Starting a Digital Business? Here Are Common Pitfalls to Avoid

July 10, 2020 5 min read

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Starting an online business requires some planning. An entrepreneur needs to gauge demand, understand how SEO and digital ads work and know how to acquire customers cost-efficiently. If the formula works, the business can scale rapidly. As stated in the “Enabling Digital Entrepreneurs” report by World Bank Group, “many digital entrepreneurs are ‘born global’ and have the ability to grow and scale across borders very quickly.” 

Online spending has skyrocketed in recent years, and continued growth is likely as people continue to stay home, which "creates huge opportunities for internet stores,” says Mathieu Jang in an interview. He’s the co-founder of Affiliate Institute, a Las Vegas-based digital marketing training firm that helps members grow revenue online. 

Jang created a 12-week accelerator program that optimizes students’ affiliate-marketing practices. Aside from the technical aspects of ecommerce, he says it’s critical to have the proper mindset and remove notions of a personal limitation: “The world doesn’t happen to successful marketers. Top performers happen to the world.”

In the U.S., ecommerce now represents 16 percent of all retail sales, according to the Commerce Department. And Amazon.com accounts for more than one-third of ecommerce. Thus, a small business can potentially reach a massive audience. However, there are pitfalls to avoid.

Related: 3 Things You Need to Know Before Starting a Delivery Service Business

1. Not understanding your target customer

You can burn plenty of cash by running ineffective ads. Bad marketing campaigns increase the cost of acquiring a customer, which is a crucial metric for a digital venture. There’s much noise on social and the web, which can confuse how novices approach campaigns. You need to truly understand the target audience in order to optimize ads. That means being effective with location, interests, design, calls to action and other factors that increase conversions and lower customer-acquisition costs.

The sales volume for merchandise is huge. For example, the online market for apparel, footwear and accessories will hit $4 trillion this year. Shopping on the web has also increased demand for online services like SEO, website building, graphic design and advertising. A high level of understanding means you’ve properly identified a niche. By knowing who’ll buy and who won’t, you can optimize a website’s content based on that niche, putting you in a better position to create the appropriate landing pages, newsletters, brochures and social posts to attract relevant traffic. When you publish better content, you’ll improve inbound marketing metrics, as well as increase user engagement.

Owners of physical storefronts had it easier because a target consumer was often someone who lived nearby or an adjacent town, but online obviously has no geographic boundaries. It helps to create a digital persona of who you’re targeting. What does your ideal shopper look and behave like? What style of clothing or shoes are they seeking? Which features matter most? You may be able to find profiling tools on social platforms that help to create target profiles. A business owner cannot successfully carve out a niche without identifying their customers.

2. Working as a lone wolf

It helps greatly to already possess knowledge of online practices like SEO, ads, ecommerce, email campaigns and social media best practices, but there can be frustrating blind spots. You may be good at running Facebook ads but flounder at writing landing pages. Or you may have high open rates on email campaigns but suffer low purchase conversions. Scott Smith, the founder of 7 Figure Surfer, said in a recent phone call, “During my six years working online, I often had to figure it out myself. I started from scratch and spent thousands of dollars in the process.” 

Smith overcame these hurdles by getting a few mentors who showed solutions, as well as provided encouragement. A seasoned veteran can quickly teach entrepreneurs what works and what doesn’t, saving them headaches, time and money. It’s a good idea to attend conferences, meet-ups and networking events to exchange contact info with gurus. Leveraging other people’s expertise (in areas where you are weak) boosts the efficacy of campaigns. When setting up an ecommerce venture, small tweaks can pay big dividends.

3. Not outsourcing or using automation tools

Outsourcing enables business owners to cost-effectively tap the skills of independent contractors, streamlining the business because they’re better at specific tasks than you are. Virtual assistants free up time so you can focus on acquiring customers and providing after-purchase support. Hiring a video producer to create a popular TikTok video is a more effective use of time and budget than doing it yourself.

Or use a tool that’s saving business owners time. Neuro.net, the automation tool, acts as the outsourced call center for retail customers to get support from virtual agents in even complex conversations. And according to the company, it simulates human emotions so well that 99 percent of people don’t know they’re talking to a robot agent. Now that’s a bold claim for an automation tool, but data-processing company Powerry clearly believes it, given their recent $5.3 million dollar investment in Neuro.net. Nevertheless, it’s an affordable option for business owners who can’t quite afford full-time customer-support agents at their current growth stage.

It’s extremely important that business owners spend their limited time on activities that are crucial for success. Non-essential tasks should be delegated to others. An online business can reach global audiences and scale rapidly. Know your target audience, network with experts in a similar niche and build a team infrastructure that can scale your venture.