9 Reasons Why Online Businesses Fail + Tips to Help You Succeed

Launch Your Online Business in Just 7 Days

No business intentionally strives to fail, so why is it that small businesses have a staggering 70% failure rate?

In this post we’ll:

  • Discuss the top 9 reasons why most online businesses fail
  • Provide some useful tips to ensure that you avoid making the same mistakes

Plus, you’ll learn about the best all-in-one tool to ensure you’re part of that 30% that succeeds!

Shall we get started?

1. The top 9 reasons why online businesses fail

top 9 reasons why online businesses fail

The lifecycle of most startups looks something like this:

  • Year 1 — Approximately 20% fail
  • Year 2 — Another 30% will have failed
  • Year 5 — 50% will have failed
  • Year 10 — 70% will have failed

Running an ecommerce business has an even higher failure rate (90% of ecommerce businesses fail within the first 120 days!).

The question is why, and how can you avoid taking your business down the same treacherous road?

Let’s find out.

1.1. Lacking basic business knowledge

Technology has made it possible for anybody to start an ecommerce website or an online business without any business background.

But many of them end in tears because starting a business venture requires that you know quite a bit about what you’re getting yourself into.

This is why the most successful companies are generally founded by those in their 40sthis is common for 2 reasons:

1. It takes experience and knowledge to run and grow a business.

2. These people have more financial obligations, and they’re more likely to have savings.

Regardless of your age, you’ll learn a lot along the way, but you should aim to get a good idea of how to run a business before you dive in.

The best way to learn is to tap into the endless stream of knowledge on the internet, and we’ve got the perfect place for you to start!

Our blog can teach you everything you need to know.

1.2. Failing to analyze the needs of your target audience

This is a common mistake made by startups — if there’s no true need or desire for what you’re offering, then you’ll have a hard time selling it.

Knowing how your product will solve a pain, problem, or desire will help you position your product in the market.

You need to do ample research on your niche and your potential customers’ needs to know how you can help them.

Even massive companies like Starbucks have made this mistake — they lost $105 million in Australia as a result of failing to accurately analyze the needs of the Australian coffee consumer.

More than 70% of their chains had to be closed down, with the remainder being situated in areas where tourism is high.

As a startup or a small business owner, you simply can’t afford to make the mistake of failing to analyze the needs of your audience.

1.3. Avoiding competition like it’s the plague

A staggering 35% of startups go under due to lack of a market!

Don’t make the mistake that many startups make by steering clear of niches with competition.

Indeed, you don’t want a niche with an oversaturated market, but competition is good, and it's necessary!

Competition shows that there’s a demand for the product or service — no competition is usually a sure sign that there’s no need for it.

1.3.1. Tip 1 — Choose a profitable niche

The niche you decide on will depend on what you have an interest in — here are 8 of the top niches in 2023:

1. Travel

2. Personal development

3. Pet care

4. Fitness and weight loss

5. Dating and relationships

6. Making money online

7. Natural, organic care products

8. Software solutions

Not only should you find the niche interesting, but ideally you want to choose a profitable niche.

For more on selecting a niche, click here.

Choosing a niche and finding what your ideal audience needs is important — but you also need to pinpoint what makes your product or service stand out.

1.3.2. Tip 2 — Find what differentiates you from your competitors

Standing out in a market where there’s competition doesn’t mean that you need to reinvent the wheel.

All you need to do is put a twist on what’s already been done and focus on solving a pain or desire better than your competition.

For example, our software (systeme.io) is one of many all-in-one marketing tools, so how do we establish a strong position in the market?

Simple. We provide unbelievable value that many of our competitors overlook, for example:

1. We offer a Forever-Free plan that offers online startups all the tools they need to launch their businesses.

2. Our paid plans are far more affordable than that of our competitors.

3. We offer a true all-in-one solution that, unlike our competitors, means that our users don’t need to struggle with costly integrations.

These are some of the unique selling propositions (USPs) of our business — what makes your product or service stand out from the rest?

1.4. Having a poor digital marketing strategy

To run an online business, you need an effective online marketing strategy.

Narrowing down on a specific audience but then failing to effectively market to them is a waste.

