Commencing an online business begins with filling a need and building credibility, but the factors that go into making your online business a huge success don’t stop there. While the barriers for setting up a company are low, the majority of people starting an online business fail largely due to mistakes that seem obvious in hindsight — such as overestimating profits or trying to be too many things to customers from the onset. But there are many more mishaps business owners experience.
To enhance your at success, try and avoid these 12 Major mistakes when starting an online business of any types.
- 1 1. Lack of proper business Planning
- 2 2. Focusing too much on the little stuff.
- 3 3. Not worrying about money.
- 4 4. Undervaluing what you’re selling.
- 5 5. Ignoring customer service.
- 6 6. Giving away too much and getting little or nothing in return.
- 7 7. Underestimating the requirement and drive it takes to succeed.
- 8 8. Not Having a Marketing Plan
- 9 9. Impatience
- 10 10. Overspending
- 11 11. Thinking You Can Do It All Yourself
- 12 12. Solving an Unimportant Problem
1. Lack of proper business Planning
You don’t need to have a formal business plan — but you still need a plan. “People regard the business plan as homework they don’t want. “You don’t need a formal 40-page business plan to successfully plan a business. You need to know who your customers are, what you are selling and what people are willing to pay for your product or service.” Putting together a business plan takes some work, and there’s a chance that you’ll discover that your great business idea isn’t so great after all. Because of this, a small business owner sometimes jumps right in without a plan—and then wonders why things didn’t work out the way he imagined.
2. Focusing too much on the little stuff.
“First, you need to get your business off the ground,” says Steve Tobak, founder of Invisor Consulting, a business strategy firm, and author of Real Leaders Don’t Follow: Being Extraordinary in the Age of the Entrepreneur. While this directive may seem obvious, new business owners can get really bogged down by the details. Don’t do this.
By getting sidetracked focusing on things like how your business cards look or the design of your logo, founders are wasting valuable time. Instead, concentrate on tasks that will help propel your business to the next level.
3. Not worrying about money.
Be optimistic — just not about money. “There’s a very good chance that your company will run out of money before it makes any,” cautions Tobak. “Know how much cash you’ve got to run your business, what your burn rate is and make sure that you have a plan to try to get more before you run out.”
Too often business owners scramble to raise funds when it’s already too late. Instead, founders from the get-go should create a financial plan, detailing milestones and how much money it will take to reach these goals.
4. Undervaluing what you’re selling.
Whether you’re selling a product or service set the price at what it needs to be to make a worthwhile profit.
5. Ignoring customer service.
With so many of our business transactions happening over the Internet, it’s easy to forget that customers are people who are more likely to return to your website if they have a good experience.
“Make sure you have some way of interacting with the people visiting your site,” Tobak says. “Whatever domain — through live chat, survey, email or phone.”
6. Giving away too much and getting little or nothing in return.
Before you’ve established credibility as a seller or an expert, offering something for free can turn into a conversion and long-term customer, especially for those entrepreneurs focused on offering services. However, the cost of free product can add up, so think of offering something useful and intangible in exchange for a customer’s email address, such as a free ebook, recipe, instructions, webinar, guide or checklist, advises Joel Widmer, the founder of Fluxe Digital Marketing, a content-strategy firm.
7. Underestimating the requirement and drive it takes to succeed.
You’ve read a lot about the importance of work/life balance — forget about it. (At least for the first year or two.)
“Don’t worry about time,” Tobak says. “Big ideas do not come when you are trying to manage every minute of your time. They don’t come when you are multitasking. They come when you are focused on one thing.
8. Not Having a Marketing Plan
Your marketing plan goes hand-in-hand with your business plan. After all, you can’t expect to make any money if no one knows about your business. As part of your marketing plan, you’ll identify your ideal customer and figure out the best way to appeal to that customer and differentiate yourself from your competition. And you’ll establish ways to measure your success so you can change course if something isn’t working.
Without a marketing plan, you’re apt to waste time and money on a scattershot approach that doesn’t do much to bring in business.
Many small businesses don’t earn any profit in the first year or two, and it’s common to suffer setbacks after some initial success. Successful business owners are prepared for this and have the patience and financial reserves to keep pressing forward.
Many small business owners get into trouble because they don’t keep their costs under control. It pays to be conservative in your spending until your business has a consistent track record of profits. Watch out for budget-busters such as office or retail space that’s too large or expensive, nonessential employees, and more or fancier equipment than you need. Be wary of taking on debt. As a new business owner, you’ll almost certainly have to sign a personal guarantee on the amounts you borrow, so you’ll remain responsible for paying those debts even if your business fails.
11. Thinking You Can Do It All Yourself
Entrepreneurs tend to be self-reliant individuals, but knowing your limits and learning to delegate tasks are important skills if your startup is going to succeed. Try to focus on the things you’re good at and enjoy doing, and find others who can handle tasks that you dislike or that require specialized knowledge.
Starting a business is exciting, but don’t let yourself rush into things. If you want your business to succeed, take the time to plan and protect yourself. And then be patient and give your business time to grow.
12. Solving an Unimportant Problem
If the problem your business solves is important enough, you wont even have to look for customers. Imagine if you have a cure for a cancer as an example.
Businesses fail all the time because they try to solve a problem nobody really cares about.