The emerging world of mobile commerce will generate over $3 trillion a year by 2017, according to Adobe CMO. Thousands of aspiring entrepreneurs will try to get as much of that jackpot as possible.
Before starting an online business, there are several hidden traps to avoid. These traps can completely ruin your chances of achieving your goals.
1. Inadequate Marketing Budget
Don’t be too concerned with the profit margin and revenue right out of the gate. Pay close attention to how much money you invest in profitable aspects of the business. For instance, a common mistake is not putting enough money into your marketing strategy.
Aspiring entrepreneurs should avoid this mistake.
When calculating an adequate amount for a marketing budget, a good rule of thumb is 20% of the targeted gross revenue. As the business becomes more established, try to reduce this percentage to between five and ten percent.
2. Taking the Free Road in Social Networking
It is now common knowledge that social networking has evolved into an effective marketing tool. All potentially successful online businesses should have at least one up-to-date social media profile. To get results, you should also accept that using social media brand pages will cost money. Sometimes, it will cost a lot of money.
Low Organic Reach on Facebook
Take Facebook, for instance. While it is free to create and publish a brand page, boosting exposure to that page is going to cost a lot of money. On average, it appears most posts on Facebook only reach about 6% of fans.
New businesses may need to spend the most money on Facebook advertising to generate the expected result. Having a massive client base can help lower these costs. By reaching out to your existing base, you can build a following without paying Facebook.
Ways to Boost Exposure on Social Media
I use an affordable tool for WordPress called Post Promoter Pro (affiliate). It allows me to post to Facebook and Twitter when I publish an article. It also allows me to schedule as many Tweets about that article as I want. It’s a wonderful way to promote your content on the most important social networks.
3. Not Focusing Enough on the Product
There are many moving parts that all need to run smoothly in order for your business to stay afloat and succeed. When starting a new online business, the administrative side can become overwhelming quickly.
Paperwork, reports, graphs, action plans and daily e-mails form the tip of the iceberg when it comes to this side of the business.
Don’t lose focus of the actual product or service by focusing so much on administrative tasks. Remember, products and services are the spinal cord of the business. Without developing those elements fully, the business will inevitably fail.
Don’t worry, administrative tasks don’t go away, but customers do. Focus on customers first.
4. Refusing to Remain Flexible
The vision of any business owner cannot be rigid in nature as if etched in stone. One has to maintain agility and flexibility to capitalize on all profitable opportunities. Becoming too attached to the way business is conducted today can hamper or even stunt its growth tomorrow.
Change is not a sign of weakness or desperation. Being open to change makes you a strong leader. Successful online businesses are open to change if it means focusing on the future needs of their customers. Focusing only on their past needs prevents your future growth.
5. Not Investing Enough in Technology
Another hidden trap is not investing enough money in technology used for the business itself. Keep in mind that an online business thrives on technology. So, each necessary technology purchase should be viewed as a valuable and worthwhile investment.
Although it may lower cash on hand, these short-term expenses increase productivity. They allow employees to do much more work in less time. Whether you use the technology to please customers, fulfill orders or manage on-hand inventory, there is no downside as long as it is used efficiently and in the best interests of the business.
Project Management in WordPress
I’ve invested lots into my business to add efficiency. For example, I use a WordPress project management plugin called Project Panorama (affiliate). It allows me to create a detailed breakdown of a client project and list tasks. It automatically tracks progress, and it lets my clients log in to see progress. It stops clients from asking the dreaded question “where are we?”
6. High Hopes and False Expectations
Remember: over half of small businesses fail within the first three years. Don’t allow this well-known truth to overwhelm you to the point of throwing in the towel before the fight even begins. Yet, keep this statistic in the forefront of your mind as a protection.
Eliminate any signs of high hopes or false expectations in your mind. Your goal is to build the online business into a profitable and highly successful company. Never forget that achieving this goal is going to take a lot of hard work, effort and patience.