10 Mistakes to Avoid When Starting an Online Business

10 Mistakes to Avoid When Starting an Online Business

Everyone dreams of quitting their 9 to 5 and becoming their own boss. With the rise of the internet, it seemed easier than ever to turn that dream into a reality. After all, who wouldn’t want to work in their pajamas in the comfort of their own home?

Equipped with little more than a laptop and a cup of coffee, it’s possible to do just that. People do it every day. Some are successful and some aren’t, though. So, what’s the difference between these two groups of people?

Obviously, there are as many circumstances as there are people. No two successful people did everything exactly the same way and two people that failed at their online business probably made different mistakes. Even so, we can still learn from their experiences.

When you start doing case studies, you notice a few common denominators. The people who succeed tend to have certain things in common, even if they followed different paths. The same is true at the other end of the scale.

A lot of people get online, set up a web page and wait for the money to roll in. They are full of energy and willing to give it their all, but then they fail. And that brings us to the point of this article.

10 Mistakes to Avoid When Starting an Online Business

First, I’ll tell you what those mistakes are, then we’ll dig a little deeper. I’m not listing them in any particular order, because any of them can be a fatal crash, if you’re not careful.

So, here they are:

  1. Not Having a Game Plan
  2. Sweating the Small Stuff
  3. Ignoring the Budget
  4. Getting Lost In the Social Media Maze
  5. Skimping When You Shouldn’t
  6. Believing You Can Buy Off the Rack (One Size Fits All)
  7. Cookie-Cutter Syndrome
  8. False Expectations
  9. Swinging A Hammer Where There Isn’t a Nail
  10. Being a Career Student

Okay, maybe some of those sound a little silly, but don’t worry. I’ll explain what each one means and how to avoid them.

Not Having a Game Plan

Traditionally, when someone goes to the bank to take out a loan to start a business, one of the first things they want to see is a business plan. If you haven’t done your research and decided how you are going to make money – specifically, not just saying “I’m gonna sell stuff” – good luck getting that loan. No one will take that kind of risk with someone who hasn’t prepared themselves for success.

One of the beauties of starting a web-based business, is that the overhead costs can be extremely low compared to traditional brick-and-mortar businesses. Yes, you’ll have to spend some money, but relatively speaking, it’s not that expensive to get yourself in the game.

The low cost and ease of starting an online business fools a lot of people into thinking they can just wing it. Spend a few bucks, figure out how to set up a website and work out the details as you go isn’t really a plan. I’m not saying you have to have some extensive, master-level business plan drawn up. What I’m saying is that you need to think ahead, set some goals, learn the basics and chart a course. You can, and probably will, makes changes to your plan, but you need to always have one. Just like that bank isn’t going to take a bad risk with their money, you shouldn’t carelessly risk your time and money, either.

Sweating the Small Stuff

I have never started a new job, or venture, where I didn’t encounter things I wasn’t expecting. You never know what all a job consists of until you are actually doing it and that’s just as true with starting your own business as it is with anything else. You probably know about the big things. I need a website, I need to get some traffic to that website and I need to figure out a way to turn those visitors into customers. Makes sense, right? These are important things that you can’t neglect and expect to stay in business.

What about cropping and uploading photos? Are you sure your profile picture looks good enough? What about link placement? What does link placement even mean? Should you read a book about that? And don’t forget the widgets. Yes, widgets. Make sure you’re using the best widgets.

You see, there’s a lot of stuff that needs to be done. It’s not quite as simple as get website, get traffic, make customers, cash checks. There is a lot of stuff to learn and a lot of tasks to complete, but some are more important than others. Don’t get bogged down with the small stuff. Here’s something that a lot of “experts” won’t tell you. Sometimes you don’t need the best. Sometimes good enough is good enough. If you spend a whole week researching and testing every SEO widget known to man, instead of putting content on your website, you are sweating the small stuff. Spend a little time finding a good one and then move on. People who can’t prioritize, or keep things in perspective, are less likely to be successful.

Ignoring the Budget

I can hear it now. Budget! What budget? One of the reasons you’re starting an online business is because you don’t have a lot of money. I know that’s not true for everyone, but let’s face it. The low entry cost is one of the appeals of an online business.

I’m not saying you need to have a detailed budget, complete with pie charts and spreadsheets. What I am saying is that you should have some idea of not only how much things will cost, but how much you are willing to spend. It’s true that you start an online business on a shoestring business, if you go about it right, but you’ll be surprised at how many ways the internet has to chip away at your bank account. One the surest ways to find out all the ways to spend money online is to start your own web based business. The idea was to make money, but you can easily find yourself spending what you already had.

