Starting an online business gives you the freedom and the flexibility to work from anywhere. And, if you avoid these 10 mistakes, you could end up being really successful.
1. Lacking a solid business plan
One of the biggest mistakes we see entrepreneurs make is starting an online business without a plan. This can ruin your business before you’ve even got it off the ground.
When you’ve decided to start a business you should make a business plan. It contains your goals, information about your target audience, a market strategy, and budgets, and is your roadmap to success. Without a business plan, you are navigating blind and it’s much much harder to be successful.
See also: How to create a budget
Pro-tip: Update your business plan as you go!
A business plan is not a static piece of paper, but a plan for how to achieve your goals. If there are shifts in the market or your priorities change, you should update your business plan.
Here are 10 reasons why you need a good up-to-date business plan.
2. Ignoring market research
For most people there’s a lot of research to be done when starting an online business. It’s important to understand your market, your competitors and your clients’ needs so that you can tailor your product or service. If you don’t do market research you might end up trying to sell something nobody wants or operating in an oversaturated market.
Many people think market research is difficult and time consuming. It doesn’t have to be!
When you have an online business, you can reach a much bigger target audience, but it also means you have more competitors. Start by mapping out which other businesses offer the same service or products as you. You should also do due dilligence on your target audience. Having a smaller target audience and a more tailored product can actually help you stand out more than if you try to target everyone.
3. Underestimating the importance of branding
Your business name and branding shouldn’t be just a spur of the moment idea when you’re starting an online business. Your brand is your business’s identity. It shapes how clients perceive you and can set you apart from your competitors.
Branding can be anything from your company name and logo, to your visual identity, communication strategy, availability and tone of voice. Make sure to use your market research when building your brand.
Set up a style guide for yourself—and for future employees. You can take some inspiration from Mailchimp’s style guide.
See also: How to build a strong brand for your startup
4. Not focusing on customer experience
An exceptional customer experience is key to retaining clients and generating referrals and positive feedback. If you don’t provide good customer service, if your website isn’t user-friendly, and if the purchasing process is difficult, it can drive potential client away, even if your product or service is top-notch.
What good customer service looks like will depend on what types of products and services you’re offering, but here are some of the main things to focus on:
- Have all the necessary information available on your website. If you have an online store, you should have information about shipping, delivery, and returns, for example.
- You should always have a way for customers to contact you, whether it’s a form on your website, a chat window, an email address or a location where they can turn up to get help. Ideally, it should be a mix of these, so that client’s can get help in a way that suits them.
- Ask for feedback, both positive and negative. This shows your clients that you care about their opinions, and it’ll help you make adjustments to your products, services and customer support so that you can ensure more satisfied customers.
We recommend trying to purchase your own product or service. This is often called a service safari. Think about what you would search for if you had the client’s problem. Then see if your website fits those expectations and answers the questions you would have in that scenario. Go through the actual purchase process. See what kind of information you get before, during and after the purchase—make adjustments where you see gaps or imprecise information.
Doing these improvements can also reduce the amount of people reaching out to customer support and can increase your conversions rates, so it’s well worth the effort. Read more about how to do a service safari.
If you want your customer to have a great impression, you have to make them feel like you would walk the extra mile.
See also: Customer service tips for small businesses
5. Poor financial management
Poor financial management can sink a business faster than anything else.
Make sure to set up budgets and keep track of expenses and income. It’s a good idea to plan a head, and think about what to do in case of unexpected costs. It’s usually a good idea to budget with slightly higher costs and slightly lower income than you expect.
You should definitely have a liquidity budget so you can make sure that you have enough money to cover your costs.
Keep in mind that it can take some time before your business starts making money, and you might have a lot of expenses in the start. You need equipment, software, maybe you’ll pay a graphic designer for a logo and get help to set up a website and so on.
Try to look for free options where you can—at least until you’ve found your footing.
See also: How to make a budget – the ultimate guide for businesses
6. Trying to do everything yourself
Many new entrepreneurs fall into the trap of trying to do it all themselves marketing, accounting, web development, customer service, and more. This approach can lead to burnout and take away focus from the core aspects of your business.
Try to figure out how you can work most effectively. It might be more effective to hire someone—even if that’s comes with significant cost—or to outsource some tasks to a freelancer or contractor.
Delegating tasks or outsourcing to professionals means you can focus on what you do best. And it can also help you make money in the long-term!
7. No marketing
Even the best product or service won’t sell if no one knows about it. Create business accounts on relevant social media platforms, and make sure to keep them updated. Many online businesses get their clients from Instagram, Facebook or TikTok. It’s a way of both establishing a brand and of selling your products and services.
When you have an online business, it’s essential to have a website and/or social media page to sell your product or services.
If your business is already growing quickly, you should still look for more ways to market it. Relying solely on organic traffic can severely limit your business’s growth. Do some research and see if there is any way you can promote your business with ads or paid advertising, or even by getting influencers to talk about it.
If you don’t know how to promote your business in the best way, there are many marketing companies out there that can help you.
This is how to use social media to promote your business.
8. Setting unrealistic expectations
You sometimes hear stories of online businesses achieving overnight success, but that’s the exception, not the rule. Behind every success story, there’s usually a lot of hard work, planning, and dedication.
Don’t be surprised if you have to work more than ever in the first months or maybe even the first year—depending on what type of online business you run. Figure out what your weakness are and work on improving them: Whether it’s your sales technique, your cash flow management or getting payments from clients.
See also: 7 tips to succeed as an entrepreneur
9. Not optimizing for mobile
A large portion of people access the internet using their phone: In 2024 63% of internet traffic was via phones. That’s why it’s crucial that your website is mobile friendly: A website that doesn’t work well on smartphones and tablets can mean both loosing customers and ranking lower in search engine results.
When you do your market research, you should make sure to include information about what kind of device your target customers rely on. For example, if your typical customers are in their twenties, they’re most likely using their phones and not a computer. If your typical customers are retired, they might prefer using iPads.
10. Being afraid to ask for payment
How do your clients pay for the products you sell? You might have an integration with Stripe, PayPal or Google Pay, but it’s also a good idea to offer your customers the option to pay via invoice. This is the preferred way to pay for B2B sales; if you target businesses, you should have invoice as one of your payment options.
If you offer this payment method, you should make it a habit to send an invoice as soon as you’ve sold your product. This increases the chances of getting paid on time.
See also: Be the first to get paid
Need to send invoices? Do it for free
With Conta, you can send an unlimited amount of invoices for free. Just enter the client details and the products you’ve sold. You can send via the invoice software or download as a PDF.
You can even send invoices on the go with the free mobile app.
Regardless of how you your customers pay for your products, it’s important to make sure that they do pay. Many small businesses avoid sending payment reminders or following up with customers. However it’s important to reach out to ensure that you get paid: Try using this email template to reach out.
Good luck with starting your online business!
