Starting an online business can be an exciting and rewarding venture but it also comes with its own challenges. Nowadays, having an online business can be highly rewarding, it is a major source of promoting and selling your products or services.
Many entrepreneurs make fundamental mistakes when starting an online business, from underestimating the level of competition to failing to understand their target audience.
These mistakes tend to hinder the success of these businesses and even lead to failure in the long run. It is essential for entrepreneurs to be aware of these common pitfalls and take proactive steps to avoid them. Let’s look at some reasons why entrepreneurs fail at operating an online business.
Not Conducting Market Research
One of the biggest mistakes that entrepreneurs make when starting an online business is not doing enough market research. Starting an ecommerce business simply means understanding the needs and wants of your target audience, as well as the competition in your industry before you begin.
Not conducting proper research will make you launch a product or service no one wants or needs which can lead to total breakdown.
There are several e-commerce companies in Nigeria that conduct market research to understand the needs and preferences of their target audience.
Not Paying Attention To Your Expenses
Not paying attention to your expenses when starting an online business is a common mistake among entrepreneurs. Many companies have been ruined through uncontrollable expenses. Every new internet entrepreneur pays attention to their cash flow.
It is important to keep track of your expenses to ensure that you are not overspending and to help you make informed decisions about your business.
For Instance, ‘Dealday’, an online marketplace launched in Nigeria in 2011 which was one of the pioneers of e-commerce in Nigeria that attracted significant investment from local and foreign investors. It reportedly struggled with overspending and faced stiff competition from other e-commerce players such as Jumia and Konga. In 2018, the company announced that it was scaling back its operations and focusing on other business ventures.
Poor Marketing and Sales Strategy
Many entrepreneurs go wrong in their marketing and sales strategy when starting an ecommerce business. A solid marketing and sales strategy is important to the success of any e-commerce business. Without it, it might be difficult to attract customers, generate revenue, and grow your business.
Poor marketing might lead to low visibility which will generate low traffic, poor customer acquisition and low conversion rates. It can also lead to inefficient use of resources, that is, spending money on marketing and sales activities that are not effective, which can waste your time and resources.
By avoiding the mistake of poor marketing and sales strategy, you can increase your chances of success in the highly competitive e-commerce market.
For instance, Jumia which is one of the largest e-commerce companies in Nigeria successfully captured a sizeable market share via its innovative marketing and sales strategies. One of the ways they started out was by launching an aggressive marketing campaign that focused on building trust and credibility with consumers. This included offering a secure payment system, providing a reliable delivery service, and ensuring a hassle-free return policy.
Expecting to make a quick money in little time
One flag in starting an online business is expecting to make money quickly in little time. An online business is a potential lucrative business, however, it takes time and effort to build a successful e-commerce business.
When your expectations are based on making quick money in little time, you are prone to have unrealistic expectations about your company’s success which can trigger frustration.
It can also make unsustainable financial risks as a result of overspending to generate quick results. By avoiding this mistake and focusing on the long-term success of your business, you can increase your chances of success in the highly competitive e-commerce market.
Wearing Too Many Hats
When starting a business, most entrepreneurs wear many hats, as they need to handle various aspects of the business themselves. However, there is a risk of wearing too many hats, which can be detrimental to the success of the business.
While starting out, it is risky to operate completely independently, without being with wise counsel and capable employees with the right skill sets.
Delegating responsibilities is crucial to the growth of the business. An absence of that might make the entrepreneur burn out and overwhelmed, thus, making you make uninformed decisions. Trying to juggle between one or two things can result in lack of focus and attention which is detrimental to the growth of the business.
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