In today’s trend, starting a business online is very easy, inexpensive and indeed very fast. In 2015, some report says that 70% of the U.S. people shop online at least a month. Still, most of the aspiring internet entrepreneurs believe that attractive designs and websites and pricing are enough to be successful in e-commerce. But the results are opposite of it as 90% of customers don’t buy from the website on the first encounter. Studies also refers that almost 80% of the new online stores close the door within 120 days due to failure. There are many factors need to be considered before jumping into the online business to avoid failure in the start-up phase. Many aspiring entrepreneurs fall into the trap of content which shows e-commerce selling like a cake walk, as achieving overnight success is a myth, it needs patience, persistence, focus, hard work, passion and lot of grinding to make anything successful in the long run.
Factors Need to be Considered
Entrepreneurs are not planned to fail but they failed to plan as implementation is very important than strategies. The lack of planning made store owners failed to focus on specific necessary steps both before and after setting up an online store. Here come the factors that affect the online business in the start-up phase. It is very important for aspiring entrepreneurs to consider while thinking of setting up an online store in the future or it might be very helpful to correct their mistakes now if they have one already as it is not too late to refocus.
1. End to End Online Business Knowledge:
If you ask people who are already in online business, 100% entrepreneurs out there not only agree to the fact but also they will tell you the importance of knowing the system you are going to play in. It is not mandatory to know everything top to bottom as most of the thing will be learned by staying up in the process. But still, it is somehow important to have some basic knowledge before jumping into the real game.
2. Insufficient Investments:
The interesting thing about starting a business online is only few hundred dollars away. For this reason, many people starting out without proper prerequisites. Many aspiring entrepreneurs started the business online by investing the amount, the problem comes because they failed to think beyond that. Doing business online also requires labours and capital like brick and wall stores. A few hundred dollars would be great to start out, but entrepreneurs need to think about long term objectives. It is important to plan the expenses for inventories and other requirements like marketing which needs investment frequently to make your sales start kicking. The poor marketing investment made entrepreneurs to shut the business after three to four months they literally don’t know what to do to kick start the sales leads to a horrible end.
3. Selling Similar Products:
Another horrible mistake people often do while starting the business online is selling same products. They sell similar products like competitors which will drag them to failure. Every entrepreneur should think about why the customers buy from you? And what are the values are you providing more than your competitors?
Why should customers buy from you still you are selling similar products which are available in every brick and wall stores and even online. You should differentiate your business offerings to standout and position the products to be unique. It should give superior values to your customers than your competitors in the market.
4. Lack of Long-term Goals:
Most entrepreneurs who fail in online business eventually had no long-term goals. Your intention and purpose play hand in hand for achieving success in online business. It will act as a fuel to run any business for the long term. As it will give you aim to achieve and plans to reach that level. All strategic decisions to achieve goals of your business would be long term as it will not be achieved in short run. So, it is important for entrepreneurs to have long term business goals to achieve successful results.
5. Develop the Products Based on Market Needs:
Customers don’t buy products if they don’t need. All successful products developed following an analysis of a market. The products should solve customer needs as they pay for something that meets their needs. Entrepreneurs should not build a product and then look for the market to sell it. It is important to look for valid market requirements to develop any products. Most entrepreneurs who fail in online business mostly fall in the first category. You will fail even if you spend more bucks on marketing if you develop the product without knowing any needs of the customers.
6. Awareness About the Market Condition:
It is indeed very important for entrepreneurs to know about the market they are in. And it will help to identify the current trends in the market, based on that entrepreneurs can use the opportunity to build their products and online business. It also will avoid entrepreneurs to develop something which are saturated in the market. It is very crucial to keep an eye on changing the market condition for successful online business. Before jumping into the online business, it is very important to know about the demographics of that market and target audiences to tailor made the products to suit that market needs.
7. Poor Marketing Strategies:
Everyone will agree with me if I say marketing is the heart of any business. Without marketing the potential customers don’t know about your offerings in the market. So, it is vital to make awareness about the business to make sales and earn profit out of it. But the problem arises when entrepreneurs don’t have proper strategies to market their products online. Keep in mind all you are doing is paying the marketers for possibility of sales but not paying for sales. Most of the time, it will lead to zero sales and end up shutting the business. Social media plays middleman role to market your products to the customers but it will not be an overnight success. Firstly, the entrepreneurs need to create awareness about the product to develop interest among the customers to make them desire to purchase your product. It needs lot of hustle and hard work to showcase your products to customers. But believe me, it will give success in the long run.
These are some of the essential factors need to be considered while entering an online business. Keep in mind, the successful business should have mastered these factors to achieve the results.
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Almubeen Mohammed Ayub
IMBA batch 2018