This year, thanks to COVID, lockdowns, and many millions of people losing employment worldwide, there is a tsunami of businesses of all forms and feasibility flooding online.

 

Under the best of conditions, only 78.5% of businesses survive their first year, according to the US Small Business Administration.  This year that number is predicted to be worse because of the frenzied rush to business by desperate, unprepared people and the resulting chaos in the online marketing arena.

 

Here are 10 kiss-of-death mistakes that you need to avoid when starting your online business to help ensure you are among the survivors.

 

1 –  Not having a well-defined solution to a genuine pay-worthy problem

The benefits of your solution to the customer must be compelling and easy to understand.  Optimally, that benefit should be summarizable in a single sentence.  Bottom line: your business  must provide a solution to a problem or satisfy a need for people to give you money.  If you cannot articulate a solution you provide, you are not ready to start a business.

2 – Not knowing who you are selling to

Call it a client avatar, your ideal customer, your target audience – it’s all the same concept and you need to have that dialed in.  One of the common pitfalls for the new entrepreneur is to want to sell to everybody.  In business, selling to ‘everybody’ is selling to no one.  Your vision of your perfect client informs everything from your product or service itself to the look and feel of your website, the wording and tone you use in your marketing and your social media, the online tools you use with clients, where you find your client audience, your sales process, how you show up online – everything!  To try and be everything to everybody is virtually impossible and you’ll go broke trying.

3 –  Having no plan

Not knowing your specific target market, how you will reach them, what your ultimate goal is for your business, or having actionable steps to get there.  While the traditional multi-page business plan is becoming somewhat obsolete for those not seeking funding and investment, having a document that records the salient details of the business is critical.  Your streamlined business plan is for more than funding.

This document, outlining the structure, the operation, the key decisions, and future path, is invaluable for your own records down the road when expanding the business, or hiring employees or contractors for rapid understanding of what they are working with.

4 – Getting lost in the weeds 

Focusing too much time and energy on small details that are not enhancing lead generation, sales. or growing your business is deadly.  Think of starting your online business as building a house when winter is setting in.  You need to get the four walls and a roof on that thing to allow you to get operational and stay covered while you build out the rest of the house.  The water feature in the back yard can wait until spring.  Getting mired down in the minutiae that can be taken care of when the business is more established wastes your precious time. This languishing is often a result of not having a clear actionable path forward. Pro-tip: while social media can be a rich source of leads, it can be also be a serious ‘getting lost in the weeds‘ scenario

5 – Trying to do everything yourself

The exact same characteristics that draw you to entrepreneurship usually come with a strong ‘do it myself’ streak.  Another reason for trying to do it all yourself is worrying about money. However, you need to remember – the clock is ticking. The longer you take to get to revenue generation, the more money you are actually losing.

In addition, the set-up phase is exhausting.

Motivation and drive are not inexhaustible resources; you’re going to need it for the long haul.  Don’t squander it  on the small stuff.

6 – Undervaluing what you are selling

It’s hard, particularly if you are coming from an employed position or even gig-work, to not think of the value of your product or service in terms of the hours involved.  What you are charging for is the outcome – the transformation you achieve for your client.  Or, another way to think of it, popular with IT professionals is, “If I do a job in 30 minutes it’s because I spent 10 years learning how to do that in 30 minutes. You owe me for the years, not the minutes.

7 – Giving away too much

This is a problem at the confluence of two currents; new online entrepreneurs too often feel the need to build up their credibility with free service AND the internet, awash with apparently ‘free’ stuff, has conditioned people to expect everything for free, or nearly free.  Turns out, bending to your inclination to give it away is an enormous mistake. As millionaire entrepreneur, Ramit Sethi, found “People don’t value the things they get for free.”

8 – Ignoring the customer experience

Doing business online doesn’t decrease the need for great customer service; if anything, it increases it.  You are still dealing with people and they want a satisfying, respectful experience. You need to provide intuitive interfaces, user-friendly processes, concierge-like on-boarding, and any relevant touches that will have your clients thinking what a great choice it was to invest in the solution you offer. Your clients are the backbone of your whole business. You have invested time and energy courting them for the opportunity to have this relationship with you; they said ‘yes’ but you never want to give them reason to question that decision.

9 – Not having a network

It is a newbie mistake to look at successful businesses and assume that the high-profile entrepreneur did this all by herself.  Just like it takes a village to raise a child it took a whole network of support, collaboration, advice, and guidance for that entrepreneur’s business to survive and succeed. You need your tribe, your clan or your network – whatever you want to call it.  You need your veteran mentors, your cheerleaders, your peers that will push you, inspire you and keep you learning, growing and moving forward – you need that core of people who believe in you and what you are doing.  The wisdom, motivation, support and accountability of a good network is invaluable for your business success.

10 – Underestimating the time and commitment it takes

Building a business takes time and a truckload of grit.  While it is one of the most exciting things you will ever achieve, creating a successful online business will challenge you and make demands on you that you need to be ready for.  Knowing this right upfront and having the tenacity to stick with it is key.  I would have to agree with Alice Chan of Xero that “[online] business owners should be aiming to achieve work/life integration, not work/life balance.”  All the more reason to make sure you have that network I mentioned in #9 NAILED!

 

All the best with starting your new online business!

 

You can join us at Get Seen and Heard to Grow Women’s Collaborative for women growing their business with podcast guesting.

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