Why Do Most Online Businesses Fail?

[Yelena]

My mentor Eben Pagan is doing a free teleseminar this Friday called "The 5 Reasons Most Online Businesses Fail and What You Can Do About It".

I don't know what Eben's take on this is (I'll find it out on Friday), but what's YOUR opinion?
Why do businesses fail online?

[Yuliya Mironova]

Originally Posted by Yelena

Why do businesses fail online?

The broadest heading will be "mismanagement" but this is perhaps too broad to have much meaning, on its own!

I suggest these are among the common reasons (and all of them could come under the heading "mismanagement", perhaps?):-

1. People don't set them up properly as businesses in the first place (including many people who are "following their own passion", and others without any bookkeeping/accounting experience who have failed to appreciate that they must either learn very quickly or outsource this function, and budget for doing so)

2. Undercapitalisation (including "unexpected cashflow problems", perhaps largely caused by lack of financial awareness/understanding)

3. Lack of market research about what people are actually willing/able to spend money on

4. Lack of a proper business plan and/or lack of commitment (the two are commonly associated, I think)

5. Disillusionment and frustration that "things don't happen quickly enough": I suspect that as many people greatly overestimate what they can achieve quickly as greatly underestimate what they can achieve slowly

Is Eben Pagan doing this in his own name or as "David DeAngelo"?

[avia4life]

You said it all so well!!
I think many people expect too much too soon also. To build a business and maintain a business requires you to treat your business like a business! That takes both time and effort consistently and repeatedly!

[Yelena]

Hi Yuliya!

in my mind, the list would look like this:

I would put your #3 in the first place - not knowing how to choose the right niche.

Second would be your #5 - lack of commitment and impatience.

Third, not knowing how to market. People come online from the off-line world where they don't know how to market their businesses either - all they do there is copy their competitors who don't know how to market themselves. That's a dead end, and everybody brings this approach online.

I need to think about what I would put in the 4rth and 5th places

P.S. Eben is doing this under his real name - he used "David DeAngelo" for one of his first businesses in the dating niche. That's what I love and respect about him - unlike most other "gurus" out there, he made his millions in a niche not related to making money online. That, in my eyes, makes him qualified to teach others.

[LA Grouch]

Originally Posted by Yuliya Mironova

The broadest heading will be "mismanagement" but this is perhaps too broad to have much meaning, on its own!

I suggest these are among the common reasons (and all of them could come under the heading "mismanagement", perhaps?):-

1. People don't set them up properly as businesses in the first place (including many people who are "following their own passion", and others without any bookkeeping/accounting experience who have failed to appreciate that they must either learn very quickly or outsource this function, and budget for doing so)

2. Undercapitalisation (including "unexpected cashflow problems", perhaps largely caused by lack of financial awareness/understanding)

3. Lack of market research about what people are actually willing/able to spend money on

4. Lack of a proper business plan and/or lack of commitment (the two are commonly associated, I think)

5. Disillusionment and frustration that "things don't happen quickly enough": I suspect that as many people greatly overestimate what they can achieve quickly as greatly underestimate what they can achieve slowly

Is Eben Pagan doing this in his own name or as "David DeAngelo"?

Totally agree.

I also would like to add... conflicting information. Many (new) people do research before jumping in but where are the "checks and balances?"

Quite a few "Experts" are not what they appear to be. Unfortunately it takes time to distinguish the Prophets from the Profiteers.

[Yuliya Mironova]

Originally Posted by Yelena

he used "David DeAngelo" for one of his first businesses in the dating niche. That's what I love and respect about him - unlike most other "gurus" out there, he made his millions in a niche not related to making money online. That, in my eyes, makes him qualified to teach others.

Ooh, thanks - I didn't know any of that. I do take your point. You want to be taking advice from people who have actually done what you're trying to do, rather than just from the usual people who say "Listen to me because I'm an 'expert' " whereas what they're really an expert at is mostly telling people that they're an 'expert'.

Looking forward to hearing about it later!

[Yelena]

Just got a link to the first free training from Eben - it's an hour long video training that covers the specific mindsets, the obstacles and the action steps you need to take if you want to have a successful online business.

It's an actual session from his "Ignition" training program he is launching soon.

Ok, I'm off to watch it!

[AlisonMSmith]

Great list, Yuliya.

I'd add lack of effective marketing. I do a lot of reading about business models and it's pretty astounding how many times a company that is a huge hit, was preceded by a company doing almost exactly the same thing without success. Many times the difference was finding the target consumers.

Originally Posted by LA Grouch

Quite a few "Experts" are not what they appear to be. Unfortunately it takes time to distinguish the Prophets from the Profiteers.

Great line, Grouch. I've always had a singular issue with what I call "circular success." I'm getting rich telling you about how to get rich. It's like the envelope stuffing scam of the the new generation.

[jeffie]

I too feel that its due to lack of promotion...through net its very easy as well as that difficult to reach out to each and everyone.a business is in general promoted very well through other media as it is presented to all at once irrespective of their purpose with it...so the promotion becomes broader,whereas in net that way it gets narrower

[beautifulsoul]

A really good topic. So many good responses. Here's my list. I'll try not to repeat to much of what's been said.

1. People give up too fast. They don't get the results they expect to get in a certain time frame so they quit. They are naive about the time and persistence that has to be put into work for it to suceed.


2. A lot of people want the money but aren't willing to do the things it takes to get it.

3. People are looking to get rich quick so they invest into things that may not be a logcal investment. Especially in these times of desperation.

4. They don't constantly educate themselves on how to push themselves futher. Not to mention there are always new ways to promote etc. Business is a never ending learning process.

5. They haven't done enough research on their field. So they jump head first without truely knowing what they are getting themselves into. Research, research, research and looking at the business from every angle before jumping in is essential. I personally don't like surprises.

Not too much to add because it's all been said.