3 Top Reasons Why Online Businesses Fail

3 Top Reasons Why Online Businesses Fail

A research showed that 9 out of 10 new online businesses fail.

Another survey showed that 95% of all the new online businesses fail in the very first year of their inauguration.

Another study showed that the rate of online businesses that fail to move to the second year is 90%.

And there are several other studies that show similar kind of stats. So it means that there is something really fishy going out there when it comes to setting up and managing a new online business.

The reasons for failure of newly built online businesses are numerous. Every single individual and business entity has its own reasons for failure provided they know them.


46% of the new online businesses fail due to incompetence. Incompetence refers to not doing the job or assigned tasks rightly.

So if you don’t know how to do it, you might end up doing it the wrong way.

To be competent to perform a task, you must have 3 things:

  1. Skills
  2. Knowledge
  3. Behavior

In order to avoid online business failure, you need to develop 3 things.

Most importantly, you must have related skills. For instance, if you are about to start an affiliate business, you must have marketing skills. Not too much but you must have at least little bit of marketing abilities.

The best way to deal with incompetency is to choose the business that interests you. Choose the niche, field or area that is of your interest. If you don’t like marketing or if you cannot convince people or if you feel that you just don’t have the guts to do marketing, just don’t do any business that involves marketing.

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Do what you like and you will not have any issues.

Lack of Management

30% of the overall online businesses that fail in the very first year of their setup has one thing in common, lack of management or poor management skills.

Half of the businesses don’t bother about management and the other half of the online businesses fail due to poor management.

The problem with most of the people is that they just assume that an online business is easy to manage and it doesn’t need any management at all. This is a wrong approach. A very wrong approach.

There is no business in this world that doesn’t need any management be it online or otherwise.

Don’t take your business lightly. Take it seriously. Manage things and keep managing them.

Lack of Experience

Lack of experience is a pretty common reason for failure of online businesses. I don’t have to discuss anything about the lack of experience, right?

Always do what you have experience in. There is something that you can do easily and you have been doing up till now, right?

However, should you want to jump into a new field, hire an experienced guy to help you. This will make things quite easy for you.

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