It’s no secret that 44% of new businesses in the real world close their doors within the first two years of opening them. In the first four years, 66% of small businesses fail. In the online world, the numbers are worse. Everything is faster on the internet and that includes the deterioration of new businesses. 95% of online businesses fail and they fail in a matter of months.
Disheartening? It doesn’t have to be. You can learn from other people’s mistakes. Other people’s successes in the online world drove you to want to start your online business. Their failures can help you.
Who wouldn’t prefer to avoid rush hour traffic in the morning on the way to the office and in the evening on the way home from the office? And everybody hates their boss. Even if you like your boss, you prefer not to have a boss at all. That’s the allure of the internet. Making money in your pajamas and answering to yourself.
It’s also one of the biggest reasons people fail in online business. They have to answer to themselves. When you first venture into being your own boss, it’s extremely tempting to slack off on your work hours. It’s even more tempting if you work from home. You have the television, video games, the refrigerator, the children and the spouse all to distract you. Being your own boss takes more discipline than having a job where you take orders from someone else. The lack of discipline in most online business owners causes them to relax their efforts ten times more than they would if they had a boss to answer to. The reality is that in some aspects, being your own boss can be more demanding than a job. Your businesses success and failure hinges on how much work you put into it.
Many online businesses fail because the owners dive into the venture with the wrong mindset. They try to take brick-and-mortar concepts and apply them to the internet. The internet is a different monster than a brick-and-mortar retail shop. With a brick-and-mortar retail shop, you start with a great location and you build a beautiful store, a little advertising and the customers come. Online business owners put all kinds of money into building beautiful websites and then sit back and wait for the business to come to them.
It doesn’t work like the late night infomercials tell you that it does. That brick-and-mortar retail store competes with only the other four or five retail stores in that plaza. You build your beautiful site and it competes with millions of other websites. Now, how are people supposed to find your needle in that haystack? Search engine optimization would be a good start. Create a site that the search engines love. Hopefully, your site shows up at the top of the search engine results (this is prime real estate on the internet). But in order to do that, you have to plan accordingly.
Lack of planning kills any business. It’s extremely detrimental to internet businesses. For an internet business to succeed, there has to a comprehensive plan that includes website design, the focus of your business, marketing strategies, fulfillment strategies, and strategies to handle customer complaints. Most new internet businesses have no focus. The owner just knows that he wants to start a business online. He has some idea in his head that he wants to sell video games, for example. Unfortunately, he has not created a plan to differentiate himself from the other million and one websites that sell video games. He becomes a speck in the dust.
In order to properly plan, the online business owner has to have knowledge of every aspect of his business, marketing strategies others in the field are employing with success, and the knowledge of internet marketing. Most online businesses fail because the owner jumps into the business powered by his dreams of financial success or freedom from a traditional job. They fail to take the time to learn the intricacies and strategies of internet marketing and what it takes to succeed in an online business.
An online business needs three factors in order to achieve success. The business has to generate traffic, keep constant contact with customer and close the sale. Even brick-and-mortar businesses can’t survive if they have no customers. Online businesses are the same way. If no one visits your website, then you can’t make any money. Many new online business owners, their first time starting a business online, expect that simply having their website online will generate business. It doesn’t. They’ve gone several months before realizing that they have to generate traffic on their own. By then, it’s too late for them to learn how to use internet marketing to their advantage. They’ve already spent tons of money launching the business, warehousing products, and shelling out for expenses.
Some people have the luck of hiring a website design firm who has explained to their customer that they will need site optimization, and probably offered traffic generation services. It’s great to get traffic. But you’re going to be throwing your hands up in the air in surrender when you have a thousand customers a day to your site and still aren’t making any money. That’s because you’ve failed to grab hold of this prospect and not let him walk out of the door. Online businesses have an advantage over brick-and-mortar businesses. It’s easier for an online business to capture email addresses and information about customers than it is for brick-and-mortar business. Unfortunately, some online business owners actually fail to do this. Simply capturing email addresses gives you the opportunity to invite this prospect back to your site. The job that people say they despise the most is sales jobs. Even though we are constantly selling ourselves, people are so fearful of sales. Too many business owners take this same mentality into their online business. You can’t be afraid to ask for the sale. If you never ask for the sale, how do you know if you will every get it or not?
Finally, the greatest tragedy of all online business failures is neglecting the use of the tracking capabilities of the internet. The internet is such an amazing tool for tracking and measuring statistics. It’s unbelievable how many online business owners fail to track and measure their efforts. This probably is a byproduct of improper planning. But even planning without tracking and measuring results is pointless. Because of the lack of tracking, you could end up spending more money into advertising efforts that aren’t working and less time and money on efforts that do work.
Your online business doesn’t have to fail. Educating yourself on internet marketing and operating and online business will build your self-assurance. Constructing a plan for your business will help you develop the discipline you need to keep your business moving in the right direction. Don’t allow your online business to fail when it’s so easy to get the tools to succeed.