Top 5 Faults to Sidestep When Starting an Online Business

30 Jun , 2017 Articles

Top 5 Faults to Sidestep When Starting an Online Business

Starting an online business is a simple process in comparison to the brick and mortar version. All you need is identifying a gap in the market, designing a product, setting up a website and marketing your business through paid and free online platforms. With these structures in place, you are good to start streaming some revenue on your accounts.

But is this true? Most webpreneurs fail in the way they think about establishing online businesses. The misconception on the easiness to start web-based ventures lead to their failing.  As you join the new trend in the investment industry, here are the five mistakes you should avoid:

  • Not developing a business plan

Lack of a business plan is a major mistake most webpreneurs make when starting an online business. Despite that you do not necessarily require a formal business plan document; it does not mean you do not need one. Having a zero plan is the cause of all failures the most used phrase “people do not plan to fail, but fail to plan.”

 Hence, if you are looking on to succeed in the online venture; having a business plan is not an exception. You need to plan how you will run your business as well as the perfect market for your products and services.

  • Lacking a startup budget

As you know, budgeting involves planning of the way you are going to spend your money. Most of the online entrepreneurs ignore the aspect of developing a budget for their business. Ignoring the financial planning aspect makes most of the online startups to run out of cash before making any revenue.

 As such, it is important to set up a budget while starting an online business. The budget should contain the goals you are looking to achieving and the cost of accomplishing them in relation to the available cash.

  • Poor pricing strategy

As you start your online business, most experts will advise you to charge low prices so as to penetrate the market easily. Following the advice, most webpreneurs set prices that do not cover their expenses. Harshly enough, due to their prices, the target clients are suspicious about their quality. Hence, their goal of winning these customers favor fails.

In this regard, when setting up prices for your online startup, you should consider your prospective customers as well as business costs.

  • Not concentrating on building customer relationship

Operating through the virtual platform makes a significant percentage of webpreneurs to ignore the reality that they are dealing with humans. Most online startups neglect customer services forgetting that they will always need them to continue making profits. Hence customers never come back to the business again.

For this reason, you should not forget that your online business deals with people. Thus, you should always offer the same level of customer services as you would in a brick and mortar business.

  • Being so generous without an equal gain

One of the philosophies if not gospel you will find in most advisories on how to easily start and succeed in online business is offering freebies. However, while this may be an effective approach, your giving should be equal to your gains. Too much generosity results to failing of a vast number of online startups. In this essence, you need to consider your benefits from you freebies. If they do not gain you anything, then you should think otherwise.

Conclusion

As seen, when starting an online business, you should develop a good business plan. Also, it is vital to have an operational budget, provide quality customer services, and to develop a viable pricing strategy. With these bits, you will avoid repeating the mistakes of your predecessors in new online startups.


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