Are you worried that why your business is in the red or loss? If yes, learn here common mistakes online businesses and entrepreneurs make with WorthofBlog.
It’s a cutthroat world out there; I mean it. It takes you years to work up the courage to go after your dream and yet it only takes seconds for the world to crush it. I know that this is not the best way to open a business topic for you. Surely, an intro filled with gloom and doom is no way to attract good juju. However, to actually survive out there and to create a marketing strategy that actually works; you need to get in touch with the reality of the situation. And that reality is this:
“Roughly 20% of start-up businesses online never make it past the first year.”
And today, we are going to tell you why.
Common Mistakes Online Businesses and Entrepreneurs Make
If we’re going to list down all the times and all the types of mistakes newcomers are guilty of, we’d have enough depressing material to start a book – probably entitle it “How Not to Start a Failing Business.” So to save you from the grief of realizing that you’re also as guilty as charged as the rest of them, we decided to digest the rather disappointing list into little nuggets of wisdom. With luck, you’d be able to avoid committing such errors before it’s too late!
Learn Why Your Business Is In The Red With WorthofBLog
1. Overspending From The Very Start
One of the major culprit behind many failed establishments or why your business is in the red. As a business, you should have to squeeze your resources down to the very last drop. You have to focus on minimizing expenditures and maximizing profit. Think “What is the best and cheapest way to do this while still maximizing my yield?”
If you spend too much from the get-go, you’ll just end up with a lot of dead expenses. These are costs that you paid for that don’t necessarily help you generate income like furniture, rent, subscriptions, etc. You can read more about it here. While making sure that you can work comfortably is important, it shouldn’t be your priority as a start-up business. You don’t really know when things will start to pick up. It can be tomorrow, next month, next year, or in the next five years. You have to hold the fort until then.
This is why if you can forego certain stuff, do so. Your laptop’s old so you want to buy a new one? Unless it’s broken, keep using it. You want to hire a VA so that you can improve your workflow? That’s fine but do you really need it when you’re managing, like, four or five projects a month? If you can do it yourself, then do it yourself. You can be plenty generous about these things when you’ve already gone past the initial stages of the business and you’re earning stably and sufficiently.
But paying for all these things while you’re still so green? Unnecessary.
See also– How Can Payroll Outsourcing Solve the Problem for a New Business?
2. Wrong Allocation Of Funds
It could also be that you’re quite aware of all the budgeting that you need to do and yet, you fail miserably at allocating these scarce funds. Even if you do try your very best to limit your newfound company’s expenditures, it would be for naught if you keep allocating what little you have on the wrong things.
For example: Investing so much in the production of your goods. First things first, just ask yourself. Why in the world would you invest so much in production when there is no obvious demand? I understand that preparation is key to success and you don’t really want to be caught off guard when the demand for your products suddenly spikes up.
However, also consider the cost of inventory. That’s dead money right there. It’s not moving, whatsoever. You could’ve put it to better use but no, it’s sitting there like a duck stuck on a muddy pond. Not to mention, you also have to take into account the depreciation costs as well as the space (if any) that your products consume. If you allocated the money in tasks and activities that generate income, it would have been put to better use.
If it isn’t obvious enough, I’m talking about online marketing.
See also– How You Can Improve Your Business By 30% Using Online Surveys
3. Ignoring Online Marketing
Don’t be the noob that says online marketing does nothing for your business whatsoever. It’s really ironic meeting “business professionals” who are hesitant whenever the topic of marketing is raised. It’s as if they’re afraid to talk about it – when in fact, it’s something very, very important in the world of E-Commerce.
At first glance, online marketing may be nothing but incurred cost. I mean, it doesn’t directly earn money for the company. It just lets money out, if anything. However, without efficient online marketing, your business is as good as non-existent in cyberspace. Think of it this way:
When you’re out shopping for groceries, do you pick out what’s displayed in the outermost of aisle shelves or do you reach deep into the thicket to grab the same product on the innermost part of the shelf? I doubt you would go through such trouble. You’d probably pick up what’s closest to you.
In the same way, would you pick the same product from the topmost or the bottommost section of a 5-level shelf? I think you’d just grab what’s right in the middle since it’s more convenient for you.
The same goes for online businesses. For sure, you will not be the only one selling that type of product. In fact, the competition might just as well drown you amidst the many other companies that believe “online marketing does nothing for your business.” Well, news flash! It does do something!
SEO, Social Media Advertising, Content Marketing, and many other proven strategies online all work together to get your brand, your company, closer to the market. You can read online material like Useful Lead Generation Tips to know more about how these strategies are put into action. Just like the product on the outermost and middle section of a grocery aisle, online marketing aims to conveniently deliver your product to its niche market.
Then again, just because you’re investing in online marketing doesn’t mean you are guaranteed success. You also have to consider “who” spearheads your online marketing campaign.
Best of luck!