Why Do Most People Fail at Online Business?
The sad reality is that most businesses linger on at a hobby level for a few months or years before petering out. Relatively few make it to a level of success that provides a full time income.
I’ve watched, consulted for and worked with many people in the online business world, starting back in 1991 when I sold my first piece of software via the old bulletin board system, an early precursor to the internet. Today I’m a full time online entrepreneur.
Here are some of the most common themes I see in failing online businesses:
1. Too much focus on the product or service – New business people spend a lot of time thinking about and developing their product or service, while they spend relatively little time thinking about what their market niche, business model is or how to market their product. Yet niches, business models and promotions are more important to success than the product.
2. Lack of persistence – A large number of people get started, create a web site and then quickly lose interest when their new site does not instantly generate thousands of dollars each month. The hard truth is that it takes time to build an audience, and patience to build a solid foundation for your business. Its not one large thing that suddenly propels a site to success, but often dozens or hundreds of small actions you take over months or years that add up to create a significant profit.
3. No concept of online marketing – In the crowded internet of today, it is hard to get someone’s attention among several billion web pages, much less keep someone’s attention for more than about 15 seconds. Online marketing, copy writing and building an audience is not the same as it is traditional media. I’ve watched clients agonize over fonts and images, but spend zero time on search engine optimization, copy writing, audience building, email list management and other critical online skills.
4. Inability to manage growth – When success does come to an internet business it often comes in large waves. However, the first Tsunami of traffic and orders will frequently wipe out the business and its owner in the process. The success they worked so hard to create becomes a noose around their neck as they are unprepared to hire people or buy equipment and insist on continuing to do everything themselves. A good friend of mine has been stuck in a cycle like this for over a year. Rather than restructuring his business to outsource as much work as possible, he continues to dig a deeper hole for himself.
So if you want to build a solid foundation for your new online business, carefully consider your market niche, your business model, how long you’re willing to stay the course, your online marketing plan and how you will manage growth when it does come. With the right systems in place, many of these issues can be mitigated at the startup of a new business, rather than waiting for them to become a crisis.