Starting a new online business? Great!
But before you jump in, make sure you’ve covered all your bases.
Below, I’ll go over some of the biggest mistakes I see internet entrepreneurs make and how you can avoid them.
Biggest Mistake Most Internet Entrepreneurs Make #1: They Don’t Take the Time to Create a Clear Business Model
It’s completely understandable. You’ve just thought of the next golden ticket idea, and you’re ready to put your idea into action right now.
But when it comes to starting a business, planning pays off – big time. In fact, it could very well be the difference between ultimate success and inevitable failure.
Why? Because a clear business model outlines how a business will generate a profit. You may have the best product on the market, but you still need to know how
Online business models typically fall into one of a few categories:
- A freemium model – in case you missed it, this is a combination of “free” and “premium.” As a business model, it means that a company provides a free service with an option to upgrade for access to more premium features. Example: Spotify
- Subscription-based – with this one, users gain access to your service a subscription-basis, usually monthly. Example: Netflix, Amazon Prime
- E-commerce – you probably already know this one. It mimics an actual selling experience, only your product is sold online. Example: Take your pick – Nike, Asos, etc.
- Marketplace – this functions similarly to an e-commerce site, only the business doesn’t actually hold any inventory but instead relies on external suppliers. Example: Etsy
- Lead generation – Generating leads to sustain a businesses growth, usually B2B.
- Advertising – Running ads on a site.
This by no means an exhaustive list, but you get the jist.
But beyond establishing the type of business model you’re going for, you need to dig even deeper into the details. Try to come with clear solutions for the following:
- How will you generate traffic? Consider options like starting a blog, social media strategies, online advertising, etc.
- Number of visitors – what’s your goal? Don’t say “as many as possible.” Create real numbers and then form actionable strategies. Do your research, and base your goals on realistic sets of data.
- Conversion rate – Once you get ‘em to your site, it’s time to work on conversion. Check out a few my favorite tips for better conversions here.
- Cost per conversion – conversions are great, but they don’t always come cheap. Set aside a budget for advertising, etc. and track the data to see what your conversions are costing you and whether it’s realistic to keep your business going.
- Profit per conversion – this goes hand and hand with the above. Naturally, you want your profit per conversion to exceed the cost. This ultimately will determine the success of your new business.
The good news here is that once you’ve set a baseline, all of these numbers are trackable through tools like Google Analytics.
Just remember: don’t jump the gun; do the homework. I promise you, you’ll be glad you did.
Biggest Mistake Most Internet Entrepreneurs Make #2: They Throw Up a Website Without Considering How to Monetize
Again, I get it.
You’re ready to get your idea off the ground, and a website is the easiest way to do it.
But like every other aspect of your new business, your website design, build and functionality all need to be created to support your end goal. That end goal? A profit.
And here’s the thing: you can make money from your website, and you should be planning how.
Remember, it is possible to make money with your website, but in the long run is just one more (major) tool to promote your business model. Whichever route you take to monetize your site should ultimately support and work to achieve the goals of your business model.
The first thing to consider is that in order to make any profit, you need traffic. Your first step should always be to build relevant content and generate traffic.
Once the traffic is there, here are a few options to consider:
Sell a Digital Product
Your biggest opportunity for making money is, of course, to sell something yourself.
Even if you’re not in the e-commerce business, you can still bring in profit by selling your expertise, often in the form of an e-book or webinar. If your strategy includes thought leadership, this can be a great way to package up some of your ideas and sell for a small fee.
Note: remember, you’ll need to do a little groundwork here first to establish your expertise in your niche – establish a blog, offer advice and tips via social media and weekly newsletters, etc. – before asking for the sale.
Set up a Paywall
This goes along with the freemium business model we discussed earlier.
Basically, you block off certain segments of your site to those “members” who pay a certain fee for it. Parts of the site will remain completely free – and filled with great content that entices visitors to sign up for paid access. This also requires a strong strategy and online presence to establish your brand, prior to asking visitors to pay for your service.
Take, for example, a site called The Persuasion Revolution. The mastermind behind the site created a website that offers a collection of free resources for anyone looking to build a more effective business.
Beyond the free collection, visitors also have the option to join the Persuasion Hacks Lab, a series of trainings, webinars and exclusive downloads available to those who pay a monthly fee.
Biggest Mistake Most Internet Entrepreneurs Make #3: They try to Build an Affiliate Site and Make Money from Commission Junction, Affiliate.com or Adsense
So monetization is important. Got it.
That said, there are a few ways to go about it that generally lead to failure for new entrepreneurs.
The first: Affiliate Marketing.
Affiliate marketing is a way to earn a little commission through product recommendation. You start by finding a product you like and endorsing it with a link on your site. If someone clicks the link and makes a purchase, you get a percentage of the sale.
In theory, it seems like a great idea. But in practice, it’s almost impossible to get right if you don’t have experience.
Why? Because when you’re new on the scene, your job is to establish your expertise in your own niche, not push products that might make you seem spammy.
Affiliate marketing works best for those who have a strong reputation and trusted following because their audience already trusts their opinion.
