Why Are People So Unsuccessful in Online Business?

The unfortunate reality is that most businesses linger at a hobby level for a few months or years before eventually dying. Very few make it to a level of success that provides a full time income.

I've consulted for, watched and worked with many people in the online business world, beginning in 1991 when I sold my first piece of software via the old bulletin board system, an early predecessor to the internet. Today, I am a full time online entrepreneur.

Here are some of the most recurring themes I see in failing online businesses:

1. Too much focus on the service or product- Those new to developing a business spend a lot of time thinking about and developing their service or product, while they spend considerably less time figuring out what their market niche and business model is, or how to market their product. Yet niches, business models and promotions are more important to success than the product itself.

2. Lack of perseverance- A large number of people get started, create a web site and then instantly lose interest when their new site does not immediately generate thousands of dollars each month. The hard truth is that it takes time to build an audience, and patience to create a solid foundation for your business. There isn't a magical catalyst that will suddenly propel a site to success, but often dozens or even hundreds of smaller actions you take over months or years that add up to generate a significant profit.

3. No concept of online marketing - As crowded as the internet is today, it can be hard to get someone's attention when competing with several billion web pages, much less keep someone's attention for more than about 15 seconds. Online marketing, copy writing and building an audience is not the same as it is with traditional media. I've watched clients obsess over fonts and images, but spend zero time on search engine optimization, copy writing, audience building, email list management and other critical online skills.

4. Inability to manage growth - When success does come to an internet business, it often comes in large waves, which can be quite overwhelming. However, the first Tsunami of traffic and orders will frequently wipe out a business and its owner in the process. The success they worked so hard to achieve becomes a noose around their neck as they are unprepared to hire employees or buy equipment, and instead insist on continuing to do everything themselves. A good friend of mine has been stuck in a cycle like this for over a year. Rather than creating a new structure for his business that outsources as much work as possible, he continues to dig a deeper hole for himself.

So if you want to build a solid foundation for your new online business, carefully consider your market niche, your business model, your online marketing plan, how long you're willing to stay the course and how you will manage growth when it does come. With the all right systems in place, many of these issues can be mitigated at the startup of a new business, rather than waiting until they become a crisis.

Do you have thoughts on why businesses may succeed or fail? Leave Brad a note at OnlineBusinessZen.com






Brad Smith hosts the Online Business Zen podcast on iTunes, and blog at OnlineBusinessZen.com. He is a full time entrepreneur and published author with a successful internet business. Brad is focused on helping others earn money online without the usual "get rich quick" hype. If you want to start your own internet business today, you can subscribe to Brad's free newsletter - and he'll send you an email once a week showing you how to get started.