It is the thing today to have an online business. There are people doing everything from running eBay shops to Membership sites. The problem is that most of these businesses will fail, and here’s why:
- No plan: There is a saying, If you aim at nothing, you will hit it every time. The translation of that is there is no plan, goal, or anything to measure if the venture is successful. You might argue sales, but not if you don’t know how much it is costing you to obtain that one sale. By not having a clear plan with a company’s purpose and goals, a company can be blown around by every trend that comes along.
- No research: Sometimes it is hard for people seeing money in their eyes to practice due diligence by researching their idea, checking for the competitors, targeting their audience, and how they can make a dent in that market. By not doing the research, a person is flying blind into an area, and may make some mistakes they may not be able to recover from.
- No target audience: Anyone who tells you that everyone is their audience, has no idea. Just in marketing basics, different demographics get their information differently. It is unlikely that you will find a a baby blanket advertised in an automotive parts magazine. Why? It’s a different audience. Again, with the arrow analogy, if you aim at nothing, you will hit it every time. As an online business, one of the first things a business must do is get the right traffic to their website. A site can have lots of traffic, but if it not to the people that are going to buy, then the business cannot flourish.
- Bad idea: Not to be unkind, but let’s face it some ideas are just plain bad. It may be a case where the idea started one way and by the time it came out, it was not the same. Some ideas are just not viable and lack the staying power.
- Bad financing: It is nice to believe that just because a business is online that it will not cost money to start. It does costs money, but it is used differently than a brick and mortar business. Money might be used for marketing as opposed to overhead, for example.
Running a business is one of the most exciting ventures a person can take, if they walk in with the right idea, plan, research, financing, and know their target audience. Without those five pieces, failure is almost guaranteed.