Now, that doesn’t mean that you can’t use affiliate marketing – especially if you find a product to promote that has a strong connection to your industry or expertise. Just don’t to see overnight results.
The second reason internet entrepreneurs get in trouble is by relying on Google AdSense for income.
AdSense is a type of PPC advertising which allows publishers to use Google’s network so that other advertisers can run sites on their website.
Google will place a code on your website and use it to display ads relevant to what your site produces. When someone clicks the ad on your site, you get paid.
AdSense is by far one of the most well-known ways of monetizing, but for newbies, it comes with a warning label.
This is another avenue that’s extremely hard to get right for those inexperienced with the platform. Jumping in too quick runs the risk of decreasing the value of your own brand by overloading it with ads from other sites.
If you’re convinced you need ads and have a few bucks to spare, consider consulting an expert before jumping in.
Biggest Mistake Most Internet Entrepreneurs Make #4: They Hire People to Build Something When That Have No Experience
This is a big one. Far too often, internet entrepreneurs waste tons of money building hiring the wrong people to build their websites and apps.
If you’re operating online, those tools are crucial to your overall success.
But the good news is this mistake is easily avoidable if you do your homework. Don’t hire the first person you find, or that friend-of-a-friend whose dabbled in design.
Instead, take the following into consideration:
- Their work history – even if they have a great resume, you want to find someone who has experience in your space – especially if it’s a startup. A startup company requires a bit of adaptability and more go-with-the-flow attitude, so make sure the person you hire knows and is comfortable with new companies.
- Ask them to explain the technicalities – don’t focus on questions that could be found with a quick Google search; instead, ask them to walk you through potential complications and conflicts
- Look at their prior builds – this is likely step one. Make sure you like the style and functionality they’ve used previously and that it fits with the brand identity you’re trying to establish
- Don’t rush! – take your time interviewing and evaluating. No matter how eager you are to get things up and running, you’ll be much happier with the result if you take the time to find someone who has the experience needed, communicates well, and is flexible and accommodating to startup businesses
Biggest Mistake Most Internet Entrepreneurs Make #5: They Don’t Take the Time to Get Educated in Digital Marketing
This is an absolute must for any online business.
Learn everything you can about digital marketing and the role it plays in the success of your business (spoiler alert: it’s a big one).
Start at the beginning, and don’t skimp on the details. Familiarize yourself with the history of digital marketing and how it’s evolved, and the tactics most effective for an industry in your niche.
Pay special attention to the following:
- Search Engine Optimization (SEO) – this is the process of increasing your website traffic through search engine results. There’s a lot to learn about SEO and how to incorporate into your site and content, including:
- Content optimization
- Technical SEO
- Content Marketing – Content, as they say, is king. It’s one of the top ranking factors when it comes to Google, and it’s been at the forefront of marketing strategies for years. It’s all about producing high-quality, relevant content, and included everything from incorporating the right keywords to posting on the right sites and channels.
- Social Media – Quite simply, if you run an online business (or any business, for that matter) you need a presence on social media. Determining your social strategy will rely heavily on determining your target audience and which channels they use, as well as the type of content that resonates most with them. Beyond that, it’s about finding ways to engage and reach that audience (which often includes sponsored posts and social ads).
- Pay per click (PPC) – PPC is an advertising model that lets advertiser pay per user who clicks their ad. Most of the major networks use this method, including Google AdWords, Bing and Yahoo, Facebook, etc. But beyond putting together an engaging ad, there are intricacies to familiarize yourself with like budget, placement, quality score, keywords, etc.
This is just the tip of the iceberg when it comes to digital marketing. But don’t stress; take it one step at a time.
You can do it on your own, but know that it will take time. If you’re interested in some advice or a consult with the experts, check out some of the top things to look for in a digital marketing agency.
Biggest Mistake Most Internet Entrepreneurs Make #6: They Build Their Website on the Wrong Platform and Then Have to Switch (And Lose All Their Traffic)
There’s plenty of platforms to choose from when it comes to building your site – Wix, Shopify, SiteBuilder, and of course, WordPress, to name a few.
But here’s the thing: If you choose the wrong one, you’ll likely pay for it later.
Moving your website can cause a significant drop in organic traffic, and it’s not an easy feat to regain it in the end.
The reason for the change could range from simply wanting to save money with another provider to outgrowing your data package, or even needing to transfer from HTTP to HTTPS. Whatever the reason, you’ll want to make sure you choose a platform that displays your site properly, meets your technical needs, and supports your SEO efforts.
As you make the change, make sure you do the following:
- Find a location that meets your needs
- Select the physical location carefully (the country)
- Make a backup of your site – use a temporary URL to test the new site before it goes live
- Update the TTL of your DNS (Domain Name System) records (more information on that here)
- Change your DNS records
There’s a lot to know, and it gets technical fast. Personally, for something this major I recommend hiring an SEO company to handle the transfer. While it’s an added expense, it’s the best way to ensure your value and traffic stay as intact as possible.
Wrapping it Up
Starting something new is exciting.
But before you let the excitement get the best of you, spend some time making sure you have all the tools and resources needed to make your new business a success.