No doubt, an online business has low barriers to entry. So if you have an entrepreneurial spirit, your first choice to become your own boss would probably be an online business model.
And the fact that everyone (read self confessed online marketing experts) only talks about how easy it is to make an online living motivates you to join the online brigade. These experts would have you believe that all you need to do is set up the business system and sit back and enjoy the monetary benefits.
And as you have no reason to disbelieve such experts, you go ahead with a bright smile on your face and boundless optimism in your heart, dreaming of all the riches, hiding behind that computer screen.
But here is the question. Are there riches behind that computer screen? Do such riches make themselves apparent easily or do they come out only after you have spent significant time and money? Is online entrepreneurship a smooth rosy path as it is made out to be or is it filled with potholes that make the journey difficult? These are tough questions that no one asks, but for which I have attempted to provide the answers.
It is not my intention here to discourage you. The aim of this piece is to make you aware that online entrepreneurships do not always succeed. Your online business can dwindle your savings, demotivate you and eventually break your heart. The heart break comes because you were so confident nothing would go wrong. After all, this is an online business model and it just can’t fail, you thought. And that was your very first mistake.
An online business produces its share of heart breaks – Beware!
Being aware of what can go wrong at least prepares for the eventuality better.
Below are the Top 5 Reasons an Online Business can Break Your Heart
- Choosing the Right Business is Difficult
Choosing the right business is crucial for online success. But unfortunately, there is no single definition of ‘right business’. A right business could be one with high competition, which indicates obviously that there is a demand for the product/service the business is selling. A right business could be one where competition is low, giving you an opportunity to expand the market and get the first mover advantage.
In the former case, you have to spend marketing dollars and time in differentiating your business to the customer from amongst the existing players. In the latter, your marketing budget goes towards educating customers about the new product/service your business is offering. In either case, there will be no quick results and indeed no guarantee of the results too.
Another option for the right business is one with which you are familiar or have certain expertise. The question now arises, does this business fall under the high competition or low competition category? And how will you fare in either case scenario?
These are just some of the options available out there. There are so many more. To ensure that your online business is successful, the right combination of these variable factors is essential. And as there is no fixed rule to arrive at the right combination, the chances of getting it wrong are higher than the probability of getting it right.
- There are Too Many Factors Outside your Control
In an online business model, several factors critical to the business are outside your control. For instance, your website is hosted on a third party server. Obviously every web hosting provider offers uptime guarantee, security, speed of connection etc. Yet things can and do go wrong.
Your website can become slow if there is high traffic, thereby putting off your customers. A 98-99% uptime guarantee indicates that the server is down,1- 2 % of the time, and you lose business in that time, don’t you?
If your online business involves e-commerce, you have the additional responsibility of maintaining the security of customers’ data and enabling smooth monetary transaction. Though your customers hold you responsible of this action, it is actually a third party responsibility over which you have no control.
- The Internet is an Impersonal Medium
When you are selling through the internet, you just don’t have the chance to use those personal touches that would culminate in a sale in the physical world.
You and your customers are strangers.
Your customers have no idea who you are
There is no reason, why they should buy from you, especially if you are a new player on the market. And to entice them, you have to offer huge discounts or freebies or anything else that will attract them. You are helped by the fact that online customers usually have zero loyalty and will jump on to the site that offers them the best deal.
But the question is ‘how can a new business survive such strategies’. Offering monetary discounts and freebies are sure to affect profitability. So you decide to offer a free e-book. But that is also an investment either in terms of time or money, if you are getting the e-book done by an outside agency.
- Arriving at the Right Marketing Mix is Tough
We talked about offering discounts and freebies to prospective customers, but these will help only if said prospectives are aware of these offers.
This brings us to the important question of marketing for your online business. There are various methods for increasing the awareness of your online business including SEO, blogging, PPC ads, social media marketing and many more. Sometimes, offline methods of advertising or a combination of the two are helpful.
Arriving at the correct marketing mix for an online business can be tricky.
Getting the right mix of the marketing techniques is essential to ensure the awareness of your online business. As a debutant entrepreneur, it is very difficult to arrive at the right mix yourself, and having experts on board can push up the costs to an extent that may not be conducive to the financial health of the business.
- The Internet is Unforgiving
The slightest hint of dissatisfaction on the part of a customer can do vast damage to your fledgling online business.
While satisfied customers may or may not share their positive experiences, dissatisfied customers are quick off the mark to pull you down. Something as innocuous as a one time non-availability of stock can be translated as “don’t visit (your website name). They never have the stock”.
Unfair, but true. And being the viral medium that internet is, the damage done is widespread and pretty difficult to undo.
All you online entrepreneurs out there, do you agree with me? Would you like to share the stumbling blocks you encountered, before discovering success? I would love hear from you in the comments.