A lot of businesses are mostly online these days, and it’s gotten incredibly easy to start your own online business. If you have an entrepreneurial spirit and are considering starting a business, think about making it virtual instead of brick-and-mortar. You’ll save a lot of the overhead costs and expenses that are the bane of many a startup’s existence.
Think about it: You can be your own boss, finally get rid of that daily morning commute, start your dream business and make a little money while you’re at it. Sounds great, right?
Well, despite all the reasons to fire up an online business, many online startups never really get off the ground.
These ten traps are common among online businesses. Don’t let yourself fall into them.
Being Unprepared for the Commitment
If you aren’t ready to commit your full-time attention to this project, it likely won’t catch fire. When you launch an online business, you have to be ready for every fiber of your being to be about it. There’s a reason many side businesses are only side businesses for a short while.
Playing Monkey See, Monkey Do
Your idol may be Steve Jobs, but what worked for him won’t always work for you. Don’t do something just because you saw someone else do it. Whether it’s a marketing strategy, accounting system or software adoption, you need to consider the implications for your business. Test an idea before you roll it out for your whole business — it’ll save you time and money in the long run.
Improvising Too Much
Without a plan in place, your business doesn’t really have much. You may have an incredible seed in your idea, but in order to be successful, you’ll need to know the basics first. Without a foundation of core offering, target customers and what you’ll charge, you’ll run out of steam pretty quickly.
Skimping on Quality Employees
Don’t fall into the trap of free or cheap labor. Unpaid interns and fresh college graduates are great for the budget, but hiring them may mean you’re skimping on skill and industry know-how. If you hire employees to meet your needs right off the bat rather than fitting your needs to the (probably lacking) skills of an intern or entry-level hire, you’ll get more bang for your buck. Figure out what you need in a team before you go seeking out someone who will work for less money.
Forgetting About Profitability
When a business first tries to get off the ground, it can be all about revenue, leads and competitive pricing. But don’t forget that you have to be profitable, too. Before you set a price on the floor of the market, consider what goes into your product or service. Materials, labor costs, time and margins are all factors in your pricing. Remember: People will pay for a good quality product.
Giving Without Getting Back
Courting potential clients and customers is tricky. A lot of businesses will give something away for free to establish credibility or a good relationship, but don’t go overboard. Make sure what you give out is low-cost and that you’re getting something in return. If you go to a conference and hand out iPads as giveaways without getting anyone’s contact information, you’ll soon find yourself in a financial hole, not to mention without any prospects. Consider having visitors to your website submit their contact information in order to download an ebook or media kit.
Glazing Over Client Services
The bulk of your business may be done digitally, but don’t forget that your clients are humans, too. Be sure to offer customer service to everyone. You can have a designated email address, a specific client services Twitter handle or a Facebook page. Make sure it’s easy for customers to get in touch with you and that you respond to their feedback and needs. Not only will that help your business from a product perspective, but you’ll also be maintaining a valuable relationship.
Being Too Financially Optimistic
Taking a nonchalant stance on your finances is bad news in general, and it’s no different when it comes to your online business. Before you launch, outline a detailed budget that takes into account — and maybe even overestimates — not only the costs of running your business, but also the costs of living before you can start taking a salary.
Being Too Detail-Oriented
The business is your baby, but don’t tie yourself up in which font your emails should use or which shade of blue complements the logo the best. It’s easy to waste time on these small details, but your business needs you elsewhere. Spend your time working towards business goals and milestones until you’ve got everything running smoothly. Then decide between Helvetica and Tahoma.
Overdoing Social Media
Social media is key to any business these days, especially an online one. If you want your marketing to be well-rounded and hit your target audience, you should be on social media, but you don’t have to be on all social media. Depending on what you offer and who you offer it to, pick the one or two networks that are most valuable and focus on them. Otherwise, you’ll be wasting your time and energy on posts that don’t reach your customers.
It’s not easy to start an online business successfully — any entrepreneur will tell you it’s hard work. But with these tips in mind, you’ll be better prepared to avoid common mistakes.
Anum Yoon is the founder and editor of Current on Currency, a millennial money blog for anyone looking to get in control of their finances. Apart from finance, she also frequently writes about career, business and entrepreneurship.