Come up with some figures that work for you. If you are going to do things right, you should probably count on sinking a couple hundred bucks just to get off the ground. Web start-ups may be low cost, but the kind of foundation you need for long term success isn’t completely free. The costs that may sneak up on you are the ones pop up more unexpectedly. One day you learn that Facebook ads are a thing. Cool…spend a little to get that rolling. That awesome app that will automate your work has a price tag, too. Ten minutes ago, you didn’t know it existed, but now you’ve got to have it. It all adds up and, if you don’t keep track of it all, you can find yourself wondering where all your money went, while your competitors are rising to the next level.

Getting Lost In the Social Media Maze

It seems like social media has taken over the internet. Mobile devices continue to take more and more of the web traffic share, as fewer people spend their personal time on desktop and laptop computers. The latter two are most often used for work, while mobile devices are used for personal activities. I know I don’t need to tell you that a huge chunk of that time is spent on social media.

If everyone is on social media, naturally businesses want to be on social media, as well. How else are you going to get your products and services in front of people? While there is some logic to that, it’s sometimes hard to know where to put your energy when it comes to social media. There’s Facebook, Twitter, Pinterest, Instagram and more. Each one a little different and each one skews towards different demographics.

While it might be smart to have a presence on all, or most, of the major social media platforms, it can be a major time drain. You can find yourself wandering the social media maze for hours at a time without any real benefit. If it takes you a full work week to get a few followers, none of whom may actively engage with your business, that’s not time well spent. Use your social media time carefully and if a platform isn’t producing results, focus on the ones that are. Even better, there are a number of programs out there that can automate much of your social media activity. Find one that suits your needs and free up your valuable time for your core business.

Skimping When You Shouldn’t

After talking about not wasting time and money and keeping yourself within a set budget, it may seem like I’m contradicting myself with this one. But I’m not. This one also falls into the same category – planning and spending your money wisely. Being conscious of costs includes not skimping on things you when you shouldn’t. There is a reason people use that old adage about getting what you pay for.

Here are a couple of quick, but important, examples. If you are serious about starting and operating a successful online business, you don’t want a web address like this: johnnyswebbiz.blogspot.com. There are many platforms that offer the means to set up a free site and, yes, sometimes it’s okay to start out that way. I’m not saying you can’t make money by going that route, but it’s harder and it shouldn’t be a permanent solution. If you can at all, you should spend the money on your own domain right from the start. Let’s be honest. How many times have you spent money at a johnnyswebbiz.blogspot.com vs. a thisisaprofessionalbusiness.com?

The second example of something you shouldn’t be cheap about is choosing a theme for website. Now, I’m assuming here that you are building a website with a blog platform framework – something like WordPress. If you don’t already know, that is actually a solid choice and you’d be amazed if you knew how many familiar brand name businesses actually run on such a platform. By this, I mean a paid version, not the freebie package. The theme is what gives the website a particular look and style. There are free ones, but you don’t want that. Professional themes don’t really cost that much. For somewhere around $30-$50 dollars you can get a nice, sharp looking theme that will make your site look like you hired a web designer.

I’m giving you just two examples here, but these are the things that matter. Think of it like you are walking into a business. If you are going to buy some nice clothes, do you want to walk into a place that looks like a mechanic’s shop, or do you want to walk into a showroom that looks like it was meant to be a clothing store. If you want to pinch pennies, better to do it behind the scenes than on the customer-facing side of your business.

Believing You Can Buy Off the Rack (One Size Fits All)

To revisit the clothing store analogy, have you ever bought something that was supposed to be one size fits all? If you have, I’m sure you know that one size does not fit all. Or rather, that one size fits all very poorly. That same shirt may be too small for me and too big for you. Sure, we could both wear it, but wouldn’t it be better to simply buy one that was made for your size?

This applies to all sorts of things in life, as I’m sure you know. It’s true when starting an online business, too. There are a lot of good tools and handy programs out there, but what works for me may not work for you. My business and my website may be doing great, but I may have an entirely different customer base and entirely different needs. Of course, a lot of stuff can be used for a variety of purposes and there’s no need to reinvent the wheel if you don’t have to. Keep in mind, though, that you need to build your business and take care of your audience. Tailor everything to that. If someone tries to sell you something and says you have to do X,Y and Z just like this, don’t buy it. Good tools and good programs should be adaptable to your needs.

Cookie Cutter Syndrome

This one ties in to the last one. Just as there’s no one size fits all solution, you don’t want fall into the cookie cutter syndrome. It’s good to check out your competition and see what they’re up to. It’s also good to see what people in other lines of business are up to. In either case, there are things you can learn that will help you improve your business.

