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Why do internet start-up businesses fail?

The US Small Business Association (sba.gov) claims >50% of start-ups will not survive their first five years in business. In the internet space this percentage may be even larger considering the low barriers to entry and low costs of starting an online business.

Don’t be another statistic! Reviews these nine reasons businesses fail and take affirmative action!

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  • Saturated Market – Who is your competition? How much competition do you have? Many businesses fail because they do not take the time, or know how to, conduct a   competitor analysis.
  • Lack of Planning and Organization – The cure to this is solid strategic planning, developing systems and processes for ALL your business activities,  and effective marketing planning.
  • Poor Management / Leadership / Team – Are you trying to do everything yourself including the accounting, sales, marketing, management, human resources AND produce products? Are you trying to run a professional business with unskilled, or even unavailable, team members? 
  • Insufficient Capital – Not enough money to sufficiently fund start-up costs or to adequately plan for long-term needs.
  • Location – obviously this applies primarily to local based businesses, but for internet marketers WHERE you market online can also have a huge impact on your success. 
  • Over expansion – Businesses trying to grow too quick. Remember the “dot com bubble” (1995-2000)? Many of those ventures received “angel investor” funding, hired a ton of staff, then discovered they didn’t have sufficient market demand to sustain their payroll expenses. 
  • Poor Products – Does your product meet the needs of your customer? The key here is understanding: What does your customer consider value?
  • Ineffective Marketing and Promotion – Often this is skipped because business owners feel they can’t afford to spend money on advertising. Which is why I study, use, and teach “low-cost to no-cost” internet marketing techniques.
  • Inadequate USP (unique selling proposition) – This is the way you market yourself, the verbiage you use on your site, and your unique branding. It is critical you differentiate yourself from the competition!
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The best way to differentiate yourself from your competition is to first conduct a thorough [highlight]competitor analysis[/highlight]. If you are going to avoid being another generic business, you simply have to answer these questions:

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  • What are your competitors doing?
  • How are they marketing themselves?
  • What keywords are they bidding on?
  • Are they utilizing social media channels?
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