7 Reasons Why So Many Online Businesses Fail (And How to Succeed Instead)

Starting an online business is an exciting journey, full of potential and opportunity. Yet, the road to success is full of challenges that many entrepreneurs fail to navigate. 

Through my own experiences and observations, I’ve identified seven common pitfalls that hinder online business success. 

Let’s take a look at them and see how you can circumvent them.

1. Ignoring the Wealth of Free Resources

In today’s digital age, education is abundantly available for those willing to seek it out. Platforms like YouTube, Twitter, and numerous blogs offer extensive knowledge on virtually every aspect of running an online business. 

The key is to be proactive and utilize these resources to your advantage. Before posing questions to others, take the initiative to search for answers yourself. You’ll find that most solutions are just a Google search away, and there are plenty of free communities eager to help.

Actionable Tip: Set aside a specific time each week dedicated to learning something new related to your business. This could be through watching YouTube tutorials, reading relevant blog posts, or participating in forums within your industry. 

Make a list of topics you’re curious about or areas where you need improvement, and tackle one each week. 

Document your learnings and think about how you can apply them to your business.

2. Lacking Resourcefulness

The ability to be resourceful and independently find solutions is crucial. Many entrepreneurs stumble over questions like, “How do I hire a programmer?” or “Where can I find a video editor?” 

Resourcefulness is the backbone of entrepreneurship. It’s about making the most of what you have, finding creative solutions to problems, and navigating the path to success, even when resources seem limited. 

Entrepreneurs often face questions and challenges that seem complex at first glance, such as hiring the right talent or finding specific services. The key lies not just in asking these questions but in actively seeking out the answers through research, networking, and experimentation.

The journey of an entrepreneur is filled with challenges that can appear insurmountable at first. The secret to overcoming these challenges is to break them down into smaller, manageable tasks. 

This approach not only makes the problem less daunting but also creates a clear path forward, step by step.

Example: Launching a Digital Marketing Agency

Imagine an entrepreneur, who dreams of launching a digital marketing agency but feels overwhelmed by the perceived complexities, such as building a website, acquiring clients, and offering a range of services. 

Instead of succumbing to paralysis by analysis, he decides to tackle each challenge one at a time.

  1. Building a Website: Without the budget to hire a web developer, he uses a website builder platform that offers drag-and-drop functionality to create a professional-looking site. By dedicating time to learning the basics of web design and SEO, he sets up an online presence without significant expenses.
  2. Acquiring Clients: Rather than investing heavily in advertising from the start, he leverages social media to share valuable marketing tips, joining local business groups to offer free initial consultations. This strategy helps build credibility and attract the first clients through word-of-mouth and social proof.
  3. Offering Services: Recognizing the need to offer a wide range of services but lacking the manpower, he collaborates with freelancers who specialize in areas like SEO, content writing, and graphic design. Platforms such as Upwork and Fiverr become invaluable resources for finding talented professionals willing to work on a project basis.

Through this process, he learns the importance of being proactive and resourceful. Each challenge, once broken down into smaller tasks, becomes an opportunity to grow and learn. 

The journey of setting up the agency teaches he valuable skills in web design, networking, and project management, underscoring the idea that resourcefulness is about leveraging available resources to achieve your goals.

Being resourceful is a mindset. It involves being curious, asking the right questions, and being willing to step out of your comfort zone to learn new skills. It also means not being afraid to ask for help when needed while using every setback as a learning opportunity.

Actionable Tip: When faced with a challenge, break it down into smaller, more manageable tasks. 

For example, if you need to hire a programmer, start by defining the skills and experience required for the job. Next, research the best platforms to find freelance programmers (like Upwork or GitHub). Then, create a detailed job posting, outlining your project needs and expectations. 

By approaching problems one step at a time, you’ll find them less daunting and more solvable.

3. Hesitation and Lack of Effort

Procrastination and inaction are the enemies of success. When I first learned about the Amazon Influencer program, I didn’t hesitate. I jumped right in and ended up making over $6,000 in a single month. 

The lesson? Start now, learn by doing, and adjust as you go. Waiting on the sidelines will get you nowhere.

Actionable Tip: Identify a small, manageable task that will move your project forward and commit to completing it within the week. 

