Skip to content. | Skip to navigation

Personal tools
Sections
You are here: Home Focus What Could Cause Your Online Business to Fail?

What Could Cause Your Online Business to Fail?

08 January 2018, 18:53 CET

The Internet has opened up huge opportunities for people that have the drive, determination, and willpower to make something of their entrepreneurial skills. There are many people that have become huge successes in terms of business thanks to the Internet, and because the Internet is global the opportunities are truly huge.

However, when operating on an online business it is important that you focus on potential risks as well as rewards otherwise you could find that your business could quickly and easily fail.

Some of the things to look out for

Some of the things that could result in your online business failing include:

Cash flow: Many businesses experience cash flow problems and the longer these issues last the bleaker things will look for you. When it comes to getting payment on invoices, you can consider solutions such as factoring companies to purchase your unpaid invoices so that you have accessible cash again.

External factors: There are many different external factors that are out of your control, which could result in your online business failing. This is why it is so important to spread your risk when you have an online business. There are a huge number of external factors that could affect the success and viability of your online business such as changes in legislation, changes in the terms and conditions of other sites that you use, changes to affiliate programs, website hosting downtime, Google bans and penalties, and even cyber crime.

Competition: The chances are that if you have thought about a potentially successful business that you can start up online then someone else is also likely to have thought of it – in fact, many others may have thought of it. This means that you will most likely face stiff competition, which is something that you cannot control. However, what you can do is ensure that your site is better than the rest with constant monitoring, updates, using professional services to make the most of it, and ensuring that it is secure and trusted by consumers.

Single point of failure: If there is a single part of your business that could cause a big issue for you if something went wrong with it is known as a single point of failure. It is important to ensure that you identify these single points of failure and then take action to reduce the risk of problems occurring wherever possible.

Criminal activity: The Internet has resulted in an increase in cyber-crime, and a knowledgeable hacker could easily cause you serious problems that could end up bringing your business down. It is important that you therefore have high quality security systems in place to protect your site and your business.

Poor risk management: This is one of the major causes of online business failure. If you put all of your eggs in one basket and the basket falls your eggs will most likely be smashed to pieces. In other words, you need to make sure that your livelihood and success does not just depend on one particular product or website. Spread the risk and think in multiples, so if something goes wrong with one product or site you still have others to rely on.

Familiarizing yourself with potential issues such as these will help to ensure you are more prepared when it comes to running your business.

Document Actions
Weekly Diary

The Week Ahead no. 623
Waste framework directive - microplastic pollution - agriculture situation and Ukraine - Multilateral Investment Court

→ EUbusiness Week archive

Subscription options