The sad truth is that 95% of businesses fail within 5 years. If you don’t realize the issues that lead to failure, then you too could be setting yourself up for a big fall. Listed below are the 6 most common reasons that new onlines businesses fail, along with specific steps you can take to ensure you are not another statistic.
6 Reasons New Online Businesses Fail
The 6 reasons for the high failure rate of new onlines businesses include:
REASON #1: Thinking With Your Heart
The first issue is thinking with your head and not your heart. This occurs when you jump into a new business venture just because you like the thought of it. It’s a ‘build it and they will come’ philosophy. The unfortunate truth is that this is one of the most destructive attitudes you could take. You must be providing a solution to a problem that a specific target market is having. This is thinking with your head. Your product or service must be a ‘must have’ as opposed to a ‘nice to have’. If you have not pre-qualified the demand then you could be stuck with HUGE debt and no market to sell it to.
REASON #2: Too Much Competition
The second issue is too much competition. Now don’t get me wrong. Competition is good. Competition shows that there is a viable market opportunity. But if the market is dominated by BIG players with huge marketing budgets and an army of staff, then it will be extremely difficult for you to get adequate marketing penetration. The best way to assess the level of competitiveness is to google search terms related to your business idea. Spend some time reviewing the results and researching the companies dominating the first 2/3 pages of the search results. This will give you a pretty good idea as to what you are dealing with.
REASON #3: Insufficient Demand
The third issue is insufficient demand. If you are going to spend a huge amount of time, money and energy getting into a particular niche, then you better ensure the niche is sufficient enough to run a viable business. Again use your common sense here. If you are building a SaaS and tools like jaaxy inform you that the market demand globally is just 100 searches per month, then that means the market is too small for your business to be viable.
REASON #4: Cashflow Difficulties
The fourth issue is cash flow. Remember in business cash is king. You need cash to create your website, build your software / product, pay for you hosting, email marketing, designers, ads, outsourcing and everything else. If you have insufficient cash reserves in advance of launching your business, you will most likely fail. Your options include: using your own funds, the 3 F’s (friends, fools and family), local government grants, private investors or using crowdfunding websites.
REASON #5: Knowledge Gaps
The fifth issue is knowledge gaps. Building a successful online business requires certain core competencies. These include technical, marketing and financial competencies. You really need a good general grasp of each of these areas. You can outsource virtually everything from programming to design and marketing but in order for you to project manage a successful business you need a good working knowledge of how all the different facets fit together. The best way to achieve this is to invest in a high-quality program that breaks down every aspect of building and running a successful online business. The very best program I’ve found to achieve this objective can be accessed by clicking here.
REASON #6: Poor Time Management
The sixth issue is poor time management. Many online marketers waste too much time on low value activities. These refer to activities / tasks that return very little for the time / money invested. SMART marketers have really sat down to think through what they are trying to achieve. They will have set clear goals with specific deadlines, carefully placed milestones and detailed plans of action. They will have task lists sorted by most important tasks. Every day they sit down to work on their business, they will have their time mapped out like a doctor i.e. specific tasks to specific time slots. The key here is that successful online entrepreneurs work ON their business more than IN their business. The thought process must be strategic / tactical and as much of the operational stuff as possible should be outsourced. The very best way to achieve this objective is to use PEAKSOFT. PeakSoft is our proprietary software service that helps individual to map out and execute exactly what they need to do to build a successful online business. With PeakSoft you’ll achieve your goals faster, manage your time better and eliminate the procrastination that kills so many online business.