The danger here, especially if you are new to all of this, is to start modeling your business too closely after someone else’s. I’m not even talking about legal issues like infringement, or plagiarism. I’m talking about creating your own brand, developing a unique personality for your business and telling your own story. Amazon.com is really good at being Amazon.com. If you start Nile.com and the only difference in what your doing and what they’re doing is the name of the river you used for the name…well, that’s not enough to make me start shopping on the Nile.

Bring something new to the table. Pick your own niche and do it in a way that no one else can. This is how you compete with big companies and corporations with deep pockets. Do what they can’t. Be uniquely you.

False Expectations

If you’re still sticking with me, kudos to you for reading this far. Remember way up the page when I was talking about working in your pajamas with just a laptop and a cup of coffee? That sounds pretty good, doesn’t it? Darn right, it does. Here’s a little personal revelation – I’m kicked back in bed with my laptop right now, while I’m writing this. It’s not a bad way to do business.

Here’s another little revelation. Despite being a relatively accessible way to start a business and a flexible way to build a business, online marketing isn’t all that glamorous. Building websites isn’t the most exciting way to spend your time. Writing articles can take a lot of time and even longer if you want to do it well. Not punching the clock for someone else gives me a lot of control over how I spend my time and I don’t miss sitting in rush hour traffic, but working online is still work.

Probably the biggest false expectation I run across is about income. There are a lot of people looking for a get-rich-quick scheme that make them financially independent overnight. Some of them will spend a small fortune buying into programs that make empty promises about easy money. The truth is, life just doesn’t work that way. If you want to build any kind of business, it takes hard work. For that matter, you won’t even rise to the top working for someone else without putting in the work. Success is always earned and, more often than not, it takes a journey to get there. You may make progress sooner rather than later. You may start to see money come in after a couple of months, or it may be several months. Part of it depends on how much effort you give and some things are outside of your control.

Be patient. Be realistic. Set goals and work towards them. Settle in for the long haul.

Swinging A Hammer Where There Isn’t a Nail

To put this one a different way, if there’s not a problem, no one needs your solution. Would you try to sell sand to a guy that lives in middle of the desert? No, me neither.

People get online every day looking for solutions to their problems. Every time someone does a search on Google, that’s really what they’re doing. If I need a certain kind of battery for my camera, I search online and find one. If I don’t feel well, I put my symptoms into Google. Sitting at home bored on a Friday night, maybe I’ll stream a movie, or play a game online. Some problems are more serious than others, but a successful business is one that is offering solutions to real wants and needs.

Being A Career Student

Maybe you’ve heard someone called a career student. You know, that guy who has been in college for ten years, but he still doesn’t have a degree and never really seems to have a job. Instead of going to work, he’s made a career out of learning. If you want to succeed in your own business, don’t be that guy.

Let me clarify a bit. You should never stop learning. If you’re in business for yourself, it’s actually very important that you continue learning about your particular niche. You want to be an authority in your field. This builds trust and wins over customers. Also, there’s a lot to learn about running a business if you’ve never done it before. If you’re not savvy with technology, or website building, that’s something else you’ll need to get up to speed on.

You should absolutely invest time in learning all you need to know to be successful. What you should not do, though, is get so caught up in the learning that you never take action. If you’re only looking for a hobby, maybe this doesn’t matter as much. To build a business, at some point you need to take what you’ve learned and do something with it.

An effective way to build your business, while learning the new skills required, is to take things in stages. Follow a set training path that includes actionable tasks that can be accomplished along the way. This will create a balance between learning and doing, while avoiding the kind of procrastination that keeps you from achieving your goals. By doing things in a steady, deliberate way, you’re also giving your business stability and increasing the chances for its long term success.

Onward to Success!

We’ve covered a lot of ground in this article, but if there’s one thing I hope you take away from it, it’s this. Starting an online business really is achievable. To be successful, though, you need to treat it like a business. That doesn’t mean you need to be overly rigid, or try to act like you’re running a corporation. An online business is a great way to be your own boss and have some flexibility and independence in your life. By all means, have fun!

Avoid the common pitfalls and keep moving forward.

One Last Thing…

There are many ways to go about creating and marketing your online business. There are also ways to streamline the process and avoid a lot of guesswork, especially if you are new setting up websites and doing online marketing. The program I recommend, if you are starting from scratch, is Wealthy Affiliate.

I joined this program myself, even though I already had experience in this business. Why? Because they provide an efficient and streamlined framework to work within, as well as an incredible amount of training resources. It’s free to give it a try. Just click on the image below and see for yourself – no risk, no financial obligation.


