The Online Adventure of a Stay at Home Mommy

Business Challenges Faced By Online Businesses

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It required a large amount of capital to start your own retail business. Most of these costs were associated with building, renovating, or renting a store. Today, anyone with a modest amount of capital can build an e-commerce website that can compete with established brick-and-mortar retailers.

E-commerce has changed how business works. It’s more than a trend; it’s a global business model. Still despite how easy it easy to set up shop as an entrepreneur, you face many challenges before you can create a successful business.

Here are 4 common challenges and the steps to take to meet them:

1. Unexpected technical issues:

If you have your own server and a local area network, you will find that for the most part, your computer system will be stable and reliable. However, what do you do if things go wrong? For instance, what do you do if your server crashes and you didn’t have enough time to backup some critical information? In a case like this, you can use data recovery services to get your crucial information back.

Handle unexpected technical problems by taking following 2 steps:

  1. Make sure you do everything you can to prevent problems. Do regular maintenance of your hardware. Keep your software up-to-date with the latest upgrades. And use best practices and anti-virus software to protect your computer system from problems, which can include someone trying to hack into your machines.
  2. Outsource what you can’t do yourself. This includes getting IT help and having a list of services to call in an emergency when you do happen to have a problem.

2. Reputation management.

While you may do your best to run your business with integrity, you can still have reputation management problems.

For instance, a customer might complain on a consumer website about your company because they didn’t get a refund to or that their shipment was lost.

These may not actually be your fault. The product may have passed its warranty; your fulfillment company may have made an error in the shipment.

Small things can quickly spiral out of control. Other customers may decide to join the chorus; business partners may begin to suspect you of chicanery; and potential customers may decide to buy from another vendor.

Manage your reputation by taking the following 2 steps:

  1. Be scrupulously honest. Don’t cut corners, take shortcuts, or omit information. Don’t become an affiliate for a merchant who has questionable products even if the commission is high. Also, make sure all your employees do the same. Do your best to deliver on all your promises.
  2. Hire a reputation management company to keep on top of bad press and to refute allegations made against your company and present the reasons why things went awry.

 3. Keep positive cash flow.

Business is based on a simple equation: you must have more money coming in then going out.

Unfortunately, it’s easy to spend more than you earn when you run an e-commerce business.

You have to pay for numerous services to run your business. You have to pay for web design, IT, electronic payment processing, landing pages, email marketing services, advertising, and so on.

If you are not careful, you can end up spending more money than you make. Even if you start out with sufficient capital, it can be quickly drained if you consistently spend more money than you make.

Once you hit a point of negative cash flow, you can quickly lose control of your entire business because you will have your essential services cut off.

Maintain positive cash flow problems by taking the following 4 steps:

  1. Don’t just rely on your financial statements to see if you are profitable. Instead, make sure that you have more than enough cash flow generation.
  2. Shore up extra cash that you make for unexpected expenses rather than immediately reinvesting it all in growing your business. This way if there is an emergency, you can meet it.
  3. Don’t borrow more than you can pay back.
  4. Hire a professional accountant to help you keep track of all your business accounting rather than trying to do it all yourself. This way, you won’t fall behind because you’re busy with other aspects of your business.

4. Stay abreast of the latest marketing techniques.

Things change fast online. One month a favorite method of advertising may work wonders and the next month it is so saturated that you spend more money on advertising than you make from sales.

Stay abreast of the latest marketing techniques by taking the following 3 steps:

Constantly measure the metrics of all your advertising to be able to quickly sort out changes in revenue generation.

  1. Attend industry conferences and get the latest courses on the best way to promote your business.
  2. Have a mix of different advertising methods so that if one unexpectedly dries up, you will still be making money from your other ads.

Business As Usual

Starting an e-commerce business may be easier to get into than opening up a brick-and-mortar company, and you may have huge advantages like global exposure and a business that runs 24/7, but you are still running a business that follows all the usual rules—taking care of problems before they happen, maintaining a good reputation, managing your money wisely, and advertising your goods effectively.

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