97% Of Businesses Fail Online, Why?

97% of businesses fail online.  Why?

The desire to create and enjoy success online is not an uncommon desire for most business owners.

The lure of online business is clear.  A brick and motor business is limited to hours in the day as well as geographical conditions that limit the amount of consumers that a business can service.

This is not the case for an online ecommerce store.  A website is not limited to hours in a day or driving distance to the store. 

You can think of E-Commerce as the Gold Rush years where everyone that could get out and claim a spot, did.  The difference would be that the Gold miners had a better understanding of the tools they needed and the techniques to be used to discover their prize.

Today’s business owner is asked to wear too many hats.  Most business owners have a certain type of personality that’s geared toward success.  These owners are not lacking in the will to succeed, they are lacking in the tools and knowledge to make that success a reality.

Any person can become an expert in 1 area or, perhaps even several areas but the load that’s been placed on today’s business owner is simply overwhelming and is not limited to the size of the business.

During the Gold Rush the tools and techniques fell into a tight little package, a minor could understand what had to be done and attempt to recreate those actions.  This is harder for today’s business owners. 

In today’s age of technology and information, the business owners are in a continual state of fending off the offers of “the right way” to do business online.  With the almost unlimited amount of companies that have sprung up it can easily turn into a full time job for a business owner to weed out the truth.

The real issue here is not how to find the right tools and techniques.  The real issue is to understand that success online is not just 1 tool.  There is no business model online that will bring success without working in conjunction with several other tools and techniques.

What can you expect if you can pull this off?  That is the elusive pot of gold at the end of the rainbow.  That pot of gold though, will not come easy.

As a web developer I speak with business owners everyday that explain their journey and the story is always very similar.

I will attempt to help clear up a few misconceptions and common mistakes in both starting and running an online business.

First let’s lay it on the table and look at the numbers. 

Every minute of every day 571 new websites are launched.  97% of those sites will fail.  Why?

For a large percentage of those failed websites, the owners were unprepared for the investment of their time and money to create a solid and functioning online business.

The dream of being able to enjoy success without spending any time or money on the proper tools is what I refer to as the diet pill mentality.  This idea that you could grab a “do it yourself”, “free”, website template and the world would naturally beat a path to your bank account is simply false.

This is not to say that there are not hundreds, if not thousands, of businesses that exist to help you part with your cash in search of that dream. 

I want to talk about the “Guarantee”

After years of conversations with clients, I’ve seen a pattern that needs to be cleared up before we move on.  That is the “guarantee” of success.

It seems that many people are looking to be guaranteed the winning ticket before they will entertain creating a website.  I’m sure that it is a logical request in their minds when it’s asked but if you bring reality into the equation than you have to know there is NO guarantee.  It would be great if there was.  Could you imagine how wonderful life would be if you could pay one fee that was affordable to the masses or free and wake up to an endless flow of profits?  I would buy 6 in a heartbeat.

What most people fail to understand is that, in business, there is no guarantee.  Ask any of the hundreds of multimillion dollar companies that failed and shut their doors over the past decade.

These businesses were not badly formed or run but still, they failed.  I can assure you that those failed mega companies were not worried about spending a few thousand dollars on a website.

Before I go into why only 3% of businesses online succeed, I want to make sure I’m not wasting your time.

If you are a business owner or want to become a business owner but you are not willing or able to say yes to the following bullet points, I would encourage you to stop your efforts until you can say yes to the following list.

• Do you have a plan written up for how you will run your online business?
• Do you have the assets in the bank or available to cover the costs of equipment, staff, product, recurring licenses, marketing, advertising, SEO and website creation?
• Do you have the available hours in the day to devote to your business?
• Do you know who your customers are, where they are and what makes them buy your products?

If you can say yes to these questions then you are far above the curve and all you need is a little help with your strategy so let’s continue.

Again, as a developer I look at the foundation of your business first but to create the right foundation you first have to know what that foundation will be holding.

Top reasons for failure are:

• Poor planning
• Misuse of funds
• Trying to cover everything and sell to everyone
• Poor interface of website
• Lack of content on pages
• Unstable, sloppy website platform

Poor Planning and Forecasting of your products – before you put your first product online, you’re going to want to know if people are looking to purchase the product.  If they are, how big is the demand, what price point will you need to be at to be profitable and who are you competing against?  Can you purchase the product at a cost that allows you to be competitive and make profit?

With E-commerce and brick and motor alike, you must look at ROI and not the gross receipts.  If you’re books show you sold $10,000 in products on your website during the month you shouldn’t be bringing out the Champaign.  You need to know how much net profit you had after all costs, including banking, shipping and labor for the employee(even if that is you) that was in charge of answering the phones, ordering supplies, processing orders etc.  If your gross is 10k but the net is $500 after costs, perhaps rethinking your product focus is in order.

