In 1995, Robert Metcalfe, the inventor of the Ethernet, wrote an article in which he said, “I predict the Internet will soon go spectacularly supernova and in 1996 spectacularly collapse.” Despite the rigours of the dot com bubble bursting at the end of the 20th century, consumers spent $2.86 trillion online in 2018, flying in the face of Metcalfe’s prediction. Online businesses now report earnings in the millions, and growth in the industry is only expected to continue as more and more people worldwide gain internet access. The time is certainly ripe for entrepreneurs to enter the market, but the many that do often fail before they even have a chance to get started by repeating the same avoidable mistakes.
Having A Weak Business Plan
Ideas are good, but for ideas to progress to reality, a plan is required. At every stage of a business’s development, from inception to securing funding to marketing, there will be moments where the idea for the business is tested. Whether it is investors, potential employees or future customers, any serious stakeholders will want to see more than just a flashy idea. They will want to know that the business is backed up by long-term thinking, that the potential for both growth and decline has been considered, that it will pass muster when it reaches the market analysis phase or competitive analysis phase, or any of the other elements that go into creating a successful start-up.
The United States Small Business Administration has found that around half of all SMEs will fail in the first five years, and one of the main reasons for this is their failure to generate enough income. This is not to say that a company needs to generate a return from day one or from the moment they open for business – it took seven years before Amazon achieved a significant profit, after all. But generating income, either from investment or by achieving high enough levels of revenue to cover expenses, is essential for keeping a business going long enough for it to become successful.
Failing To Identify Your Audience
There are few industries who can boast a more diverse customer base than those based on the internet. Everyone with a social media presence or even a mobile phone can at any point be exposed to all manner of advertising and promotions. The problem this causes is that many online start-ups have difficulty identifying who their target audience is – and, as a result, spread themselves too thinly across social media, blanketing all possible platforms rather than focusing on the people they actually want to reach.
Hiring Or Not Hiring
When it comes to hiring, business owners often make two common mistakes: refusing to hire anyone, or hiring the wrong people and experiencing shortfalls later down the road due to lack of commitment or experience. A company’s first few hires will set the tone for business development, so it is imperative to make the right choices. Collaboration