5 Ways to avoid being a failure statistic when starting an online business
If you are planning to start a business, you probably have heard the crazy statistics about the number of small businesses that will never see their first birthday. While in the majority of cases, these statistics are about brick and mortar businesses, they also apply to online businesses operating from a small business website. There are a number of reasons why many small businesses fail, including online ones. You can enhance your chances by avoiding the following mistakes.
- Overlooking the need for a business plan
Many people imagine some detailed white paper when they hear the words “business plan”. In actual fact, you don’t really need to have a formal plan written by some expensive expert. However, you still need to have a plan, even if you try to do all it by yourself. However, if you do not have any experience, it is better to ask a person who has already done this kind of task before.
Overlooking a business plan is more like starting a journey but not knowing where exactly you want to go, how you will get there, and what you will do once you are there. There is still a chance that everything will be fine with you, but the chances to get problems are much higher. Your business plan will help you to decide the resources you will need to do basic things that a modern small business needs such as to create business website, get the computer equipment, and training if you need it.
- Not considering where cash will come from
Even though an online business may not require a large capital investment, you are still going to have to consider issues linked to cash. It’s a business after all and you are likely to need to spend some money before you can expect to make more money.
The business on its own may not need a lot of cash but while you work on it and set it off the ground, your own bills as the owner of the business will still need to be paid. You will not be able to do everything on your own. You may need, for instance, to pay for skills to create a business website, logistic, etc.
Create a financial plan and have a budget with projections of your income and expenses. In your financial plan, you will need to determine your objectives and what exactly you are going to need to achieve them. It will also help you decide where you can serve such as using a cheap business website builder and the templates they offer.
- Being desperate to attract customers
When starting a small online business, it is easy to be intimidated by competition into thinking that you should shortchange yourself when selling your products. Charging prices that don’t allow you to make a profit just to attract customers is counterproductive as you will eventually have to bring them up at some stage to the dismay of your customers.
Instead of attempting to win the competition by reducing your price, rather look for ways of making your products unique. This will involve investigating both the market and your clients to determine what it is they are looking for. If your unique selling point is attractive enough, you may even discover that you can sell your products at a premium.
- Trying to be everything
It is important to be clear about what it is that you are selling. This will make you known for one thing. Attempting to do gardening, accounting, and selling airline tickets in the same company may spread you too thin to be able to give your clients in each area the kind of attention they need. It also makes you look like a chancer trying to grab everything.
The same applies to doing things in the business; if you try to be the customer service consultant, the business website builder, the accountant, and social media account manager, you will spread yourself too thin to do any of the tasks with enough attention.
- Not learning from mistakes
You will make mistakes in the beginning even if you follow the best business advice available. The reason behind this is that no two businesses are the same even if they selling the same thing.
Both your own mistakes and those of others can teach you valuable lessons. Hence, it is important to keep yourself informed about what is happening in the area where you trade.
Many people will be available to offer advice based on what made their own businesses successful but you have no obligation to follow the advice without considering your own specific situation. Just because something worked for someone else is no guarantee that it will work for you.