Misuse of funds – What I mean by this is using funds on areas that will give you no potential for sales.  Many business owners spend funds that should be used to generate business and not on the things like cars, vehicle wraps etc.  There will be time to buy the fun things after you’re generating income.  In the beginning all funds should be used to drive sales to your business.

Selling to everyone – Almost 100% of the owners of ecommerce sites completely forget that they will be competing in an environment that makes it extremely easy for your potential customers to shop your competitors.   With e-commerce you can’t expect to put the same product with the same image, the same description and the same price and shipping as everyone else on the net and expect that it will bring in traffic.

You will want to find a way to make your store stand out from the others.  Ask yourself, “Why should they buy from me?”

When I speak with site owners about the new site project, the question is always, “how many products or lines will you carry?” the answer is usually “As many as I can”.  Wrong!

When you start out trying to be everything to everyone you will quicker find out that you can’t control your products, even if they are not in your warehouse. 

If you want true success then you need to start out with those products that you know, and when I say “know”, I mean that you understand the product, you understand the competitors for that product, and you understand how people are searching for it and what makes them want the product in the first place.

Having a website with 100k products that are not priced right and have duplicate content will only mean you will flounder around until the day you declare that the website just didn’t work.

A website is a tool, no different from your blender in the kitchen.  If you don’t use it in the right way with the right ingredients then you can’t expect to blame the blender when your smoothly tastes bad.

Poor interface of your website – When I talk about poor interface I mean that your website could be fantastic! It could have all the right structure, words, images etc.  But if it’s not easy to navigate or your customers have to search around to find what they’re looking for then they simply hit the back button and move on to the next choice.

So here are the numbers.  Forrester says that you have about 3 seconds to get a visitors attention once they hit your page.  Talk about no patience right?  If you’re site is designed with heavy graphics, flash, huge banners that load slow, than you just lost that customer while they were waiting for your site to load.  Search engines know this fact and tend to ignore websites that have a long load time when they are determining what sites will show up on the front page of the search query.

Your website needs to be created for the search engines as well as your customers. 

Lack of content on your pages – If you can stand back and put yourself into the shoes of your visitors, you’ll quickly understand the importance of each page on your website.  Treat your site like you were seeing from the eyes and desire of the person you wish to sell your product.

Ask yourself these questions about every page on your site:

• What is the purpose of this page?
• Does this page meet or exceed its purpose?
• What do I want the person that’s viewing this page to feel about it?
• What do I want the visitor to do with the information they just read?
• Does this page tell a visitor what to do and how to do it?

If you can do this with each page then you are off to the races.  Unfortunately in real life, we have ringing phones, barking dogs and dinners to make.  There is a clear degradation in quality of pages when you attempt to create the correct content all in one sitting.  What tends to happen is page one is great! It has all the proper items on the page including good text, images, links, videos etc.  The second page gets a bit shorter and by page 5 there is one sentence and an image that was put on with the internal thought of “that will work for now”. 

The truth is that you will most likely never go back to that page once you taken it half way.  Life and other concerns will drive you onward and upwards and that page will not stand a chance of being seen on the first page of Google and if it ever does make it to a top spot, it will lack the ability to turn a visitor into a buyer.

People will forget what you say.  They will forget what you do.  But they will never forget how you made them feel.  How does your website make people feel?

Unstable, sloppy website platform – If you were going to open a brick and motor business and expect to find success, would you justify to yourself using free drift wood to construct your building?  Would you ignore the paint on the walls and hand write your signs and displays?  If you can look at your website like you would look at a brick and mortar location then you will understand that your visitors and customers are forming opinions about your business and products based on what they see.

Consumers are pretty savvy these days.  They know they have unlimited choices. Gone are the days that a consumer will purchase from you simply because they don’t want to get back in the car and go across town to see what your competitor has to offer.

They have to click one button to get back to an unlimited list of competitors.  You have one shop to make an impression. 

If you think that they will spend the time to find what they’re looking for on your website because YOU know where you put it, you are mistaken.  You must think like your buyers, talk to their needs or you will be one of the 600 million websites online today and your business will not grow.

In Closing

Look, no one is saying you’re not great at what you do.  Henry Ford did not know how to build a car.  He did know how to find the people that did know and make use of them.

Running a business online means that you put the right people in place and let them do what they know how to do.

If you think you’re going to save yourself money by doing it all yourself, your wrong.

No successful business owner made it to the top alone.  They put the right talent in the right spots and let them run.

Complete Web Solutions was formed on the concept of creating the right solution for your business.  Our team is just as invested is seeing your business succeed as you are.

If you’ve made it to the end of this page and anything you read here clicked than you should pick up the phone and call us now.  The good news is that most of your competition will never use any of the tools needed to be successful.  The bad news is that a handful will.  We can help develop your website and guide you through the world of E-Commerce.

Call 702-570-9069 and our team will get you the information you need at no cost.