How must potential customers know your product even exists if it's never put in front of them?

For startups especially, you need to increase your brand awareness and online search visibility to increase your reach, and ultimately your conversions.

14% of businesses fail because of poor online marketing or a lack of a marketing strategy altogether.

This doesn’t sound like a lot, but considering the number of available channels — it’s too much.

1.4.1. Tip 1 — Leverage several online marketing channels

You must find where your audience likes to spend their time to ensure you’re maximizing your reach.

These are some of the many ways that you can reach your audience:

Tools like systeme.io let you build your website and blog, send email marketing campaigns and newsletters, and more (for free!).

Be sure to make use of the channels and tools that are made available to you — because there’s no doubt that your competitors will be!

1.4.2. Tip 2 — Make email marketing key to your marketing strategy

Unsurprisingly, more than 87% of businesses use email marketing to reach their customers — it's fundamental to any business’ marketing toolbox!

Here are some of the reasons why you should use email marketing to get your business on the path to success:

  • Email marketing has a very high return on investment (ROI) of $42 for every $1 spent, that’s an ROI of 4,200%!
  • With 4 billion daily email users, you can reach a worldwide audience through email
  • Generate new customers more effectively than social media (although you should use both!)
  • It’s an easy way to nurture your relationships with existing customers and to build relationships with leads
  • Promote your special offers, and provide your audience with valuable content to boost your sales

Click here for a step-by-step guide on setting up an effective email marketing strategy.

1.4.3. Tip 3 — Don’t underestimate the power of social media

There’s a pretty good reason why so many businesses use social media sites in their digital marketing strategy.

With 4.48 billion people using social media, it’s fantastic for reaching a very wide audience of potential customers!

But it shouldn’t be the main driver in your online marketing strategy.

Instead, it’s best practice to use social media as a means to complement your other marketing strategies.

Your business (whether it be an ecommerce store, physical store, or any online business) can leverage these channels to:

  • Build a solid online presence and a community around your brand
  • Connect with your audience on a personal level, and get a better understanding of their interests
  • Drive traffic to your website, and increase your sales
  • Provide your customers with support

You don’t even need to invest in paid ads to make it work — you can grow your page by simply:

  • Posting regularly
  • Engaging with your followers
  • Posting interesting and relevant content

The quality of the content you produce (whether it’s on your blog, website, social media sites, etc.) is crucial to your success.

1.5. Producing poor quality content

Nothing deters customers more than poor-quality content — this can impact your brands' reputation beyond repair.

Every communication opportunity that you have with your audience should provide them with value.

Producing high-quality content will:

  • Ensure that you gain the trust of search engines, as well as your ideal customer
  • Boost your online visibility and your chance of acquiring new customers
  • Encourage shares and engagement

Plus, as a result of the above, you’ll also increase your sales — startups can’t afford to damage their reputation with poor-quality content.

So let’s get into some of the main things you’ll want to consider when creating content.

1.5.1. Tip 1 — Focus on helping, not selling

Today, people are highly deterred from the standard sales pitch.

If your focus is on selling, then you’ll give potential customers the feeling that you’re in it for you, not them.

And this is an effective way to drastically kill your sales and your business.

All of your marketing efforts should focus on the benefits that customers will experience from using your product or service — people buy benefits, they don’t buy features.

Here you’ll learn the difference between features and benefits with some examples.

1.5.2. Tip 2 — Other ways that you can provide value

Here are some of the many ways that you can provide your audience with value:

  • Be authentic
  • Publish regularly, and update any outdated content
  • Post original content on trending topics
  • Do walkthrough videos (if you sell digital products) or unboxing videos (for physical products)
  • Host live webinars to answer any questions that your customers or leads might have
  • Create in-depth how-to guides
  • Do comparison posts of how your product or service compares to that of your competitors

You can also use lead magnets — these are perfect for building your email list and establishing trust with your leads.

Put simply, you’ll offer something valuable and free in exchange for your lead’s email address.

