Before you shout "God forbid" the next time somebody talks about business failure, read this article to the end.
The biggest question every entrepreneur should ask themselves is "why do businesses fail?". But just so you can get a glimpse of where this conversation is heading, Did you know 22% of eCommerce businesses fail in their first year?
That is to say 1 out of every 5 businesses online might likely not see December 31st or January 1st of a new year.
Does this scare you?
Especially if you're new to this "online business" thing and you're looking to hit the home run. Let's be honest the chances of you succeeding are very slim.
Here are 10 reasons why you might likely fail as an online business owner and how to avoid them.
1. Lack of Clarity:
Quick question, why do you want to start a business in the first place? Most Online Entrepreneurs can't answer this simple but crucial question. If you're planning to start a business just for quick cash, then, online business is not for you. It takes clarity to succeed Online. You have to be clear about what product or services you want to sell online, who you want to sell to, how you want to sell to this person and where you want to sell your product or services.
2. Lack of a solid Business plan:
For which of you, intending to build a tower, sitteth not down first, and counteth the cost, whether he have sufficient to finish it? (Luke 14:29).
Jesus was so wise he was able to acknowledge the fact that nothing works without a Solid plan. Even the creation of this world was a master plan. Why are you going to start a business without a plan?
A study was carried out and it was discovered that companies that plan grow 30% faster than those that don’t plan.
This study found that, although many businesses can look successful without planning, businesses with a plan grew faster and were more successful than those that didn’t plan.
Not planning your business is like going to write an exam you didn't read or prepare for. The end is always failure.
3. Bad Business Structure:
Most people trying to start an online business don't fully understand how to structure their business for success. Setting up a successful business requires strategic segmentation of processes and activities. When setting up a business structure online, you want to make plans on how to acquire customers, how to create a good relationship with your customers, how to sell them your products or services, etc.
4. Lack of Skills:
Building a business needs skills. You need skills in Marketing and Advertising to be able to attract customers, you need sales and closing Skills to be able to convert leads from visitors to High paying customers. You need customer service/ relationship skills cause it's one thing to attract Customers, it's another thing to retain them. There are so many skills you need to succeed as an Entrepreneur, especially as one who wants to do business online.
5. Poor and careless management system:
90% of the reasons why businesses fail are because of bad management. A bad Management system is a cancer that one's it eats deep into your business, it because incurable. Even if your online business is still struggling, even if you have not started making millions, it is critical to pay keen attention to how your business is running daily.
Examples of Bad Management systems to avoid.
Ambiguous goals and objectives: The enemy of productivity is confusion. Nothing sponsors confusion like not being clear about what goals and objectives you want to achieve in your business. Your daily activities must be driven by your goals and objectives.
Lack of Accountability and Transparency: Nothing kills a business like a lack of transparency and accountability. Even if it's a one-person business, you want to be accountable for your finances, your expenses, etc, and everything you do. Remember if you treat your business like a billion-dollar company, you'll have a billion-dollar company in no time. But if you treat your business like trash, it will soon become trash.
Poor time Management: Time is the currency of life. If you don't value time, you don't value life. Wasting time doing irrelevant things is the fastest way to destroy your business. Avoid time-wasting activities and focus on the key activities your business needs to scale.
6. Lack of financial resources:
Let's face it, every business needs money. Having access to adequate funding and financial resources is one of the reasons why the tech industry is booming!
Sometimes, it's not all about brilliant business ideas and strategy, do you have access to the required financial resources to turn your ideas into reality?
Secondly, don't forget that there is marketing and advertising that you'll have to spend on to get customers. We cannot underplay the role of money in the business including online business.
Please don't listen to all these online gurus who told you they started their online business with nothing. Starting an online business is not free.
7. Bad Marketing and Advertising:
It's so unfortunate that many Online Businesses don't understand that this online business is a game. The person who can Market and advertise his/her product the most wins the game. If you fail to market your product/services shamelessly, you will go hungry.
Advertise. Spend the majority of your money and time promoting your products/ services. One of the beauties of the Internet is that it allows us the opportunity to reach as many people as possible. So make your business reach as many people as possible.
8. No/Bad Website:
Digital Marketing has changed. The idea that you can sell using social media DM's and WhatsApp is one of the fastest ways to the ground. Most online businesses fail because they don't have a website.
Your website is your online shop, it should be well-designed and optimized. Guess what? Building a Website now has become very easy. With Kitcart you can set up a fully functional website in 5 minutes and you can enjoy a 7-day free trial once you sign up below.
It's no surprise that people are doing the same business you want to start online. So it's not going to be easy. Business is war. It's all about domination. So if you're not winning the customers, one else is. That's why you have to top up your game and be serious with your business.
10. Bad Branding and Positioning:
Proper branding and positioning are one of the strategies Old brands use to destroy new businesses before they even land their foot on the internet.
If a business doesn't have a clear and compelling reason for customers to choose them over competitors, it will be difficult to attract and retain customers.
To be honest with you, the chances that your business will succeed as a newbie are very slim. I'm not saying that so you should be scared, I am saying so that you will be prepared that beyond the millions people are making online, beyond the flashy things you see, and the sweet lies online gurus tell you. E-commerce deserves 100% attention and commitment.
The big question is do you have what it takes to succeed online?
If you found this article helpful, don't forget to share, like, and comment.