This could be anything from registering a domain name to setting up your business’s social media profiles. The key is to make it achievable and deadline-driven. 

Completing these small tasks will build momentum and confidence, propelling you to tackle larger challenges.

4. Overemphasis on Competition

Being aware of your competitors is important, but obsessing over them can derail your focus. 

Instead, concentrate on how you can differentiate and improve upon what’s out there. Remember, competition indicates a healthy market. 

For instance, take the competitive landscape of email marketing tools. Despite the dominance of established players like Mailchimp, there’s always room for innovation that addresses unmet needs.

One such entrepreneur noticed that small businesses and solopreneurs were struggling with the complexity of these platforms. They conceptualized a new solution, “Simplify” designed with an ultra-user-friendly interface specifically for this audience. 

Simplify.com could focus on ease of use, with drag-and-drop campaign builders and straightforward analytics, making email marketing accessible to those with limited technical skills. 

By targeting this specific pain point this new tool could carve out a niche for itself, demonstrating that even in crowded markets, tailored solutions can find success.

Actionable Tip: Conduct a thorough analysis of your competitors to identify gaps in the market. 

Look for areas where customers express dissatisfaction or where needs are not fully met. Use this information to brainstorm how your business can offer a better, different solution. 

This could involve innovating on an existing product, providing superior customer service, or tapping into a niche market that competitors have overlooked.

5. Quitting Too Soon

In the fast-paced world of online entrepreneurship, it’s easy to fall prey to the allure of instant success. Stories of viral hits and overnight sensations flood our feeds, painting a picture of quick triumphs. 

However, the reality for most successful online businesses is a journey marked by perseverance and sustained effort over time. The inclination to quit too soon, before giving your project the opportunity to develop and flourish, is a significant barrier many face.

One common misconception is that if a business doesn’t take off immediately, it’s destined to fail. This mindset neglects the fact that building a solid foundation, gaining customer trust, and refining your product or service offering are processes that inherently take time. 

For instance, consider the evolution of content platforms. Many of the most popular blogs and YouTube channels we see today didn’t achieve significant traction until they had been consistently producing content for years. Their success is a testament to their creators’ refusal to give up in the face of slow initial growth.

Setting realistic expectations is crucial. Understanding that growth is often exponential rather than linear can help manage the impatience and discouragement that come with slow starts. 

Persistence does not mean blindly sticking to a failing strategy. It means continuously learning, adapting, and evolving based on feedback and changing market dynamics. 

It’s about finding the balance between giving your strategies enough time to yield results and knowing when to pivot or make adjustments based on performance data and customer feedback.

Actionable Tip: Set a realistic timeline for your project, and mark significant milestones on a calendar. Commit to a minimum period of dedicated effort (e.g., one year) before reassessing your venture’s viability. 

Celebrate small victories along the way to stay motivated. If you find yourself losing interest or motivation, revisit your original goals and the progress you’ve made to reignite your passion.

6. Imitation Over Innovation

While it’s tempting to emulate successful models, true success comes from carving out your unique niche. So, while it’s natural to look up to successful models and draw inspiration from them, the key to long-term success lies in innovation and differentiation. 

Copying others, like attempting to mimic Mr. Beast’s YouTube formula often leads to mediocrity. It’s a strategy that overlooks the essence of what made these models successful in the first place: originality and the ability to fulfill a unique need or interest in the market. 

When businesses focus solely on imitation, they miss out on the opportunity to connect deeply with their audience through unique offerings and perspectives.

True innovation requires stepping out of the shadows of giants and shining a light on your unique value proposition.

Find what makes your business unique and what resonates with your audience. 

Your audience seeks authenticity and originality. They are drawn to brands and creators who share genuine stories, offer unique insights, and present innovative solutions to problems. 

Authenticity resonates with people on a personal level, fostering loyalty and trust that imitation simply cannot replicate. When you infuse your business with your personal touch and authenticity, you create a brand that people want to support and engage with.

Actionable Tip: Spend time brainstorming what unique value your business brings to the market. Consider your personal experiences, professional background, and passions. How do these aspects of who you are translate into a unique business idea or approach? 

Create a UVP statement that clearly articulates what sets your business apart from others. This will be your north star in developing branding, marketing, and operational strategies.

