Summary list of 90 Reasons Why 90 percent of Online Businesses Fail – Part IV
• Lack of key marketing basics
Internet marketing does not run on auto-pilot. Period.
So marketing calls for some hard work from you. Here are the 18 reasons why.
No time to read the summarily list? Click here to read List of 90 reasons why 90% of online businesses fail
Reason #40: No market awareness
A factor which makes online start-ups fail from the beginning is when the owners do not investigate a market before going in. So they may not only plunge into a down market but also find themselves in an area already saturated with well-established companies, making it impossible for them to break in.
Reason # 41: Poor Marketing
What kills a small business going into a market is poor marketing.
Dotcoms eager to succeed mix both online marketing with traditional marketing methods such as brochures, business cards and flyers.
Reason #42: No profitable business model with proven revenue streams.
If some businesspeople fail online it is because they fail to accurately determine product/market fit while that is what makes the money roll in.
You can also nail your business model using tools and methodologies such as Minimum Viable Products, Lean Marketing and Experimentation.
Reason #43: Entering Industry blindly
One reason some business owners fail is that they start their businesses before fully investigating the industry. This leaping before you look attitude is what one writer aptly referred to as entering a “sunset industry”.
Reason #44: Entrepreneur falls in love with the product/business
Business owners bent on succeeding know that it is suicidal not to change with the times. Imagine the outcome if you doggedly wanted to sell the good old vinyl records while the trend was on CDs or if you were still manufacturing record players while what people are buying are CD players.
Reason #45: Rigidity
We already know from Dun & Bradstreet and INC. magazine that 33% of all new businesses fail within the first six months of creation, fifty percent do so within the first two years of operation and 75% within the first three. What can account for some of the latter failure rates is rigidity, which is, not adjusting their strategy to remain successful.
Reason #46: Not Understanding the Target Customer
Some business owners open their doors for business without finding out anything about their target customers such as buyer demographics and psychographics, how they buy, what they buy, when they buy, what motivates them to buy and where they buy.
Reason #47: Segmentation and Targeting
To effectively get to your target customer, you need to find your niche.
Selling online is all about targeting well-defined, niche audiences.
Reason #48: Not handling the Offer well
What kills new entrepreneurs straight from the beginning is a weak offer.
On the other hand a complicated offer may also make new businesspeople lose from the beginning. Businesses seeking success do not overdo it by creating a virtual “courtroom brief” telling customers why they should give them their custom; they rather seek to simplify the offers.
Reason #49: Poor customer care
A common mistake usually made by unsuccessful businesses is failure to understand and listen to customers.
Reason #50: Lack of deep dialogue with customers
Companies must engage in real dialogue with the customer. They don’t forget the axiom: Markets are conversations.
Reason #51: No differentiation – Just Another “Me Too” Business
Many businesses have failed because they have no unique identity in the market. They are just another “me too” business.
If, on the contrary, you can offer a different or a better product or service in terms of better location, better quality, broader selection, extended warranty, faster delivery, lower prices, etc., then prospective customers can be expected to do business with your company.
Reason #52: Failure to communicate value propositions clearly, concisely and compellingly
Now you have found your point of differentiation, so what next? Businesses attacked by the “virus” called ‘failure to communicate’ blow it by failing to communicate their message in a clear, concise and compelling manner.
Reason #53: Expanding too fast
If your business is succeeding beyond your expectations, which businessperson wouldn’t want to expand?
Knowledgeable businesses don’t expand too fast and they exercise the same caution with research, strategy and planning. For they know that should the strategy fail, the accompanying financial cyclone can devastate the whole enterprise.
Reason #54: Jumping from one internet program to another
People who fail in web business are those who embrace too many internet programs before they even know how to market.
Reason #55: Lack of knowledge of self
Maybe you know the ancient Greek saying Know yourself. Unsuccessful companies fail to know themselves through testing because they equate it with weakness.
Reason #56: Lack of a clearly defined exit strategy
Right from the start of the business, owners must know their exit strategy by defining how and when investors (family members, friends, angels, venture capitalists and such) will get their money out of the business.
Reason # 57: Uncontrolled Growth
Growth is every business owner’s dream. But like stagnation, growth can bankrupt a business if left unbridled. This happens when the income you generate is inadequate to support your expansion programme.
Like uncontrolled growth, unchecked competition is also a threat to the survival of a small business. The next piece will touch on this.
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Want to read the extended piece? Click here to read 90 reasons why 90 percent of online businesses fail – Part IV
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