Why do a majority of online businesses fail to earn profits and are forced to close down

During the recent online business boom, a lot of firms have made themselves successful by utilizing the massive potential of the internet and the immense outreach it guarantees to any kind of audience you want to target. It’s a place of massive opportunities and it is the fiefdom of increasingly profitable ventures. But during recent times there has been an alarming increase in the sheer number of how many online businesses fail to create any kind of impact and ultimately close down. The figure hovers around 90%, which is staggering and the fact that only 10% of ventures turn their online businesses into steady and profitable cash streams says loads of how rare are the qualities and acumen of those who make doing online business a successful decision.

Trends suggest that there a host of factors which account for the disproportionate numbers when we compare successes and failures in the realm of online business and here we will highlight some of the most important factors that weigh in the fate of an online business:

Emanating the Vision to the Client & Investors:

When it comes to success, vision plays a crucial role. A lot of businesses fail because they don’t give much importance to what their vision is for their business and how to resonate that vision to clients and investors so that cash streams from sales and funding opens up on a scale which is viable for the business. The main reason behind has been the inexperienced heads handling the business as envisioning a roadmap for the business requires a hefty amount of expertise in the field of operations to define things clearly.

When we talk about vision, we mean to define what strategy the business is going to pursue in its formative as well as successive years. What most visions lack is hindsight on how to keep the business going profitably in a stable manner and what is going to happen if things go awry marking the exit or revival strategy. Investor confidence not only relies on the ingenuity of the idea the business is going to exploit, rather making the investor believe that the people at the helm of the business can take this idea towards fruition by the successful execution of a predefined plan. Most online businesses don’t continuously attract investment on a larger scale to make the business grow and make its mark.

People don’t buy when they are confused or fearful, a cocky vision which is vague at best is a huge turn off for all kinds of people who can bring in cash to business. A look at how they function and snap! You’ve taken a decision on whether this is a place for your money or not. Its in that split second that you need to be extra cautious into making things clearer and more relatable.

Sell the Hole, Not the Drill   

A flawed marketing strategy, no matter how much money you put into it on a consistent basis, is going to get doomed sooner or later, but rest assured, it definitely will. People do not buy products, they buy solutions. When a person comes to your online store where you sell drills, its not the drill that guy is looking for, it is the hole in the wall he/she is looking for.

Making things is something highly different from creating value. The biggest and most successful organizations in the world thrive on the possibility creating from spreading the perception that they create value for the consumer instead of just manufacturing products. Perception on part of the buyer plays a huge role in all kinds of businesses and the same holds true for online businesses which require a lot more buyer confidence than conventional businesses to keep going ahead successfully. The already saturated market has made it even more important to distinguish your business from others competing in the same arena by personifying the value you create from the your marketing and advertising strategy, in turn accumulating clients and then retaining them for sustainable cash streams for the business.

A lot of online businesses have the tendency to blow their own trumpets on how great their products or services, forgetting the most important fact that the buyer needs to feel important and that is done by relaying the right information through your platform on how working with you can make the prospective client’s life easier by getting a certain thing done more easily.

Bad utilization of the resources available:

The internet marketplace has huge potential but the tools are to be chosen and used wisely instead of just throwing them around without a particular customer centric branding strategy is involved.  The online world is highly different from the conventional one as it uses quite a different set of tools to make you look relevant and help reach the right audience. These tools range widely of which the most popular ones are SEO, keywords, blogging, PPCs among others.

The biggest problem which makes online ventures fail is that they don’t value the strategy which creates a niche for the brand instead focusing on the massiveness of the campaign and being super consumed by the sheer numbers of eyeballs attracted. If the eyeball which is attracted doesn’t want to engage with your brand or is not your target market then it’s a waste of your precious cash resources.

When you do get a click through with the use of any of these tools, its down to retain that attention for as long as possible. For this you need to get a website that is not only responsive but also high in quality and design giving the visitor a sense of trust, composure and relevant information. Most websites are badly designed having ill placed calls to action, static pages and cluttering to name a few of the inherent flaws of such websites making the coming customer averse and starting to lose valuable money and gaining the chances of the business ending up in a failure.


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