3 Harsh Realities of Starting An Online Business

People always talk about “firing their boss” once they have a successful online business. After all, why would you want to work if you have a “successful” online business?

Would it not be dumb to work for $15/hour when you can make millions from the “comfort of your home”?

Here is the simple, brutal truth: A profitable online business is very difficult to start and maintain.

I have found comparing a brick-and-mortar business to an online business is a little misleading. If you try to manage your online business as a real-world business, you will most likely fail.

Here are 3 harsh realities of an online business which no one told you about:

1. Most people starting out online will fail many times: An online business is normally much more competitive than its brick-and-mortar counterpart. In fact, starting an online business has one of the worst failure rates.

The reasons are simple. You have to compete globally against companies whose costs are 75% less than yours (and who are still willing to offer discounts just to get additional business). You have to constantly innovate and stay ahead in the game. And finally, because the world is becoming smaller everyday, you have to work even harder to get the same customers, who can now choose between a million suppliers.

But what about those “get rich quick” courses, you ask? Arent they supposed to help you become an overnight success?

Nope! Most get rich quick courses are designed to feed on the dreams of people. The authors normally understand that their claims are outrageous, but if they can cover themselves legally, it is all good business. Most of them are more inclined to make a quick buck themselves than to care about the success of their customers.

The end result is simple. Most people starting an online business will fail because they do not have the time, money or the intellectual capabilities to handle such a unique venture.

2. People who make it big online are extremely rare: Let`s face the facts. Although every make money online website you go to features amazing success stories, we all know that they are exaggerated for the most part.

And even if they are not, only the successful people can afford to brag. The reality is that successful people make an extremely small percentage of the total number of people who have tried starting a business online.

In other words, the picture you see is extremely skewed.

For every success story, there are thousands of failures. The only difference is, unlike successful people, people who failed online cannot afford to brag or tell their story.

Chances are, if you ask the owner of a successful online business the secret behind his success, he will tell you that the secret was to fail 15-30 times..

3. You need a competitive edge: If you are thinking of starting an online business, you better differentiate yourself from your competitors effectively or you will go broke. Period.

Competing on price on the web is suicide because someone will always be able to under-cut you. This normally results in a price war where everyone loses. You and your competitors find it hard to stay profitable and will drive yourselves out of the market. The customer will look at your product or service and lose interest because “if it looks cheap it is cheap”.

Differentiate yourself and you will make money online. Statistics show that established copywriters and consultants make 100X-200X more money by servicing a SMALLER number of customers.

Think about that for a minute and you will understand how important differentiation is.

In conclusion, the picture is bleak, but not if you approach things the right way. Please note that this post is aimed not to discourage people, but to inform them of the realities of starting an online business.

If you are committed and are willing to learn, sooner or later you will succeed online.

Comments? Suggestions? Let us know what you think of this post!

34 thoughts on “3 Harsh Realities of Starting An Online Business

  1. You are right. There are very less people who makes big in online venture. People should understand the difficulties in online business.

  2. A very nice piece of work and I agree with it totally. People think it is easy to set-up an online business but it is not.You make set it up but running it successfully with profits is a different story. There are very less successful people in this and they all have faced some kind of hardship to be successful. Very nice points raised good article.

  3. Hi
    Spot on. I can tell you from my experience as an Internet Marketing expert that very few people realize how difficult online business is without the help of an expert.

  4. The web is a very hard place anymore to make it big, but you can still make a living if you have a good product and understand SEO along with alot of hard work. Yasir, you are right about competing for price. You will go down like the guy you are competing with. The article is very well written and realistic.

  5. Well said, no matter what many people promise in order to sell their “products”, making money on the internet isn’t easier than anywhere else, maybe even harder since there is alot of competition and no local advantage. A really important point many people seem to miss: You need to invest money in a business to make money, you can do it step by step, but just work with zero investment almost always means a failure.

  6. And this is where that thing that we call “SEO” comes into play. You are more likely to get first to the market if you dominate the search engines. It is a proven fact that people search whatever they want on google. So, if you are to rank for let’s say a keyphrase that has 40k searches a month, and you are no.1, then trully, we’re talking about business here.

  7. you’re article is almost honest to the point of being brutal, but in the end you are totally right. In Agora Inc the online guru’s would call it failing fast. Basically the premise was that 9 out of 10 of your efforts would fail so you needed to fail fast so that you could pick the one idea that worked.

    You needed to fail fast so the you didn’t blow all your money before you hit the one that worked.

  8. I’ve started 4 online real businesses and all but 1 have failed. My philosophy is “Through enough stuff against the wall and something will eventually stick”. I feel my endevors have failed due to lack of startup capital and trying to do it all myself.

    I still haven’t learned my lesson, so I’m creating 2 new online businesses now. I’m going to look for partners and investors this time… maybe 🙂

  9. Every business starts small and is bound to fail many times initially. Just like any business, it needs perseverance and hard work to make it successful. Thanks for sharing this post. If you get the chance, feel free to visit my site.

  10. Being your own boss takes a lot of discipline. Even though your goal may be to gain flexibility, that might not happen immediately, due to the number of hours required to get the business off the ground combined with the fact that there may be insufficient income to outsource or bring on staff. So ask yourself: Are you able and willing to put in the countless hours it takes to get a business off the ground?

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  12. This post speaks a lot of sense. The people who have made it big on the internet for the most part have done so by feeding off of people’s ambitions. “Give me $100 and I’ll tell you how I make lots of money online” pitches like this are so common all over the Internet and I’m afraid to say I’ve been suckered into a couple of them over the years, ah well, we live and learn!

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  16. This is soooo true,
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