Online Business Mistakes To Avoid?

Updated: April 4, 2024
by Ray Alexander

There are some common online business mistakes to avoid. If you scroll down this page and just skim through the headings, you might say "yeah, pretty obvious". Yet many internet marketers fail to identify these mistakes and waste a lot of time before they get on the right track, or worse still, many of them give up every year.

Online business mistakes to avoid

Because starting an online business is easy, it is possible for anyone to "learn as you build". Just jump right in, start promoting your business using whatever the platform and methods that are available at the time. Blindly in the beginning and gain your knowledge and skill from the experience as you go along. But...

...But if you cannot visualise the future of your business, you cannot visualise your income either. Agree? So the first one of common online business mistakes is about - you guessed it. Planning!

Ignoring Market Research

70% of failed online businesses didn't focus on market needs.

Market research helps you understand who wants to buy your product and why. Think of it like going fishing and knowing what kind of fish are in the pond and what bait they like.

For example, if you're selling eco-friendly water bottles, you'll want to know that your target customers are probably environmentally conscious and prefer online shopping.

To avoid this mistake, you could survey people about their habits and preferences. For instance, finding out which social media platforms they use most could guide where to focus your advertising efforts.

Underestimating the Competition

65% of businesses find their biggest challenge in online visibility against competitors.

Knowing who you're up against is crucial. It's like being in a race and knowing who the fast runners are so you can plan your strategy accordingly.

If you're opening an online bookshop, and there's already a big player with speedy delivery and great prices, you need a unique angle, like specializing in rare books or offering personalized reading recommendations.

Avoid this mistake by doing a deep dive into your competitors' strengths and weaknesses, then find your niche. Maybe your bookshop can host virtual book club meetings, creating a unique community feel.

Neglecting Website Security

Cyber-attacks affect 43% of small businesses, often due to poor security measures.

Imagine your website as your house. If you don't lock the doors, anyone can come in. For an online store, security breaches can lead to stolen customer information and a lot of lost trust.

An example here is not having SSL certification, which encrypts data between your server and the visitor's browser.

To avoid this, ensure your website has an SSL certificate. It's like adding a good lock on your door. Most hosting platforms offer this as a basic feature, so it's easy to set up.

Overlooking Mobile Optimization

With 9+ out of 10 of internet users owning smartphones, businesses without mobile-friendly sites lose significant traffic.

These days, everyone's glued to their smartphones. If your website looks weird or is hard to use on a phone, people will leave. Say you have an online clothing store, but on mobile, the images take forever to load and the checkout button is too small to click.

To fix this, make sure your website design is responsive, meaning it adjusts smoothly to any screen size. You could use website builders that automatically optimize for mobile or hire a designer who knows how to make your site look great on phones and tablets.

Skimping on Meaningful Content

Content marketing costs 62% less but generates 3x more leads than traditional marketing.

Content is how you talk to your customers online, whether through blog posts, product descriptions, or videos. It's like having a conversation with someone about what you're passionate about.

If you sell handmade candles but only write short, bland descriptions, you're missing an opportunity to tell your story.

Instead, share detailed stories about how you source your materials or come up with scents. Great content can draw people in, help them connect with your brand, and make them more likely to buy.

Inadequate Customer Service

89% of consumers switch to competitors following poor customer service experiences.

Good customer service is like being a friendly and helpful shopkeeper. If someone has a problem or question and you ignore them or are slow to respond, they'll feel unvalued and go elsewhere. Imagine you buy something online and it arrives broken. You email the company, but no one replies. Frustrating, right? 

To do better, set up an efficient system for handling inquiries. Use automated responses to acknowledge messages immediately and ensure a real person follows up quickly. Even something as simple as a FAQ page can make a big difference.

Ignoring SEO Best Practices

75% of users never scroll past the first page of search results.

SEO is like the map that leads people to your shop in the vast city of the internet. If you're not using the right keywords or your website is slow, you'll be hard to find.

For instance, if you're selling organic dog food but your website doesn't mention "organic," "dog food," or "healthy pet diets," people looking for those products might not find you. 

Avoid this by researching the most relevant keywords for your business and using them in your content. Also, make sure your site loads quickly and is easy to navigate. Tools like Google's PageSpeed Insights can help you see where you need to improve.

Failing to Leverage Social Networks

54% of social browsers use social media to research products.

Think of social media as the town square where everyone gathers. If you're not there sharing stories about your products, you're missing out on a big opportunity.

For instance, if you sell handcrafted jewelry but only post a couple of times a month, your beautiful creations might not get the attention they deserve.

