Starting a new business journey can be one of the most exciting things you’ll ever Do. But, there are some expensive online business mistakes that can totally ruin your business, if you’re not careful to avoid them.
These business mistakes has effectively ensured that 50 percent of all small businesses will fail within 5 years. And the trend has continued over the past 3 decades, according to statistics.
As a smart entrepreneur, you can’t afford to allow your new business to fail within 5 years. Because it’ll be a total waste of time and resources.
That’s why, you must by all means, identify and avoid the mistakes made by these other businesses. And that’s exactly what you’re going to learn in the following paragraphs.
Lack of Realistic Ideas
As someone that’s consulted for dozens of small businesses, over time, I have noticed that one of the biggest online business mistakes to avoid is starting your business without a realistic business idea.
In fact, this is one of the many reasons why most businesses fail.
The fact that a business idea sounds great does not necessarily mean there’s a clear market for the idea. So, this is one of the mistakes to avoid when starting an online business.
Because there’s in fact, millions of great business ideas out there but not all these ideas are realistic. Sometimes depending on your geographic location, target audience or demographics, a business idea may not be right for you.
So, before you jump on any idea, you want to get on a market research to find out how realistic it is, identify the demand for the product or services, the major thriving businesses in that niche, your available resources and the business requirements etc.
This will guide you in making a proper decision on whether the business is a good fit for you or not.
No Set Goals
One of the biggest online business mistakes you can make is starting your business without a clear goal.
Whether it’s starting a business year or starting up the business itself without a goal, this is one of the major mistakes to avoid when starting an online business.
Unfortunately, a lot of online business owners are making this mistakes, year in, year out and getting very damning consequences in return.
A business goal(s) is a set of the specific things you want to achieve with your business, over a defined period of time.
Having a business goal helps you to identify what’s important to your business, create realistic business strategies, time frame, resources and plans to achieve them. It also gives you the necessary tools to measure your success.
Without a set business goal, it gets very difficult to identify the things you should achieve as a business, find ways to achieve them or even track your success.
And when you’re not able to put these things in place it becomes impossible to make a decent progress with your business.
Starting Without a Plan
Starting without a realistic business plan is another of the expensive online business mistakes made by entrepreneurs.
As a beginner, even though you may not have a clear idea about steps you can take to achieve your business goals, one of the things you need to have in place is a rough idea about how to get from point A to B and then C and D.
Having a business plan gives you something to work with as a guide. Tells you what to do, why you’re doing it, how to do it and when to do what you have to do.
With this in place, things become a lot easier for you. Because instead of fumbling blindly, you already have a direction a road map to go with and this can give you a head start.
PS: Initially, your business plan has to be flexible and subject to changes just as you adjust your strategies. Over time it’ll become well defined.
And of course, starting without a business plan is one of the key mistakes you want to avoid when starting an online business.
Inadequate Funding Plan
Starting a business is one thing but having adequate funds to run the business is entirely a different ball game.
Although recent innovation in business development has made it possible for entrepreneurs to gain access to alternate small business funds, running a business without a funding plan is one of the online business mistakes that can ensure your business fails faster than expected.
Considering that funding is one of the top reasons why businesses fail, you have to avoid this by setting up a funding plan for your business.
So, you’ll have to identify critical funding sources for your business, find out key back up funding sources and ensure that you’ve put in place alternate sources as well.
If you’re the one to provide all the funding, identify how much you’ll save to achieve that,
Where you’ll need partners or equity investors, find out how much you’ll need from them how this will help your business and what stake you can offer in return.
Zero Periodic Audit
Businesses are not run in vacuum. You can’t continue to pump in resources into areas that are not doing well then expect to see any tangible outcomes.
As a smart entrepreneur, you want to prioritize keeping fewer liabilities and putting in your resources on assets that are productive. But you can’t identify high paying assets, resources or strategies without organizing a periodic audit of your business.
So, one of the approaches of successful businesses is that at intervals, they audit their business to have a better understanding of where they failed and areas they excelled at.
