online entrepreneurship
DESCRIPTION
Learn the truth and be aware of the risks of Online EntrepreneurshipTRANSCRIPT
Online Entrepreneurship
Understanding the Difficulties of Starting a Business
Internet Entrepreneurship
• The widely-held perception is now that
starting and sustaining
a profitable web-based
business has become
very easy.
Lure of the Online Business
• Starting a business online is
now very inexpensive.• Domain = +- $8• Hosting = A low monthly cost • Plethora of free/inexpensive content
management services, like WordPress,
and customizing these products is simple.• Cheap logos, cheap eCommerce options.• Inexpensive and free coding environments and programming languages.• Low-cost, high-yield marketing options
Online = Lower Costs
• Plethora of free/inexpensive website building services.• Customizing products like Wordpress,
Joomla, or any other CMS, is simple.• Cheap logos, cheap eCommerce options.• Inexpensive and free coding environments
and programming languages.• Low-cost, high-yield marketing options• Plethora of potential customers can be
reached via the internet.
Online = Lower Costs• Perception of thinking you “save more” without having to
lease an office space or spend money on discount office supplies.
• On the contrary…
.
The Reality is, The Vast Majority of New Online Business Will Fail
Failure is the Norm
• Starting, growing and sustaining any business is
exceptionally difficult.• 20% of new businesses fail
within the first year.• 51.2% of businesses
have failed after year five.• 71% have failed by year
ten
Online Company Failure = Higher
• Experts estimate that the rate of failure for internet companies is even higher than brick-and-mortar stores.• Abundance of competition• Same opportunities listed in earlier slide
available to all• Consolidation Trend• Segmentation and Targeting Issues• Unexpectedly Costs• Messaging Issues
• Estimates range from 70% to 97% failure rate
Established Players
• Established competitors have a huge advantage.• When people search, they click on the first result 42% of the time.• Established companies have:• More money• Better rankings• More experience• Established partners• Etc…
Failure Rate by Industry
• Some areas of business have a much higher rate of success than others do.
Causes of Failure
1. Incompetence• 46% of Business Failures can be
accounted for by some sort of incompetence. Some common examples include:• Lack of Planning• Lack of having an organized system
• ex: not saving important documentation. Use file cabinets you should always have a hard copy of the most important documents.
• Lack of Knowledge Regarding Finances and Taxes
• Poor Pricing Strategies
Causes of Failure
2. Lack of Experiencei. 41% of Failed Businesses,
do so because of a lack of managerial and/or sales/supplier/marketing experience.i. Credit and borrowing Issues
ii. Rapid expansion
iii. Inadequate inventory
iv. Lack of supplier relationships
v. Ineffective marketing
Shoplet’s Perserverence
• Despite the very high failure rate in new retail and online startups, Shoplet.com has beaten the odds.
• Founded in 1994, Shoplet is one of the original e-marketplaces. We're proud to have grown tremendously without any outside funding, and we have been profitable since 1997.
• You can learn more about the office product industry in a e-book we have created.