13 thoughts on “10 Mistakes to Avoid When Starting an Online Business”

  1. I have encountered a lot of career students during my time in this affiliate marketing space.  Some people attend every conference, buy every product about online business but never actually launch anything or start a website and distracted by something else they saw on the internet.  I love the swinging the hammer at air metaphor, if there isn’t a problem, no one is going to buy your solution.

    • Yes, some people are so interested in affiliate marketing that they spend all their time reading about it and never get around to doing it. There’s a key difference between a hobby and a business. One costs money, the other makes money.

  2. Hey! Not having a ” game plan” how you called it can cause a lot of headache, hard work as well as long working hours that could otherwise be saved if had a proper plan and a goal to work on. From  my experience as a football player, it requires a lot of hard work, which is often to no avail, from the players if they don’t have a proper plan how to score and defend. I liked your article and how you explained each of your points, and they were all valid ones.

    I have one question: How much importance should one put in the social media advertising of an online business?


    • Heku, thanks for your feedback. Your question about social media advertising is a good one. There are a lot of different opinions out there about this topic, so it can be hard to know who is right. Like most business decisions, the bottom line should be wants works best in your specific case. That being said, I do have my own opinion. I feel like many – maybe most – people spend too much time on social media, especially at the beginning of their business. It is similar to the point I made about being a career student. Used effectively, social media can drive traffic and sales, but it can also be a huge time drain. If you spend too much time on social “promoting” your business, it can actually take time away from doing business. There has to be some balance, in my opinion, and for a beginner, I would recommend focusing first on producing content and getting your website streamlined.

  3. Hi, Randy.
    Thanks for sharing the information on mistakes to be avoided while starting online business. I would say with open heart and appreciate the efforts you put in to explain such a difficult topic in very concise manner. Believe me, all the ten points you shared are so relevant and they touched my heart. So step by step I will be focussing on each point and strengthen my online business, as you correctly said-learning never stops.
    Warm Regards,
    Gaurav Gaur

    • Hi, Gaurav. I am happy that you found this article useful. A lot people enter the world of online business and go through a lot of trial and error, before figuring out what works and what doesn’t. Unfortunately, a lot of them simply give up. Being successful in my own business means helping others be successful in theirs. I am planning a follow-up article to this one in the near future, which will address some other common mistakes. Since you found this one useful, be sure to learn about some more potential pitfalls in starting a business.

  4. Not having a game plan is on of the biggest mistake that one could ever make when it comes to starting an online business, And i must tell you its one of the most made mistakes as people today just jump into businesses especially online business without planning and at the end you see them running out the same way they in.

    • I agree with you, David. To be honest, though, I’ve been guilty of going into things without a game plan in the past and had to learn the hard way. Now I know better, so hopefully, I can help others avoid tripping over the same hurdles. Starting an online business isn’t that hard, compared to a lot of other ventures, but it’s still a business and needs to be treated as such.

  5. Thank you so much for giving us this wonderful article. Your article is really very informative and I have gained a lot of knowledge which is very helpful to me .I’ve been working in the online world for a long time, and of course I have to be tactical in order to succeed in the online world, as well as avoid some common mistakes. Personally I am affiliate marketing through the Wealthy Affiliate website and I am a successful affiliate marketer and I think the best place to make money in the online world is affiliate marketing place. The Wealthy Affiliate website has provided me with many tutorial videos to learn how to work in this place. As well as taking my website to a good level and I’ve got some wonderful tips through your article that I will definitely follow. 

    I will definitely pass your article on to my friends and they will certainly share with you their new experience as they follow your wonderful advice. Can I share your article on my social media?

    • Wealthy Affiliate is a good program. I’m glad you’re having success with it. You are welcome to share this article, or any others, on social media. Thanks!

  6. Hey, I want to say a big thank you for taking out your time to share such an amazing article “10 Mistakes to Avoid When Starting An Online Business”.Believe me this is going to be helpful to so many people out there. Everybody wants to be the boss of their own but all these points we do not out into consideration.Thanks for listing out these points. 

  7. Randy, liking your 10 mistakes to avoid list. What I have noticed of successful internet entrepreneurs is that they are laser focused on what they want to achieve and then work hard and consistently to achieve it. As you say it is about the game plan and then investing time, energy and money into it. A great idea for a web site is not going to bring in the money on its own; too many vloggers out there sell you a dream of earning money while sitting on a beach! It’s not going to happen (well not straight away anyway). 

    • James, I think many hear “passive income” and that happens automatically by setting up a website. “Passive” only happens after a whole lot of “active” and, really, the work is never completely finished. Like any other occupation, the income is tied to the work.


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