As an internet entrepreneur you cannot expect to succeed without some key basic business skills.
Incompetence has aptly been determined by a study conducted by ISBDC using U.S. Census Bureau and University
of Tennessee statistics as the leading cause of business failure, responsible for a whopping 46% of the rate.
Now let’s look at the 8 different manifestations of incompetence:
No time to read the summarily list? Click here to read List of 90 reasons why 90 percent of online businesses fail
Reason #20: Lack of planning
“If you fail to plan then you plan to fail,” Benjamin Franklin.
On the contrary, those who succeed online make a solid and realistic business plan as the basis of their successful business. They know that having a blueprint that outlines every detail of their new business will guide them along the right path to success.
Reason #21: No Operating Goals and Objectives
Successful online businesses also have specific goals set for each month; revenue objectives, profit objectives, numbers of new customers, specific marketing and operational activities, etc.
Reason #22: Taking an emotional approach to pricing
The third element of an offer is pricing and packaging. It is a mistake for a business to ask its clients to buy too much or offer them too comprehensive a package. It is equally bad to undersell yourself. What successful companies do is identify their sweet spot.
Reason #23: Problems with taxes (Especially Non-payment of taxes)
Newly-created dotcoms which do not have accounting systems in place may create unwarranted losses for themselves when they overpay their taxes or have problems with the tax authorities if they underpaid.
Reason #24: No knowledge of industry pricing conventions
Successful companies clearly define their pricing strategy and learn to price their product or service correctly.
Reason #25: No knowledge of financing requirements and conventions
Many small business owners failed because they did not know how to fulfil the need for finance for their small online business often because of lack of a business plan.
Some 71% of firms fail for lack of financial planning. Three particular contributing factors are inability to manage working capital, an unbalanced capital structure, and undercapitalization.
Reason #26: No experience in record-keeping
What many new online businesses ignore is that financial information is not only key to their success but also these financial records are paramount to their long-term success and survival.
So if you can’t handle your company’s paperwork yourself, it’s worth it hiring someone else to do it. What you will pay for this service is far less than what you will lose without it.
Reason #27: Living beyond the means of the business (or, Failure to plough the initial profits back into the business)
Some online businesspeople start to live off their businesses before the businesses could support them. If you spend more money than comes in, you will soon be out of money and logically out of business too.
However if you fully invest early profits into growing the business quicker and keep reinvesting in it, the returns will be enough for the business to be self-sustaining.
Now does avoiding these pitfalls of the incompetence of a business manager save your company? Yes and no. This is because unbalanced experience or even a total lack of managerial experience can also kill a company. And that is what we will consider in the next piece.
Ready to Get Serious About Starting an Online Business?
“It’s never too late to be who you might have been,” – George Elliot
Sure, you can become part of the 10% successful online businesses by joining Wealthy Affiliate.
Your personal guide to securing your future online
Want to read the extended piece? Click here to 90 reasons why 90 percent of online businesses fail – Part II
Click here to go to Summary list of 90 Reasons Why 90 Percent of Online Businesses Fail – Part III