If you’re looking to get financially independent, then launching your very own business can offer you a much better chance than working for someone else. The internet has made it much easier to start a business than ever, but despite the ease of getting one up and running, it can come with some challenges that need to be figured out, as well. Here, we’re going to look at some of those often unexpected challenges and what you can do to get over them.
Cash Flow Can Be Unpredictable
For traditional brick-and-mortar businesses, their proximity and location often guarantee some degree of sales, be it from walk-in traffic or contracting with local clients. Online businesses do not have any assurances of visibility, so they can have fluctuating income. This can include sales that spike during launches, holidays, or ad campaigns, but drop after, or subscription cancellations. A lot of digital products are cyclical, moving between feast and famine. As such, long-term planning and budgeting can be harder while you still have to keep up with hosting, software, and advertising expenses. To stay stable, online entrepreneurs need to build a cash buffer, forecast conservatively, and monitor burn rates. One slow month shouldn’t sink your operations, but many entrepreneurs overlook this early on.
Tech Issues Are A Chronic Concern
If the very nature of your business is online and digital, then it should stand to reason that any tech issues can cause business interruptions. Whether it’s something as seemingly minor as a broken link or something as major as a software update crashing your site, these can be a serious hassle. Even fully managed platforms have constant updates that can cause third-party tools to stop working overnight. As such, it’s important that you’re able to take steps to address these issues quickly or work with someone who is able to in order to keep your online business up and running. Relying on agencies or freelancers can become prohibitively costly, so it’s often wiser to have your tech guru as part of the company.
Financial Providers Can Be A Problem
You might think that online business is so established that you would have no problem getting your transactions through, but a lot of business owners get surprised when they find their funds frozen or payments delayed. Unfortunately, a lot of traditional providers, such as banks and even the bigger online providers, can find your business high risk, especially if you’re in an industry that has a high chargeback rate. As such, working with a high-risk merchant account is often recommended, as having your funds held, even for a few weeks, can be devastating to your cash flow. It’s critical to read your provider’s terms, diversify payment options, and keep a close eye on disputes. Communicate clearly with customers, and use contracts or disclaimers when necessary.
There’s A Lot Of Competition
As easy as it is to start an online business, you’re soon going to find that many markets are already quite saturated. If you’re selling products, courses, consultation services, or otherwise, you’re going to find plenty of others doing the same after having hopped over the low barrier to entry. This doesn’t necessarily mean that they’re going to be hard to outcompete, but it’s not just the quality of your offerings but the strategic positioning and marketing that matters, as well. As such, it’s wise to set aside a budget and find a digital marketing agency that specializes in what your business does, to make sure that your quality is able to get the platform and visibility it deserves.
The Burnout Is Real
Business owners, in general, have to get used to wearing a lot of hats. Many of them work in marketing, customer service, design, accounting, and more, especially in the early stages. This can be even more true in an online business, where outreach and tech management require a lot more work. This all-in-one role can quickly lead to burnout. Constant context-switching reduces productivity and makes it hard to scale. It’s common to feel overwhelmed and stuck putting out fires rather than being able to focus your efforts on strategic growth. Finding the right automation tools, outsourcing strategically, and setting boundaries can help you manage your work-life balance a little better.
It Takes Time To Build Trust
People are skeptical when they encounter businesses online, especially if those businesses are exclusively online. It’s natural that customers would hesitate to buy from brands or websites they don’t know, given the frequency of scams online. As such, you should be ready to put more work into building trust while conversions start off slow initially. You should work to build up reviews, testimonials, and social proof (such as good word-of-mouth), while putting trust-building measures like refund policies and trust badges in place and visible on your site. The challenge is that trust builds slowly, but bills come fast. To bridge that gap, use guarantees, honest marketing, and consistent branding. Above everything else, do not break trust. It is your primary currency online, and if a public scandal hits, it can tank your entire business.
The Many Gray Areas
Online businesses often have to deal with rather complex legal and regulatory issues, especially if they operate across different territories and jurisdictions. Questions such as how you collect sales tax when selling online and which data privacy laws you need to comply with can easily trip you up. It’s easy to violate policies without even being aware that this is what you’re doing. As such, you should try to get in touch with a business lawyer as soon as possible, especially if your business is growing and trading overseas. That way, you can make sure that you’re sticking to best practices as best as possible.
Is it still worth it to launch an online business despite the many challenges above? That depends on how strong your business idea is. If there’s real profit to be made there, then the answer is certainly “yes.” However, you shouldn’t let any of the problems above blindside you.