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Entrepreneurs usually like the perspective of giving advice and sharing experiences – after all, that’s how we all manage to learn, develop as business people and raise our level of expertise. Most of this so-called shared education goes into great detail in terms of good practices, work ideas and know-how that could skyrocket any small or large business. However, it’s just as important for entrepreneurs to spread the word about all things failure.
Because the truth is 90% of it online businesses fail after about four months, and it’s worth investigating why. Today, almost every enterprise has its established online space, if not completely online. So it’s definitely worth exploring some of the main obstacles online businesses face.
Both my entrepreneurial experience and that of other successful individuals have helped me realize several important aspects of online business that may be challenging for some. That said, some challenges are avoidable. After all, prevention has been proven to be one of the best strategies in virtually every aspect of life.
Let’s look at a few reasons why online businesses fail and how you can make sure your business doesn’t.
Related: 10 reasons why 7 out of 10 companies will fail within 10 years
Online businesses encounter specific obstacles along the way
Before we delve deeper into the topic of various reasons for failure, let’s first spend a minute or two explaining some of the obstacles facing online businesses in particular.
Online companies rely on their presence on the internet, but also on aspects such as brand awareness, relevance and reaching the right potential target group. That said, it’s not just enough to just go ahead and get your brand a website — besides, marketing teams have a lot of digging to do when it comes to reaching out, social media engagement, customer support, quality content, getting of know the potential customers and come up with successful marketing strategies.
Essentially, owning an online business requires a completely different approach compared to a brick-and-mortar business in terms of structure – the ukbusinessupdates.com has to spend a large portion of his time and energy on precise web development when it comes to security, scalability, and stability. with impeccable support and content customization. That being said, it is only natural that online businesses also encounter various types of outage-related situations.
Related: The True Small Business Failure Rate
1. More competition
In online businesses, more and more competitors are constantly popping up in the same niche. The more competition there is, the harder it is for companies to retain their customers and win the race to provide the best service. Since no one could stop the development of competition, companies could opt for different types of competition-related strategies.
Simply knowing your customers’ preferences is not always enough; rather trying to predict what they would need in the future is also a winning strategy. Try to add as many additional products to the already existing portfolio as possible to provide a full service – this could potentially reduce people’s need to look elsewhere for better alternatives. Offering personalized discounts and promotions definitely helps customers feel nurtured and cared for.
2. Lack of target audience research
One of the biggest problems online businesses face is the lack of relevance when it comes to their target customers and the items in stock. Part of marketing strategy is carefully researching your company’s customers to meet their needs and solve their problems.
Choosing the ideal buyer’s persona is a must. Participate in conversations with your prospects and research statistics to get to know them better. What do they need? Where do they live? What is their average income? Would they be willing to buy your products? All these questions require thorough research, but once a company knows its potential customers well, it can fully provide them with services, products and adequate support.
3. The lack of quality customer support
When referring to online businesses, customers also prefer to get in touch via chat, email or even phone. What is important is that the company provides proper customer support at all times – be it chatbots or real people who specialize in addressing issues and fixing bugs. A weak customer support experience can lead to a drop in profits.
Invest in hiring customer support experts who successfully address all customer issues and are able to provide quick problem resolution solutions. This can potentially increase your company’s trust and authority with potential audiences.
4. Bad web development
Since the business is online, it is absolutely crucial that the platform works properly and is fully functional. Stumbling over an obstacle (links or buttons that don’t work, website crashing or timeouts) is perhaps the fastest way for an online business to lose customers to the competition.
Make sure you invest in building a successful, scalable and fully functional platform that can withstand massive traffic volumes. Pay extra attention to your website being mobile friendly as many people prefer to shop online via their mobile devices – and security is a must. Ecommerce platforms must rely on reliable and secure payment integrations due to the shared personal and financial information of customers.
Related: Why embracing failure is good for business
Of course, there are plenty of other reasons why online businesses fail. While we certainly haven’t covered everything, we’ve certainly mentioned the basics.
Deciding on the issues mentioned above and finding smart solutions is, in my opinion, the first thing a company should do on a to-do list. Once we have succeeded in paving the way for accessibility, scalability, functionality and marketing, we have every opportunity to successfully position the brand in the ever-dynamic business landscape and strive for success.
