Do you ever think about quitting your day job and working from your laptop few hours a day and making enough to own a boat may be? I bet you do especially when there are ample examples of people who have actually done it. But do you know about people who have tried it and failed? Well, there are far too many of those.
There is nothing wrong with starting an internet based business; however, it is incredibly difficult to succeed.
The situation is that even three-quarter of the startups that do earn venture capitalist funding fail to show their investors an acceptable ROI. So what goes wrong? A lot of things apparently and many times it could be a very small mistake that brings the whole business down. So if you are thinking of quitting your job and starting an internet startup, pay heed to the following mistakes and avoid them at all costs:
No solid business plan
This can correctly be identified as the sum of reasons for any business, be it online or offline, to fail. So many people just assume that getting a website up and running is equivalent of success.
However, web based businesses too require careful planning and a lot of preparation. If you have a business background, you would already know how even a small negligence in business plan can bring everything down.
According to CB Insights Analysis, 17 per cent of the startups that fail do so because of lack of a business model.
Even if you are a one man team starting from your couch, you will need substantial preparation. You have to counter in costs, risks, resources, competition, payment channels, security, marketing, SEO and a lot more in the context of an internet based business.
Remember, even if it is an online business it must be treated like a business. This is why some basic business knowledge is necessary which thanks to internet is accessible pretty easily. This article explains how having a business degree can be highly beneficial but it is not necessary though.
Too much competition
There will virtually be hundreds of businesses online for almost anything you need done. You want a major cleaning of your apartment? Just run a Google search for your area and few dozen will pop up if you live in a metropolis.
Similarly there are dozens of SaaS, apps, tools and other types of businesses present online. So you cannot help but think do I even stand a chance?
If it is something truly novice and trailblazing, then it makes sense to go ahead and do it. But what if there are already many people doing what you do? You will read a lot that competition should not stop you but reality is if there is no market or too much competition, the risks and costs run too high.
That said, there are ways to stand out and beat the competition but bear in mind that it will not be easy. Your post business plan research should have thorough and rigorous market analysis that helps you decide whether it is even worth it.
No attention to branding
Branding is so important today it should be incorporated from day one of your business. Branding basically helps cement your identity in the world of business.
There are way too many success stories of small businesses that made it big through correct branding. What is branding? It is how your business is perceived by your customers mainly through the image you create with your name, logo, tag line, theme, colors, website etc.
For internet startups the most important thing in terms of branding is their name. Yes, your website’s name will play a major role in how things turn out for you. Like emphasized in the earlier two points, there is way too much competition to deal with. Choose a wrong name for your business and it will cease before it is even started.
In order to stand out you need a domain that is catchy, unique and relevant to your business.
No attention to design
“We’ll deal with the design later” said no successful online business owner ever! Design is survival when it comes to websites. A poorly designed website has no chance to make it in today’s world where the consumers are much more sophisticated than they were five years ago.
For perspective, read this great article on Forbes about how design can impact branding, marketing and SEO.
A small design flaw can cost you visitors and at such an early stage even one customer leaving could mean the end. From day one, make it your motto to get the absolute best design for your web pages.
Use the best web designers and tools, and test your website often. For this, A/B testing is the most cost effective way to go about. Keep a highly useable and comprehensible design that follows the theme of your business.
Marketing is the real game in the online world. With physical stores, you still have a chance of a customer randomly walk in. However, with a nascent website without proper marketing you cannot make conversions at all. The reason why we used the word ‘proper’ with marketing is because marketing needs attention to detail and a foolproof strategy.
In fact, when you start your online venture your biggest expenditure will be marketing alone and it is your job to make that money work.
If you stick to just one platform and use the old humdrum online marketing techniques, you are bound to fail. You have to be visible and active everywhere and target people that matter. If your business sells superhero costumes, for instance, you cannot have your banner run on an electronics blog.
Know who your customers are and target them specifically and in the right places. Social media is the most important platform for online marketing now. However, email marketing is still pretty much alive and should be utilised too.
Not having the right people
When you start your internet business, at some point you will need to hire people. Your team in the early stages of business will determine how quick it grows. Having the right people is no less than a miracle. There will be times when you will require late nights and weekends to work too.
You will obviously be ready to grind since it is your own thing but will your team members show equal enthusiasm?
Many entrepreneurs settle for people who have skills or experience. Such individuals, although great, can also be hard to work with. They have the skills, they can always find some other projects or work.
Also, the attitude and dedication towards the project is very important. People who treat the startup as their own and are fully involved are the best people to have on your team.
Not in touch with customers
Once your website is up and running, you will get visitors and how you interact with them can make or break your chances of growth. Your web design, social media, emails, everything should be treated as a way to communicate with your visitors. Provide excellent customer service on every platform.
Answer courteously all queries and resolve problem as quickly as possible. Start working on pursuing customer loyalty from the beginning as this will aid your growth and get the word out about you.
Even if the customers do not reach out to you, make sure you reach them. Send them newsletters, promotional emails, social media posts whatever helps you engage with them.
If they like your service, they will definitely recommend you to others. That is how organically you grow your visitors via earned marketing.
Now that you know what are some of the biggest mistakes people make with their internet startups you can avoid them from the beginning. Focus only on the most important things and spend your money wisely on things that matter.
Even when you do everything right, it could take considerable amount for your business to take off let alone earn a profit. However, it is not impossible and people have done it.
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