The Reason Why 95% Of Small Online Businesses Fail
Small online businesses provide people with great potentials to earn the
income they have long been dreaming about in their life. Many people start
engaging in small online businesses because they see it as great way of
escaping the rigors of typical jobs that do not give them ample compensation.
The sad thing, however, is that 95% of small online businesses fail without
even reaching five years of its operation as reported by the Small Business
ADministration. This means that only five out of one hundred businesses make
it. So what makes so many online businesses fail? Is it the design of the
industry or is it simply the nature of humans to fail in business. According
to entrepreneurial experts, here are the common reasons why 95% of small
online businesses fail.
1. Lack of Financial Resources
Most people enter the small online businesses to make money, and therefore it
is often assumed that they do not have money in the first place and that is
why they have entered the industry. But truth is, to make money, you should
shell out some cash. For a business to succeed you have to handle certain
costs not only in production but also in marketing and promotions.
What good is having a product if you do not have a means to tell people that
you have a product to sell? Luckily, the amount of money you need for a small
online business is not that much. Thanks to the convenience and lowered costs
afforded by the internet, you can do a lot of things required by businesses
without shelling out as much as you would usually do with traditional
businesses.
2. Sluggish Business
You might be great, you might have all the skills and talent to run your
business. You may have more than enough money for capital. But if you do not
take action and do nothing about your business, then most likely it will
crumble into pieces. The same is true about your staff. You may get
overqualified people to run your business, but it will not run at all if they
are just sitting pretty.
Businesses do not have their own feet and they would definitely not run on
their own. You have to have the right amount of discipline and will power for
you to get your business going. There is no room for procrastination, do
everything you can do now immediately. You have to build momentum so that
your everything would go on rolling. If some people who work under you are
getting sluggish, prep them up. If they still would not budge, you have all
the right to replace them with someone on-the-go.
3. Lack of Market
Most new small online entrepreneurs think that they can sustain their
business with their warm market, that is people whom you already know. Your
family, friends, and colleagues are indeed sure to patronize your product,
but they can only do so to a certain extent of time. You cannot expect to get
your income mainly from your small circle of friends. You have to reach out
to other people. In business, your mothers advice not to talk to strangers
no longer prevails. You have to talk to strangers, because strangers should
comprise the great majority of your target market because there are indeed
hundreds of times more strangers than the friends you have.
4. Lack of Know-How and Talents
You may have the capital, you may have the drive, and you may have the market,
but if you do not have the skills or knowledge for doing business, you would
not make it. A lot of businesses fail because their owners simply do not know
how to run a business. Luckily, learning business skills is quite easy
nowadays with the great proliferation of self-help books in management and
entrepreneurship. Acquaint yourself with the tricks of the trade. Usually
these things are quite simple skills that you already do in daily life, you
just need to know what these skills exactly are so that you may use them in
your business.
The reasons why 95% of small online businesses fail are not that hard to find
out. Once you get to know these factors of failure, you may then easily avoid
them and do the necessary steps to surpass them for your small online
business to succeed.
by: Elijah Chai
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