Is a Lean Startup Canvas? Lean Startup Canvas Explained
- What Is the Minimum Viable Product? Why Use the Exceptional Viable Product Instead
- How To Build A Business Model Based On The Market Leader Weakness
- The Marketing Lessons Learned from Rand Fishkin