To avoid this, get into the rhythm of posting regularly and engaging with your followers. Share behind-the-scenes photos of your crafting process or run a poll asking which designs they prefer. It makes people feel connected to your brand.

Not Using Data Analytics

Only 20% of businesses are satisfied with their conversion rates, often due to not analyzing data properly.

Data analytics is like having a crystal ball that tells you what your customers like and don't like.

Say you run an online coffee subscription service but never check which types of coffee are most popular. You might keep stocking flavors that most of your customers don't care for.

To not fall into this trap, use tools like Google Analytics to see which products get the most views and orders. Then, adjust your stock based on what your customers love.

Underestimating the Power of Email Marketing

Email marketing has an ROI of $42 for every $1 spent.

Email is like sending a personal invite to check out your latest products or sale. If you're not using it, you're essentially ignoring a direct line to your customers.

If you don't believe in email marketing because you feel it is intrusive... Would you rather not try at all than try and fail? Visitors sign up with you because they want to see more of your business, expect to receive something valuable from you - not necessarily freebies, downloads or discounts but simply, updates.

Email Marketing #emailmarketing

Email marketing is actually a 2-way communication. You get to learn what your subscribers want from their behavior. If many of them unsubscribed after you sent a newsletter, maybe something you said. They've left because they didn't find the contents of your email worthy enough... Then you'll learn from it. So there's a great chance for you to improve your marketing skill. And that's No. 5 of online business mistakes that you should avoid...

Imagine you have a sale coming up but only mention it on your website. People who might have been interested could easily miss it.

To do this right, build an email list and send out regular updates about sales, new products, or interesting content related to your niche. Make sure your emails are fun to read and not too salesy.

If you don't bother to try an email marketing, you're leaving money on the table. If you don't know how to do it, signing up and setting up an autoresponder is not harder than you think.

Neglecting the Importance of Feedback

34% of startups fail due to ignoring customer feedback.

Feedback is like getting directions when you're a bit lost. It shows you where to go next.

If you're selling eco-friendly cleaning products but never ask your customers what they think, you might not realize there's a huge demand for a natural window cleaner.

To stay on track, encourage feedback through surveys or a comments section on your product pages. Then, actually use that feedback to introduce new products or improve existing ones.

Ineffective Branding

Consistent branding across all channels increases revenue by 23%.

Your brand is like your shop's personality. It's what makes you, you. If your branding is all over the place, people might get confused about what you stand for.

Let's say your online store sells vintage clothing, but your website looks super modern and sleek. It might not attract your ideal vintage-loving customer.

To avoid this mismatch, make sure your website, logo, and even your packaging all tell the same story about your brand. If you sell vintage goods, a retro-inspired website design could be just the thing to draw the right crowd.

Not Having a Clear Value Proposition

Businesses without clear value propositions see a 68% higher bounce rate.

Your value proposition is like your elevator pitch; it tells people why they should choose you. If it's unclear, they might just pass you by.

For example, if you offer a meal delivery service but your website just talks about how great your food is without explaining how it makes life easier for busy families, you're missing a key part of your message.

To avoid this, clearly state how your service solves a problem. Maybe you specialize in healthy, quick-to-prepare meals. Make that the headline of your home page.

Poor Financial Planning

29% of startups run out of cash before becoming profitable due to poor financial management.

Without preparing a plan for your business, you will struggle to keep track of your efforts. If something doesn't turn out as expected, say, bad results from social media campaign, it'll be harder to judge whether it's best to carry on or stop and move on to Plan B (because there is no Plan B!)

This is like planning a road trip without checking how much gas you have. You might end up stranded. If you start an online boutique without budgeting for marketing, you could run out of money before you even get off the ground.

To steer clear of this, set a budget for all aspects of your business, including production, marketing, and shipping. And always keep an eye on your expenses. Using accounting software can help keep you on track and make sure you're not spending more than you should.

Your business plan does not have to be anything in detail right from the start. Firstly clarify a few points such as;

  • What kind of products you're promoting.
  • Who your target audience is going to be.
  • How much time you're willing to invest.

Failure to Scale Operations

74% of online businesses struggle with scaling operations efficiently.

Imagine your online shop is a small boat. At first, it's just you rowing, and that's fine. But what happens when 100 people want to get on your boat? If you're not prepared, it could get pretty chaotic.

An example would be if your handmade jewelry shop suddenly got a huge order from a big retailer but you couldn't meet the demand because you're used to making everything by hand, on your own.

To avoid sinking, you could start by finding a reliable manufacturing partner before you even get such large orders. This way, when the big orders come in, you're ready to scale up smoothly.

