Many people look at internet giants like Amazon and EBay and think online businesses are relatively easy to set up and deliver instant profits. This is not necessarily the case. Starting any business is difficult and requires products and services which people want. An online business is just the same and the business owner must do their research and work hard to achieve success. If you are serious about starting your online business, you must commit fully to your venture and not get obsessed with the get rich quick adverts and stories in the press.
Setting up the business properly takes time and lots of research. Spending time doing market research will confirm or deny whether your products will be popular with customers and likely to sell in amounts that will record profits. Do not dismiss your findings because you like certain products your customers may not. Open a bank account and build a relationship with your bank manager. This may be useful if you require finance. Determine if you need office space and any staff. Source suppliers for your goods and materials and ensure you order manageable stock. There is a lot to do before you even start up, but this is essential if you want your business to run smoothly with no unpleasant surprises along the way.
Even if you do everything right, there is no guarantee you will be successful. Below are five of the main reasons why online businesses fail and how to stop this happening.
- Failure to plan correctly
Prepare a roadmap for your business what are your goals and how do you plan to reach them. A comprehensive and positive business plan is vital, as is a well thought out marketing strategy. Include realistic targets and budgets which you can refer to in order to make informed decisions at every stage. Review it regularly and update it as necessary.
- Your Website
Many online businesses fail because their websites are not fit for purpose. Your website is the shop window for products or services and this is where your potential customers will get their first impression of your business. Make it attractive and user friendly. Viewers browsing the internet will not waste time on sites which are not easily navigable and do not contain quality content. If you are selling products, include full descriptions and photos (including a zoom facility so visitors can see the features of the products clearly). It is worthwhile to employ a professional web designer and SEO professional to design the site to your specifications. They can also help you to promote your website to attract the maximum amount of visitors. There are ways to monitor the amount of traffic through the site and determine the sales : views percentage. Ensure you include your logo and website address on all your business correspondence, vehicles and all advertising media.
- Analyse sales and anticipate changes
This is important to determine which products are popular and which are not. Consider offering unpopular lines as sale items. You cannot do the same things next year as you did today and assume the results will be different. To have a successful business, you must be innovative and constantly moving forward. To stand still is to start on the road to stagnation and failure. Update your website regularly with promotions, ‘sale’ items and new products to keep customers and viewers interested. Email all your customers with the latest company news. Can you afford to offer a small discount or free gift for first time customers?
- Assess everything
You must always be aware of your cash flow, sales conversion rates, expenditure and, most importantly for an online business, your website traffic data. If visitors to your site begin to tail off, find out why. Is your website out of date or lacklustre, are there too few products and services on offer, and is your pricing competitive?
- The personal touch
Set up an email system for customers to contact you and vice versa and respond quickly. There is nothing more frustrating for a customer to have to wait for a response to their queries. Building relationships with your customers and acquiring new ones is just as important with an online business as traditional businesses. Keep in touch with your customers, analyse what they are buying and determine your marketing strategy based on this knowledge. For instance, if you are selling household items, and your wall art is selling well, look for new stock items based on pictures, metal artwork, mirrors and picture frames. Keep one step ahead of your customers’ needs.
Online business often fail because of ineffective marketing strategies and the proactiveness of the owner to keep moving forward and offering new products or services. A unique website offering innovative and practical merchandise will usually pay off. Time spent on planning and market research before you launch your internet business can get you off to a flying start.
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