Here’s systeme.io’s lead magnet:

 systeme.io’s lead magnet (a free ebook)

systeme.io’s lead magnet (a free ebook)

Lead magnets can also include things like:

  • Recipes
  • Samples or free trials
  • Tutorials or guides
  • Online courses
  • Webinars

Click here to learn:

  • How to create one
  • The necessary components of a successful lead magnet
  • Where you should place your lead magnets

There’s so much more that you could do, so get creative, and make sure everything you produce provides value.

1.6. Ignoring the importance of SEO

Google gets 76% of all global searches — with a mind-boggling 3.5 billion Google searches occurring every single day!

Failing to acknowledge the importance of search engine optimization (SEO) is one of the main reasons why so many startups take a tumble.

An effective SEO strategy is crucial to increasing your search engine visibility and your traffic — which of course increases your conversions!

But if your website or blog ranks on page 5 of the search engine results pages (SERPs), it’s highly unlikely that people will find your content.

Make sure SEO is a huge part of your online marketing strategy!

1.6.1. Tip 1 — Create SEO-optimized content

When you’re writing content optimized for ranking high in the search engines, you should consider:

By ranking for certain keywords related to your business and the searches your ideal customers are making, you’ll get organic traffic to your website.

These are some of the places where you can find what people are asking online:

You’ll also want to sprinkle in some related keywords to make it easy for Google to understand what your topic covers.

2. Create content in line with the search intent

This is crucial to remember when writing your content — what is it that your audience is hoping to learn from your content?

Your content should be hyper-focused on the search intent.

3. Linking

Your posts should include at least 4-5 internal and external links (ensure that any external sources that you link to are reputable).

Besides offering several links where relevant, you also want to go through your content to ensure that there are no broken links.

4. Optimize your content for user experience (UX)

User experience is super important.

For this you’ll want to consider several things, for example — is your content:

  • Easy to read?
  • Broken up so that readers don’t have to read through giant walls of text?
  • Structured sensibly?
  • Is it compatible with all devices?

5. Write captivating introductions and titles

Great content hooks a visitor from the second they land on your page.

Make sure your introduction and titles are enticing to encourage those who stumble on it to continue reading.

To know whether your title is a winner, you can use a free headline analyzer tool like CoSchedule.

For a guide on creating high-quality content that’s optimized for SEO, click here.

1.7. Business plan problems

Failing to develop an in-depth business plan was found to be the reason why 78% of small businesses failed.

To not have a plan in place, is to plan for failure.

A business plan will give you a solid foundation to help you determine what needs to be done to ensure that your business goals are met.

The goal of your business plan should be to:

1. Get a clear idea of what it is you want to achieve.

2. Know how you’ll achieve those goals (create a detailed list of steps you need to take, as well as the cost estimates for each).

3. Consider any potential hiccups that may present themselves along the way.

4. Come up with possible solutions to these hiccups.

When it comes to your business plan, you’ll want to avoid the following:

1. Try not to set unrealistic goals, this will do nothing but discourage you.

2. Don’t wing it — stick to the plan! If you find it inaccurate, adjust it.

Avoidable mistakes such as overspending can severely impact the success of your business — you need a business plan!

For more on how to create an effective business plan, click here.

1.7.1. Tip 1 — Manage your cash flow effectively

Of course, maintaining a healthy bank account is crucial to your success as a business owner.

With 29% of startups failing to effectively manage their cash flow, you must know where every penny goes and where it comes from.

You always want to:

  • Keep costs low, and eliminate any unnecessary spending
  • Ensure that you have a cushion to land on in times of financial trouble
  • Consider the cost-benefit of every single expense
  • Create a detailed forecast to remove the guesswork out of your business’ growth

Keeping your bookkeeping system organized is important — if this is something that you’re not particularly equipped for, fear not!

Hiring someone to manage your books isn’t unnecessary spending.

1.8. Failing to adapt to the ever-changing world of digital marketing

Sometimes the fear of change is what causes businesses to fall behind and crumble at the hands of their competitors.

With your competitors constantly adapting to change, you can’t afford to remain rigid.

A fine example of a business falling behind is Blockbuster — their demise was purely from a failure to adapt to the needs of their consumers.

From boasting a company valuation of $3 billion and 65 million registered customers to being bankrupt in 2010 with almost $1 billion in debt.

