Why Do 90% of Small Online Businesses Fail?

Posted On March 14, 2015


There is always more than one reason behind the failure of a small online business.

With 15 years’ experience setting up or improving online businesses here are some points to consider if you are about to start an online business, or have started but are not achieving the results needed for online business survival.

  • Brand only top 10 search results

The main reason online businesses fail is because they lack traffic to the website and therefore fall short of the number of sales need to sustain the business. Usually this is because their brand search phrase has low volume and therefore even if the website appears top in search engine result pages the traffic volume is too low to deliver profitability.


  • Lack target awareness and goal setting

Frequently the business owner(s) have not carried out online business competitor analysis and are unaware of the differing methods being used by competitors to attract and engage with a wider number of potential customers.


  • Incorrect infrastructure which guarantees failure

Even in larger organisations the websites infrastructure delivers url’s which have rendered the website useless in terms of search engine ranking.


  • No ecommerce expertise within business

Without relevant information to guide business owners in critical decision making, costly mistakes are often made right from the outset which result in wasted budget, a failure to achieve objectives and the delivery of web site collateral not fit for purpose.


  • Insufficient or no budget to outsource expertise

When a business owner is made aware of the changes required to correct the performance related issues, the cost to upgrade web infrastructure, systems and processes is often outside of the operating budget.


  • Low Profitability

A frequently changing online market price in a competitive market can contribute to reduced profit margins when a race to the bottom price occurs. In such markets focus should then be on the lifetime value of the customer to the business.


  • Lack of focus on customer needs

Failure to put the customers’ needs first in these days of social signals and feedback can prevent a business from growing and improving brand reputation.


  • Transparency

Who are you?

If potential customers are having difficulty finding the contact details of your business as you prefer to show them a contact form without your business address, don’t expect all of them to complete your call to action. 

  • Security

A prospective customer has travelled through your sales funnel but does not complete the transaction and abandons due to concerns about the security or lack of security confirmation within the check-out procedure.


  • Death by over contact 

Build an email list… that is the objective. Over time a successful online business will increase the number of email contacts in their database. Unfortunately a common practise in small online business operators is to bulk send the “Newsletter”, the frequency of which is often dictated by desperation for more sales. Over frequency is the main reason why customers unsubscribe.

Written by Michael Boyle

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