With this audit, businesses gets an idea of what’s working and what’s not. And at the end of the day, they can then make adjustments that will lead them to even better results.
So, as a small business owner, one of the online business mistakes to avoid, is running your business without a periodic audit.
Be it once in a monthly or quarterly period, you need this data to really understand how you can drive a more sustained growth for your business.
Wrong Pricing Structure
The wrong pricing system can make or break your business. So, it’s definitely one of the important online business takes to avoid, as a beginner.
Over the years, I have noticed that in their bid to attract more clients, a lot of new entrepreneurs and freelancers have consistently undervalued their product and services. Especially when starting out.
From under pricing, to allowing clients treat them shabbily and not having confidence in their products and services…These mistakes affects a lot of businesses.
It is understandable that in most industries, pricing can be a big factor. So, creating an affordable pricing can surely get you more clients, but, you must also understand that this is a like two edged sword.
While your pricing structure can attract low end clients in some industries, in other industries, it can leave an impression that you only provide low quality products or services.
There are also a number of new entrepreneurs that tend to over price their services, in an attempt to compete with long established brands. In some cases, this might actually boomerang.
Setting a list price for your product or services without doing a proper market survey is one of the mistakes to avoid when starting an online business.
So by all means, you have to understand your market exclusively, focus on creating the best value that matches the price system you want to set and then go ahead and create it.
Poor Customer Service
One of the excuse most small business entrepreneurs give is that they are still small so they don’t need any serious customer service.
They believe customer service is for bigger businesses. So, for this reason they can operate without a reachable mobile line, ignore checking their mails or refuse to give their clients the necessary courtesy. This is a costly online business mistake you want to avoid.
As an entrepreneur, you must be professional if you’re really planning to go far with your business. So you need a good customer service.
You can’t afford to operate without any regard for your clients and still expect to get recommendations or recurring patronage from them.
Using the Wrong Platforms
Another important online business mistake small business owners make is spending too much time and other resources on the wrong platforms.
It can be a social media platform, website or others, the moment you spend your resources on different platform without sending based on the result the platform is generating, you’ll end up wasting your time.
Even though it’s crucial to get visibility on social media, you don’t have to be on all social media platforms.
As much as possible, focus on using the 80/20 principle. Identify and spend a majority of your resources and time on platforms that’s generating the best results.
This is the best way to drive sustained growth.
Copying Wrong Strategies
No matter how perfect it worked for another person, sometimes a strategy you read online may not work for you.
This has got nothing to do with you in person but it could involve the specific situation of the person, their location or a combination of other factors peculiar to them.
If you read up a strategy, also be sure you understand the principle behind the strategy. And its context of use.
Don’t adopt everything you see online. Some ideas, strategies etc. are not applicable in certain locations or for some businesses.
Read the whole concept and have a background understanding of some concepts before applying them to your business.
This will save you from investing your time and resources on strategies that cannot really work for your business..
This also goes out specifically to small business owners in developing countries. Some of the things that work for those big businesses in the developing economies may not be working for you exactly the same way.
Take for example, residents of some African countries cannot receive direct payment via PayPal at the moment.
But, that doesn’t mean that the article you just read about receiving payment via PayPal cannot work because it doesn’t work for you.
It means you may have to find a PayPal alternative if you want to use a third party payment platform for your business in your current location.
So don’t always assume every business tip you read online will work out exactly the way you read it. Try to understand the context, the peculiarity of your own situation before applying it to your business.
In conclusion, starting and growing a successful online business takes a lot of guts, work and effort, but, knowing the possible business mistakes to when starting an online business can make your journey to success much more easier.
This is what you just learned in this guide. And when you take steps to avoid all the mistakes listed here, you shall increase your chances of building your own thriving and successful business.
For even better guidance and mentoring, reach out to our support team let’s get you by the hand to build your business here.
Now, it’s over to you! What’s the biggest online business mistakes you wish you never made? Drop your comments below.