BizReport

RSS feed Get our RSS feed

News by Topic




BizReport : Internet : December 22, 2018


Don't Let Your Online Business Sink: 3 Tips for Survival

At one point or another, most internet entrepreneurs have experienced a moment of panic where they look around and realize they're sinking. And while it can be scary to feel like you're plunging into the depths of a cold, dark ocean, you haven't drowned yet. If your head is still above water, you have a chance to keep your online business afloat.

Why Online Businesses Fail

You've likely heard the statistic before - 90 percent of online businesses fail within the first 120 days. It's an alarming failure rate that continues to go unheeded for a variety of reasons.

For one, most entrepreneurs don't know the statistical odds they face or assume they'll be an exception. Secondly, it's easy for emotions to get the best of an entrepreneur and push them to act on feelings rather than facts. Finally, most entrepreneurs don't have a tangible understanding of the basic tenant that says, "If you fail to plan, then you plan to fail."

In order for an online business to succeed, you must be able to answer questions like these confidently:

What am I offering?
Why is it desirable?
Who is my customer?
How does this benefit them?
What are my long-term goals?

"If you can't answer these basic questions, this may present a challenge for your business. For example, if you are 'just selling stuff you think is cool,' you might be in trouble," WebFX warns. "Flea market stands may do well, and individual product listings on marketplaces or auction websites will probably make you so money, but building your online presence around selling 'cool stuff' isn't wise. It's hard to differentiate yourself from other websites unless you have some kind of theme or purpose."

3 Tips for Staying Afloat

It's not all doom and gloom for businesses that feel like they're sinking. No matter how far behind you fall, there are still some practical ways you can keep your operation afloat (at least temporarily).

Here are some tips and ideas:

Slash Expenses

Begin by slashing expenses and reducing the amount of money that flows out of your business on a monthly basis. If an expense isn't necessary, do away with it. You have to run as lean as possible until your financial situation levels out.

Keep the Lights On

Cutting expenses might not be enough. Until you're able to sustain some positive cash flow, you may need an infusion of quick cash. A cash loan, also known as a personal installment loan, could provide you with $500 to $5,000 and flexible repayment terms (within as little as a day). You may also consider going to friends and family, who could be willing to offer you a flexible loan as well.

Don't Sacrifice Quality

You'll need to do something different to grab attention and excite customers, but don't compromise on quality.

"Business owners seeking to improve margins on a particular product should be wary of making dramatic changes to particular components," entrepreneur Glenn Curtis advises. "For example, if a pizzeria is going through a dry spell, the owner could seek to expand margins per pie by purchasing cheaper cheese or sauce ingredients. However, the strategy could backfire if customers become dissatisfied with the taste (quality) of the pizza and sales start to decrease. The key is to make cost and other cuts while retaining or improving the quality of the finished product."

It's nearly impossible to survive without a quality product - unless you're hell-bent on being the low price leader. But for a business that's struggling to stay afloat, this isn't usually an option. It's the businesses with massive supply chains and robust professional networks that typically take the lead in this area. Keep quality up and trust that customers will follow.

Putting it All Together

There's nothing easy about starting and growing an online business in what is the most competitive marketplace in the history of the world. You need a certain level of grit and tenacity - but you also need a plan.

If you feel like your business is sinking, your first goal is to stay afloat. Once you're afloat, then you can focus on swimming. In other words, survival precedes growth. Now's your time!



Tags:








Subscribe to BizReport







http://www.bizreport.com/2018/12/dont-let-your-online-business-sink-3-tips-for-survival.html

 

 

Copyright © 1999- BizReport. All rights reserved.
Republication or redistribution of BizReport content is expressly prohibited without the prior written consent.
BizReport shall not be liable for any errors in the content, or for any actions taken in reliance thereon.