Why do many internet businesses fail?
It does not matter what type of business you start. It can be an online business, a local service company, or a small family store. Over 90% of business start up fail. Yes I know, many of my articles seem like I am trying to discourage you but I truly want you know what you are up against. I am only writing from experience. Over the past 30 years I have started many business ventures and I am passionate about this topic of success and failure.
I have experienced some catastrophic failures and also was fortunate to experience some nice successes. Over time I have looked back at my failures and successes and realized that both can be summed up by these five principles of business success and failure. Out of those many businesses that I had which failed, not many of them failed because they were bad ideas. They failed because of 5 small, but big reasons. If you understand these reasons, you will have a greater chance of being successful and become one of the winning 10%.
Many businesses have no real plan.
Executing a plan helps you to hedge your bet against failure. You need to have a plan. I am not talking about a 500 page business plan that you need to present to investors (unless you are looking for investments), but a simple step by step plan that you plan to follow. I do not want you to take this lightly. I also want you to realize that most business owners that experienced great successes not only had a plan but was able to change that plan as the business changed.
If you see that things in your original plan are not working out, make adjustments to the plan and learn from your mistakes. A business plan is a living document and changes as the market changes or as the original plan demonstrates areas that are not as successful as expected. This is a great lesson to learn. You need a plan but you cannot give up on the plan. As you experience failures, you need to learn from it and change the plan until you get it right.
The businesses that fail did not learn how to create opportunities.
Many first time business owners believe that because they were in business that the customers would just flow in naturally. There is nothing further than the truth. As I mentioned earlier, the failures I had were because I did not create the opportunities for myself. I assumed because I had a great idea that the customers would follow in and I would wealthy. Well I realized that I needed to create my dream and destiny, but I could not do it on my own ideas and thoughts alone.
Over the years with my many successes and failures, I learned that my most successful venture were the ones where I let my ego fall to the back seat. In other words I was true to myself and realized that I was not the expert and collaborated with successful people and learned from their experiences. I sought out knowledge in my market and field and learned what was successful and what failed. This accelerated my success or helped me avoid complete failure. Unfortunately I think many of my failures would have been great successes if I had applied this principle. You can definitely learn from successful people if you are able t listen and take constructive criticism.
Failed business owners did not have the knowledge they needed.
First time business owners are inexperienced but because they have a great idea and a dream to provide for themselves and their families they think they know all there is to know. They are so pumped up with the idea that they are a business owner and that they are fulfilling their dreams that their judgement is clouded.
It is definitely suggested to be energetic about your new business idea but please realize that you do not know it all. I fell into this many times throughout my career. I felt my ideas, business structure and products or services we so superior that it was inevitable to be successful. Unfortunately I was wrong, but fortunately I learned from those experiences. I was definitely humbled. But I am grateful form these learning experiences.
The bad part about these learning experiences was the money I lost. I do not want you to lose tons of cash by making the same mistakes. Many newbie business owners do not know how to focus on their niche market. They begin simple with an idea that can be quite profitable but see so many different ways to make money with their idea that they start to lose focus. They start other products and services. They expand on their offerings without making money on their original idea. These business owners increase what they offer without mastering income opportunities with their first idea. I was one of those business owners many times. I thank the higher power that I have learned.
Diversification is great for business but only after you have mastered one or two original business ideas and begin making money at them. Once you begin to master making money with one aspect of your business then you can expand to additional ideas.
Failed businesses had a lack of vision.
This point sort of sums up some of the points in the last few paragraphs. Many online and offline business owners lack the vision for their long term business growth. They go for the quick, short term income and forget that they got into the business for the long term. In many of my online and offline business ventures, I was caught up with making a quick dollar. I would make a ton of money quickly but soon realize that the money dries up and there was no longevity.
You need to really think through your business goals and every time an opportunity arrives you need to seriously look at the costs and benefits. Will this opportunity help your long term goal. If you spend countless hours on this facet of your business will it help you continue to make money or will it be a short term profit that is gone tomorrow.
I do not want to make this as black and white as it sounds. In business, the short term profit is a great way to increase your annual income and do not want to steer you away from such an income. On the other hand, you need to have income that is continually coming in and not center your business on these one-off, quick-buck jobs. Instead use them to compliment your business and not make them your only source of income.
Many business owners that fail gave up too early.
WOWâ€¦ I really cannot say to much on this topic. I am really, truly, and sincerely serious about this topic. Many of the potential millionaires give up on their idea too soon. There were so many business ideas that I gave up on when the going got tough that sometimes I want to bang my own head against a brick wall. Yes, I am successful now but I gave up on so many business ideas year ago that I could have retired in half the time that most people do,
The key to success is flexibility. If you have an idea that is not reaping the success you wished for you need to find out why. You need to change your marketing message, your product or service mix, or you need to learn more in your field. If you do your homework and learn from your potential customers you can become successful.
If your idea is a well though out one, solves a problem for potential customers, and has a decent markup then you can succeed. Do not give up too early. Many business owners give up because they lose money and do not want to lose more, they feel embarrassed, or they receive pressure from family and friends to give up. If it is your passion and you can continue financially, then keep going. Learn form the failures and create your own success.
Below is another great info-graphic that summarizes what causes online business failure and how you can avoid them. These facts are not for internet businesses alone but for any business dream or venture. Keep them close, read them daily, and learn from them. If you commit to some of the techniques I offer you will be way ahead of those that have not seen this article or found this website.
To your success,