Blockbuster simply failed to keep up with its competition (Netflix).

Google’s algorithms are also constantly changing — failing to adapt your SEO strategy can hinder your success.

You’ll want to keep a close eye on your audience, your competition, and any SEO trends and changes.

1.9. Not having a user-friendly website

As a startup, you can’t afford to make your website look untrustworthy.

These are some of the reasons why web users click out of a website:

  • There are far too many intrusive pop-ups to make users feel that they can browse safely
  • Slow page load times (40% of consumers will leave your website if it takes more than 3 seconds to load)
  • Unprofessional website design (bad grammar, visual clutter, etc.)
  • The website isn’t optimized for all devices
  • There’s outdated or unreliable information
  • No clear call-to-action (CTA) or no CTA at all

If you run an ecommerce website, slow load times can severely impact your bottom line.

If your ecommerce store makes $100,000 a day, a 1-second page delay could potentially cost you $2.5 million in lost sales every year!

Here are some ways that you can decrease your page load times.

You’ll also want to make sure that you’ve got a clear path set up for your consumerssales funnels are the way to go here.

To avoid any friction, a sales funnel will guide visitors through the entire sales process.

This ensures that your potential customers aren’t left wondering, “what’s next?”.

With a tool like systeme.io, you can do everything you need to do to succeed, with ease — let’s get into what our tool has to offer you.

2. Prevent failure with the best all-in-one tool: Systeme.io

systeme.io logo

systeme.io logo

Running a successful business and online store doesn’t have to be hard work.

By using a tool like systeme.io, you can let our software do all the heavy lifting while you focus on more important tasks.

With every tool you need to launch, grow, and scale your online business — systeme.io will set you up for success.

Let’s take a closer look at what you’ll get with our platform.

2.1. Systeme.io’s features

Systeme.io has a suite of powerful features that all integrate seamlessly to help online startups:

  • Establish an online presence
  • Boost their brand awareness
  • Attract customers to their website

And so much more!

Systeme.io has every business-building tool that you need to make managing your business an absolute breeze!

With our platform you get:

  • Website builder — With our templates and drag-and-drop editor, you have easy control over your website’s visuals
  • Unlimited blogging — Create a blog to attract visitors to your website
  • Affiliate marketing — Reach your ideal customers, and boost your brand awareness with your very own affiliate program
  • Sales funnels — Create funnels in a matter of minutes to effectively guide your customers through the entire sales journey
  • Email marketing — Create email marketing campaigns, send newsletters, segment your list, and streamline your marketing efforts with powerful automation
  • Course builder — Create, market, and sell your online courses effortlessly and all in one place, and offer dripped or full access to the content
  • Sell products — Become a drop shipper, or sell your own digital or physical products

Everything you need to succeed in one neat tool!

Click here for a closer look at what we have to offer.

2.2. Systeme.io’s pricing

For many small business owners, startup costs are a major concern — but building your online empire doesn’t have to put a dent in your pocket.

Not only do we offer a Forever-Free plan, but our paid plans are kitted to help you grow at an incredibly affordable price:

systeme.io’s pricing plans

systeme.io’s pricing plans

All of our plans (including our Free plan) give you unlimited:

  • Email sends
  • Blog posts
  • Membership site members
  • File storage space

Plus, you can:

  • Run your own affiliate program
  • Create deadline funnels
  • Get 24/7 email support
  • Integrate with PayPal, Stripe, Zapier, or ActiveCampaign

Our Free plan is free for as long as you need it to be, and with it you get:

  • Space for up to 2,000 contacts
  • 3 sales funnels with 10 funnel steps
  • Create a blog and a website
  • Create an online course
  • 1 automation rule and workflow
  • 1 contact tag
  • Create an email campaign
  • 1 custom domain

And more!

3. Conclusion

Knowing what mistakes to avoid and what tools and methods to use will help you get your business in that top 30% that succeeds.

Knowledge is power — are you ready to implement what you’ve learned with a tool geared to help you succeed?

With systeme.io you can launch, scale, and grow your online business without the hefty startup costs, you truly have nothing to lose!

Sign up to systeme.io for free today with our Free plan — no credit card details are required.

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