One in every thousand online businesses fail. The statistics are higher than the failure rate of offline businesses, leaving experts to wonder if it is actually possible to create a successful internet based business. Like any business model, unless you follow a plan and success driven formula, then regardless of whether your business is online or offline, you are unlikely to make it work. Every business requires dedication, time and patience, however an online business also requires a whole set of additional skills that were unheard of 20 years ago.
When a new business started up back in the eighties, there were a range of skills required to optimise the chances of success. However a local business was unlikely to face competition from overseas, and many industry types such as travel agencies and record stores would thrive due to the absence of the internet. Manufacturing firms in Australia and America were far more advanced (and a cheaper option) than those in Asia, and parallel importing was not a term ever used in business.
Fast forward to 2012, and a rising number of industries are no longer viable business options, or simply do not exist outside of the online realm. However, the growth of online enterprise has created an entirely new set of problems. And that is the massive competition resulting from the rise and rise of people starting online and internet based companies. Where once dot com enterprises were the thriving new kids on the block, now the internet is a battlefield of businesses competing for search engine rankings, keyword domination and social media followings, with many unable to keep up and thus shutting down before the momentum ever has a chance to kick off.
Why are so many of these online businesses failing? Is it at all possible to grow a successful internet based enterprise? If so, then how is it done?
Yes, it is possible to build a successful online business, yet numerous business owners fail to either research their target market prior to launching, or simply do not have the budget and skills to grow a formidable enterprise.
A major problem is how easy it is to set up an internet based business at very little cost. People get excited. They can build their very own website for a low monthly fee, create social network accounts for free, find numerous free tools and tips to increase the profile of their business, so therefore are fooled into thinking anyone can start an online business and immediately earn a weekly income equivalent to an employee wage. These prospective business owners are convinced an online business is great idea that will save them a fortune so go for it. That is precisely the mindset that induces failure.
What 70% of business owners fail to realise, is that growing a successful online business is just as expensive as starting a franchise or corner store, the financial outlay is simply distributed to different areas.
True, an internet based business may not have shop or office rent. You may not incur costs for store and corporate fit outs. You may not even require staff or assistance so can save on people costs. Hey, you don't even need office attire, you can work in your lazy clothes with your clients and customers none the wiser.
However, how will your customers find you? If you want to be found easily to generate sales, then you need to pay for it. And to be honest, for search engine marketing to be incredibly successful you are going to be outlaying big dollars. There goes the money you saved on rent!
How about the time you spend optimising your website, writing content, creating blogs, updating social network pages? Time you are not being paid for. Unpaid hours.
And what about your competition? How will you beat them? A stand alone health store in a shopping mall is unlikely to have forty other stores right next door, competing for trade. Yet, type in "Health Store'' to any search engine and watch hundred of pages appear. This is your direct competition. To beat this competition, guess what, you have to pay for the privilege.
Now, many business owners that I deal with, are under the assumption that they can simply market their products or services on any social network and this will not only be cost saving but will deliver instant success. Wake up and smell the roses, no business will ever achieve success online by relying on one marketing technique to grow their business, especially depending on social networks to generate sales.
All of the above sounds rather negative and glum, so back to our original question. Is it at all possible to grow a successful online business? Yes, it is, and it can be done, but with a lot of hard work and persistence. There must be a solid business plan, funds to market the business, and the knowledge to promote the business smartly and wisely online. For any internet business to succeed, the business owner must realise an internet business is not a cheap way out. To attain success, as with any business, you require money, business accumen and the necessary skills. To think otherwise will guarantee failure.