While most people dream of starting an online business, not a lot of them have what it takes to succeed. Even those who take the leap of faith may end up failing. Sometimes the reason could be beyond your control and there is very little you could do about it. Most businesses fail because of poor planning from the start. It doesn’t make any practical sense to start an online business just because it is trending. We have listed some of the common reasons why most online businesses fail and how you can avoid the pitfall.
This perhaps the main culprit when it comes to the fall of most online businesses. An entrepreneur might have grand ambitions but they fail in the execution part because there was no proper planning in the first place. Planning involves carrying out research to validate the feasibility of the business idea. You should analyze the competition and determine how much you will need in terms of marketing and logistics to get the customers. There is a chance you will run out of money and ideas quickly if you don’t have a plan to grow and sustain the business.
Making the wrong decisions could also lead to the downfall of your online business. You should never make a big decision based on emotions or an affinity for a particular service. The labor of love could be the reason why the company is not growing. When it comes to making decisions involving the business, it is always important to do research first. If you’re comparing big commerce enterprise vs Shopify plus, you can start by analyzing their pros and cons, budget implications and the impact that they will have on the business. It is only then that you can make a decision.
This is referred to as the “Shiny Object Syndrome”. It comes as a result of not having a marketing plan in place. Trying out everything new that comes out could be disastrous for your online business especially when operating on a tight budget. You should stick to your plan and only make the necessary adjustments if it is absolutely necessary. If it is about testing, you should only try out one thing at a time.
Doing It All on Your Own
In order to be truly successful, you will need the help of other people. Some businesses fail simply because the entrepreneur is trying to do everything. It might make sense when starting out but you’re better off hiring the people to fulfill different roles as the business grows. You should hire professionals so that you can concentrate on running the business.
Poor Cashflow Management
An online business will require cash most of the time to stay operational. If you own an E-commerce website, you will be required to pay suppliers even before the money from the purchases can reflect. If you don’t have a proper cash flow management system in place, it could take weeks before the customers get what they ordered. There should be enough money to take care of things like chargebacks and refunds. There are drop shipping businesses that have collapsed since they couldn’t manage the orders or did not have the cash to issue out refunds in time.
Poor Website Design
Your website is everything when it comes to selling online. You have only a few seconds to impress before the potential customer moves on to something better. As a result, you need to make sure that the website is loading fast. Google recommends 2 seconds or less when it comes to loading time. You also want to make sure the website is mobile-friendly since a lot of people are using their cell phones to access the internet.
SEO is the Holy Grail when it comes to online marketing. You are significantly reducing your chances of succeeding if you don’t have an SEO strategy in place. Even if you have a sizable budget for pay-per-click advertising, organic results tend to be seen as more legitimate in the eyes of the customer. You don’t have to spend a lot of money on advertising when you’re ranking on the first page of Google.
Lack of Commitment
Some people might be enthusiastic when starting an online business but lack the drive and commitment to see it through. They are easily discouraged when faced with challenges. The goals and objectives of an online business are measurable and you can know which efforts are working. It will require extra commitment compared to brick and mortar businesses as a small mistake could be detrimental to your whole operations.
To sum it up, success will not happen overnight unless you’re extremely lucky. An entrepreneur needs to consistently and constantly improve in order to have a successful online business. Make it a habit to learn from your mistakes.
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