7. Believing You Need Special Skills

The digital age has democratized the process of starting and running an online business, making it accessible to a broader range of individuals than ever before. Despite this, many aspiring entrepreneurs hold back from pursuing their business ideas, believing they lack the necessary technical skills. 

This misconception can be a significant barrier to entry, but it’s one that can be overcome with the right approach and mindset.

The Role of Digital Platforms in Bridging Skill Gaps

Digital platforms and the gig economy have revolutionized how we think about skill sets and project execution. Platforms like Upwork, Freelancer, and Fiverr serve as bridges between entrepreneurs and the vast pool of global talent specializing in various fields, from web development and graphic design to digital marketing and content creation. 

These platforms make it easier than ever to find and hire professionals who can complement your skills, fill in the gaps, and help bring your vision to life.

Example: Launching an E-commerce Store Without Web Development Skills

So, one of my regular readers, Jordan, wanted to launch an e-commerce store to sell handmade crafts but had no experience in web development or digital marketing. 

Initially, Jordan felt overwhelmed by the technical aspects of setting up an online store, such as creating a website, setting up payment processing, and implementing a digital marketing strategy.

However, instead of allowing these perceived limitations to halt progress, Jordan took a strategic approach:

  1. Website Development: Jordan used Shopify, a platform designed to simplify the process of building and managing an e-commerce store. Shopify’s user-friendly interface and customizable templates allowed Jordan to set up an attractive online store without needing to code.
  2. Digital Marketing: Recognizing the importance of marketing but lacking experience in the field, Jordan hired a freelance digital marketer from Upwork. The freelancer helped him develop a marketing strategy that includes social media promotion, email marketing, and SEO to attract customers to the store.
  3. Product Photography: Understanding that high-quality product images are crucial for online sales, Jordan engaged a local photographer he found through a recommendation on a small business forum. This partnership ensures the products are showcased professionally on the website.

As you can see from this example, starting an online business is less about possessing every skill personally and more about knowing how to leverage available resources to assemble a team that can address various aspects of the business.

Cultivating a Learning Mindset

While it’s possible to launch and grow an online business without being an expert in every area, having a willingness to learn is crucial. Entrepreneurs should be open to acquiring new knowledge and skills that can help them better understand and oversee their business operations. 

This learning mindset not only aids in making more informed decisions but also empowers entrepreneurs to communicate effectively with their team and contractors.

Actionable Tip: Make a comprehensive list of all the skills required to launch and grow your business. Next to each skill, mark whether it’s a strength, a learning opportunity, or a candidate for outsourcing. 

For skills you lack, research freelancers or agencies that specialize in those areas. Platforms like Upwork, Freelancer, and Fiverr are great places to start. 

When hiring, be clear about your expectations and work closely with your hires to ensure they understand your vision.

In Conclusion

The journey of entrepreneurship is filled with learning and growth. By avoiding these common pitfalls and adopting a proactive, resilient mindset, you’re well on your way to building a successful online business. 

Remember, the most significant barrier to success is often our own inaction. So take that first step, remain patient, and persistently pursue your vision.

Check out our other articles in the How To Start a Business Series.


I am a branding and naming consultant with 16 years of experience. I believe in building a strong brand name that identifies your visions and that of your business. A brand identity motivates you and your team to achieve success.

4 thoughts on “7 Reasons Why So Many Online Businesses Fail (And How to Succeed Instead)”

  1. I would like to add another reason I believe many online businesses tend to struggle. A lack of a clear value proposition. In the rush to go to market, some entrepreneurs forget to define what truly sets their product or service apart from the competition. This leads to difficulty in capturing the target audience’s attention and converting interest into sales.

    • Thanks Carl. Yes I agree. Defining properly a unique value proposition early on can be a game-changer in how a business communicates its offerings and engages with potential customers.

  2. The point about “Ignoring the Wealth of Free Resources” really hit home for me. It’s easy not to trust the free sources available at our fingertips. Personally I find the online communities sometimes share some valuable gems from their own experiences. People are always willing to share their success stories and show what they know, and you can learn a lot from these.

    • Thanks for your comment Myrl. I agree some online communities can be a treasure trove of resources for entrepreneurs. The problem is that in some forums you have to sift through a lot of nonsense before you find the gold 🙂


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