Not Setting SMART Goals

Businesses that set Specific, Measurable, Achievable, Relevant, and Time-bound goals grow 30% faster.

Setting goals for your business is like plotting points on a map before a road trip; it gives you direction. Without specific, measurable, achievable, relevant, and time-bound goals, you might find yourself driving in circles. Say you want to "increase sales." That's pretty vague. 

Instead, aim to "increase sales by 20% in the next six months by launching a new product line and increasing our marketing budget by 30%." This goal gives you a clear target and a way to measure your progress.

Overlooking Customer Retention

Acquiring new customers costs 5x more than retaining existing ones.

It's like having a party and focusing so much on inviting people that you forget to make sure the guests who are already there are having a good time.

If you run an online subscription service, and you're always looking for new subscribers but not offering anything special to your current ones, they might not stick around.

To keep your guests happy, you could offer loyalty discounts or exclusive content to long-term subscribers. It shows you value them and encourages them to stay.

Ignoring the Competition’s Strategies

Only 56% of businesses conduct competitor analysis regularly.

Not paying attention to what your competitors are doing is like playing a soccer game with your eyes closed. You need to see where the ball is and what the other team is up to.

If all your competitors are using Instagram Stories to showcase their products and you're not, you might be missing out on a big opportunity to connect with your audience.

To join the game, start using Stories to share new arrivals, behind-the-scenes looks, or flash sales. It's a simple way to stay competitive and visible.

Failing to Adapt to Market Changes

52% of Fortune 500 companies have disappeared since 2000 due to failure to adapt.

The market is like the weather; it's always changing. If you're selling heavy winter coats and suddenly there's a mild winter, you're going to have a problem if you can't adapt.

An example of adapting could be offering a line of lighter, more versatile jackets that can be layered. This way, you're not stuck with a product nobody needs.

Lack of Clear Return Policy

E-commerce sites with clear return policies have a 8% lower cart abandonment rate.

Imagine buying something online, not liking it, and then finding out returning it is going to be a huge hassle. You probably wouldn't shop there again. A clear return policy is like a safety net for customers.

If you sell custom-made furniture, for example, you might worry about returns. However, offering a 30-day return policy with the condition that items must be in their original state can reassure buyers and encourage them to take the plunge.

Underpricing Products

Only 12% of consumers buy based solely on the cheapest price, yet many businesses underprice, harming their margins.

Selling things cheaper than everyone else might seem like a good way to get customers, but it's like trying to fill a bucket with a hole in the bottom. You'll lose money.

For instance, if you make organic skincare products and price them too low, you might not cover your costs, let alone make a profit.

Instead, focus on why your products are worth more. Highlight the quality ingredients, the care you put into making them, and how they benefit the skin. People are willing to pay more for something that adds value to their lives.

personalization

Personalization

Not Personalizing the Customer Experience

Personalization can lift sales by up to 10%, but 70% of brands fail to personalize effectively.

Personalization is like calling your friends by their names instead of saying "hey, you!" It makes people feel special. If you run an online bookstore and send the same generic email to everyone, it doesn't really make anyone feel special.

To flip this around, you could use data from past purchases to recommend new books. For example, if someone bought a lot of mystery novels, send them an email saying, "Based on your love for mysteries, you might enjoy these new arrivals." It shows you're paying attention.

Failure to Use Influencer Marketing

Influencer marketing has an ROI of $5.78 for every $1 spent, yet only 37% of businesses use it.

Influencer marketing is like having a popular friend vouch for you in front of the whole school. If you're selling a fitness app but only use traditional ads, you're missing a chance to connect on a personal level.

A better approach would be partnering with fitness influencers who can share their genuine experiences with your app. Their followers trust their opinions, so a positive review could lead to a lot of new sign-ups.

Inadequate Legal Compliance

60% of small online businesses are not in full compliance with laws, risking fines and closures.

Running your online business without minding the legal stuff is like driving without a license. Sooner or later, you're going to get caught.

For instance, if you're collecting emails without proper consent, you could get into trouble under laws like GDPR in Europe.

To stay on the right side of the law, make sure your website has a privacy policy that's easy to find and understand. Also, always get clear consent before sending marketing emails. It keeps you safe and builds trust with your customers.

Not Planning for Growth

93% of businesses with a documented growth strategy increase their revenue, in contrast to those without a plan.

Not planning for growth is like setting out on a hike without a map or supplies. You might be okay at the start, but what happens when you get lost or run out of water?

If you're making and selling handcrafted soaps, and suddenly receive orders far beyond what you can produce in your kitchen, you're in trouble.

