Why Online Businesses Fail -Entrepreneurs who fail in online business are a common thing in the business world, many don’t understand why they can fail, that’s why in this article we will discuss the 5 main reasons why many people fail in doing business online.
Online business as the name implies is a business that is run digitally, in various forms. Some become resellers and sell on eCommerce platforms, some open their online shop websites, some sell specifically on social media, and many more. Its essence is to use digital technology infrastructure to generate branding and sales.
Along with the development of increasingly sophisticated technology, the number of entrepreneurs who want to start an online business is also increasing day by day, this is also in line with data which states that the digital economy in The world has increased by more than 18% in just one year.
5 Main Reasons Why Online Businesses Fail
We can also see that there are currently a lot of MSMEs that have been very successful doing business online. But, not a few of them also fail in doing business online. We will find out why they can fail in running an online business.
Don’t have a strategy
Strategy is the most important thing in running a business, both conventional business and online business, because with a strategy we can find out what are the priorities, what opportunities can be exploited, to analysis to generate lots of sales. By having a well-thought-out strategy, you can easily make strategic decisions for your business so you don’t take a wrong step.
Strategies can help you get data and insights about competitors, running campaigns, and many other things. If you don’t have a strategy, it is very likely that the business you create will fail.
Only focus on one channel only
It’s also called an online business, there are lots of digital technologies that you can take advantage of. If you, for example, open an online business but only use social media as a sales tool, your online business will be displaced by the times and of course your competitors too. So, don’t just focus on growing your business through one channel, but make the most of it according to your capabilities and your desire for business development.
Give up quickly
Often, the problem that often occurs is that many people quickly give up on circumstances. For example, when your online business doesn’t generate enough sales to cover operational losses, in just one year you’ve given up. How can this mindset become a successful person?
This can actually be minimized by setting appropriate and relevant end goals. You can find out by doing market research and market validation. When your segmentation is validated, you can find out the right way to generate sales based on that data.
Basically, don’t give up quickly, when you have validated the market and know that the annual value of the industry is only Rp. 1 billion while you only get Rp. 100 million, meaning you can already produce 10% of sales in that industry line. It seems a little, but back again recognize market validation and make the best use of data.
Don’t want to invest
Investment is not only about money, investment of time and other resources is a form of your concern for the development of your online business. For example, so that you don’t fail in doing business online, you can invest in learning about digital marketing and then implementing it for your online business.
Lots of unhealthy competition
In a market that is saturated with many competitors, how can your business grow and be remembered by customers? There are many ways. However, the big problem is when competition starts to lead to unhealthy competition, using any means to gain market capitalization is a bad way.
If we just look at the offline business, there are lots of stalls scattered around and the locations are always almost next to other stalls. If you start a shop again in the midst of these people, what will happen? The “cake” that you can enjoy, aka the money that you can get, of course, will be less and less. Well , this also applies to creating an online business. Again, the mentor recommends that you use market research tools to get the latest insights and trends about the industry that you are working on.
Those are 5 reasons why many people fail in online business, keep in mind friends that failure is not the end of everything. It feels like there are so many wealthy people who have assets of up to tens of trillions of rupiah constantly reminding us not to give up and keep going even though we have been hit by failures many times. Because, from the experience of failure, we can better recognize the strengths, weaknesses, and of course so that you can be successful in the future.