Before things get to that point, have a plan. Maybe that means figuring out how you can scale up production, like partnering with a local workshop. This way, when the orders start rolling in, you're ready to grow without missing a beat.

When these initial points are clear, decide how you're going to work towards them.

  • What kind or marketing channels to implement (website, videos, paid ads, social media).
  • Financial goals - short term (monthly profit), medium term (e.g. by the end of this year), and even longer term if you can.
  • How much money you can invest - website hosting fees, web tools, advertising fees.

It can take a lot of effort and it might sound like a daunting task to you, but with a clear business plan you will definitely grab your first success much quicker.

In order to prepare a plan, you need to do some research and ask experts for help. It's best if you have a mentor whom you can ask to review your plan. In any ways, there's no point in planning blindly all by yourself while you don't have enough experience and going ahead with it -  so that's No. 2 of Online Business Mistakes to avoid!

Not Seeking Help

Good business makers have their own mentor however successful they are. While they continuously help others, they also have people to ask for help and advice. And they're not afraid to ask.

Get Help

Great thing about working online is to be able to make your own decision. You don't have to involve anyone else if you don't want to. But like anything else in life - you can't do everything on your own. In fact you get less done by trying to do everything yourself. You should always be open to honest & unbiased opinions from others, you should also proactively ask for help. And learn from it - that's most important.

Finding your own mentor or coach can be hard and costly. You can start by joining an online entrepreneurs' community, read articles that inspire you and reach out to the authors who are likely to be successful. Never try to rely on them, but you can ask them for a few tips by telling them your specific problems. Most experts are happy to spare some moments to give you a guidance. If they offer a coaching service to you, it'll be great as long as it's within your budget.

Ignoring Net Profits

This one might sound so straightforward, but as an accountant I've seen so many sole traders who failed this way over many years - online and offline.

When large sums of revenue start to pour in, they tend to be blinded by it, ignoring all the expenses and believe their business is a success.

One man was ecstatic when he started his new venture and almost immediately started to make the total sales of over $10,000 month after month. He hired me to manage his account - I soon found out he was actually making a loss. The cost of sales was also close to $10,000, plus overhead (i.e. various service fees, tools and utility bills) which he'd been completely ignoring. After I showed him his account, he was unable to redevelop a new strategy and decided to call it a day, with a hefty amount of debt unfortunately.

It's really important to keep track of every single transaction in & out of all your accounts (bank, PayPal, credit cards) periodically. You can create a simple spreadsheet or use a free financial software such as Wave. Update your record at least once a week.

Not Updating Your Skills

Successful entrepreneurs never stop updating their skills, neither should you.

For example with email marketing, a little failure such as the open rate turned out to be low, should be analysed and improved. (Low open rate is likely due to some spam triggered words used in your email - such as "FREE" "get out of debt" "$$$" - and it's delivered straight to your subscribers' spam folder instead of inbox.)

The only way to improve your business is by learning, and by "learning" it means;

  • Fixing errors and mistakes like the email example above.
  • Improving your existing technique.
  • Learning new skill sets to that you can offer them to your customers as standalone services, or you can use them for add-ons.

Not Treating Others With Respect

Two words - trust, and help. You have to be trustworthy to sustain your business, but there are different kinds of trustworthiness.

Leaders and social influencers build trust with others by being honest, straightforward and even blatant at times. But when it comes to customer relations, you need to make them feel special by showing you care. Show them that you are ready to listen to them and ready to help. 

One of the biggest business mistakes is to only focus on finding new customers, forgetting that one of the greatest assets that you have is your existing customers. The only way to gain a good reputation of your business is to prove that you treat your existing customers with respect they deserve. Whereas new customers have no idea who you are, so you have to put a lot of effort to get them to trust you.

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About the Author

ASD. Recovering alcoholic. LGBTQ+ advocate. Semi-retired. 15+ years of web-designing experience. 10+ years affiliate marketing. Ex-accountant. I'm nice and real. Ask me if you need any help in starting up your home business.

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  1. I liked your Content, Thank you for sharing. Have a look into my Site and let me know if you need any help in this Business setup services.

  2. Good advice. Thank you. Ray. I did not know I have to make so much detail plan. But this is meaning a lot for me. Because I still don’t know where to start for making my plan. I ask you to help me.

    Zan

    1. Hi Zan, thanks for your comment. Preparing a plan is not as difficult as you think. You just have to clarify your goals first, and think about how you can work towards your goals. You can send me an email any time and I’ll guide you. Thanks for your visit, and good luck!

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