Why is your business not growing? The answer to this question is not as simple as it sounds. There are numerous factors that affect the growth of your business. These factors can be as simple as heavy competition or complex as a lack of necessary knowledge.

Research shows that 90% of online businesses fail within four months of their launch. This is an alarming statistic. What you want is to be in that narrow window of 10% so that you have a successful business that lasts long. So how to make sure that your business stays among the ones that are successful.

In this article, we’ll delve into some of the reasons that lead to business failure, and few ways to prevent these problems to keep your business steadily growing.

Why Online Business Startups Fail? 10 Reasons You Must Read

1. Business Identity Not Well Defined

Before you start a business you have to answer some questions that will define your identity and what you represent. A few simple questions need to be answered:

  1. What am I providing?
  2. Who is my target audience?
  3. Why is it needed?
  4. What benefits am I providing?
  5. What are my long-term objectives?

Answers to these questions are crucial as they define who you are and what you can provide your target audience with. If you can’t answer these basic questions then you may need to rethink the whole idea of your business. If you are thinking of selling something just because it is cool or trendy rather than answering all the who’s and why’s, your business is in trouble. You will be lost in the plethora of businesses if you don’t offer something unique and have an identity of your own to stand out in the crowd.

2. Lack of Business Knowledge

Lack of Business Knowledge

Knowledge is power. You have the power and authority of your business in your hands.

Today it is quite easy to set up an online business for anyone. There are plenty of platforms to sell your products, which you can set up only in a few hours. But with an increase in quantity, the quality goes down the hill. The market is filled with an abundance of online businesses, so to make yourself visible among them you must have the knowledge of how it works. In this modern age if you don’t have knowledge of ever-changing advancements you can’t compete with your rivals.

If you have a successful business that is generating a few dollars a week, but you don’t know how to manage costs and production, you may have to shut down your business really quickly. Moreover, if you don’t know what the market demands and what your competitors are doing they may just leave you in the dust. Operating a business is not just simple mathematics, but it is a mixture of factors including finances, implementation of modern advancements, knowledge of the market, and set-goals. So before you start a business get a thorough knowledge of each factor and base your business strategy according to that.

3. Lack of Business Goals

“A goal properly set is halfway reached.” –Zig Ziglar. Many online businesses fail because they lack goals or targets to achieve. Yes, you have this ambiguous goal of earning money or selling whatever your product is to gain profit. But what you need are more specific goals. These goals must be realistic and attainable. For Example:

  1. Make $15,000 a month through online sales.
  2. Increasing the conversion rate by 15%
  3. Sell 200 products in a month
  4. Increase annual revenue by 10%

Without defined goals, it will be like shooting in the dark. You won’t have anything to compare your progress with, you won’t know what you are striving for. Businesses fail to succeed in the log-run because they have no objectives. As you remain uniform throughout your course and don’t take steps to out-do your previous achievements, eventually your business will collapse to make any progress.

In the matter of setting goals, start small, at the beginning of your business. Once you meet that goal you can set new goals accordingly. Also, keep in mind that you are doing the right work to achieve your goals. If your goal is to increase revenue, but you don’t work on your marketing strategies, you may have trouble achieving your goal. It is important to set smart goals and effective strategies to reach those goals.

4. Heavy Competition

Heavy Competition

In some cases, the reason businesses fail is as simple as heavy competition. As there are several businesses on the internet selling the same product as you are. It can be really hard to come out as a unique one. To beat your rivals you have to review them thoroughly and then identify their weak points and turn them into your advantage.

To compete with an already established business is difficult but not impossible. The key to success lies in determining what your competition is lacking in and creating content that answers all the questions that customers ask.

For Example: if you are selling cordless vacuum cleaners and you notice that your competitor doesn’t have a “how to use” page which can be confusing for new users, or another competitor has really high prices. Understanding these weak-links and making amends to your business model and strategy can be the edge you need to succeed. Once you start a business, don’t just focus on your sales, but also keep a close eye on your competitors. It’s possible that they will try to find your weaknesses too, so it’s critical to stay informed and ahead of the game.

5. Absence of SEO on Your Website

Absence of SEO

Today Search Engine Optimization (SEO) is a vital component of any website. SEO is the application of certain techniques and methods to rank your website among the top search engine results. Conventional ways to optimize your website include keyword-rich content, inbound and outbound links, the inclusion of meta-titles, and much more.

If you are about to start a new business and know nothing about SEO, then it’s better to hold the thought for a while and give some consideration to SEO. The more time you give to SEO before starting the better your chances to attain success. Without SEO and such heavy competition as we talked about earlier, it will be extremely difficult to rank in search engines.

For Example: If your vacuum cleaner business doesn’t optimize its website for “cordless vacuum cleaners”, the chances of ranking naturally are really slim.

For newcomers in the business, SEO can be really tricky and challenging to understand and apply to their online business. So, in the beginning, it’s better to consult an SEO expert for help. Speaking from my own experience a company that really helped me at the start-up of my business was Yazlo, they can help you with link building, guest blogging, or boost your ranking.

To think that you can rank highly in search results just because your website has good products or has an appealing outlook, but no SEO, then you are living in a world of dreams. You will have to take firm steps for link building, adding keywords to your pages, and optimizing your complete website. To sum it all up, without SEO you may lie in 90% of businesses that fail to grow.

6. Absence on Social Media Platforms

Social Media Platforms Absence

Marketing your product is as important as selling it. In order to draw new customers to your website, it is critical that your brand is marketed to your targeted audience. Your customers won’t grow after a certain point, unless or until you promote your business on relevant platforms.
Social Media platforms are a common front for marketing these days. Platforms like Facebook, Twitter, Instagram, Pinterest, and LinkedIn are among the most common options available.

With the creation of Facebook in 2004, the world entered into a new era. An era dominated by the use of social media platforms, for all kinds of communication. Although some may argue that Facebook was a part of 2010’s zeitgeist, the fact is that there are still 2.7 billion active users by 2020.

Similarly, Instagram took the world by storm in 2010, and with all the influencers it can affect your target audience to a greater extent if used smartly and the same goes for Twitter.

Pinterest provides you with a platform to share pictures with a wide range of audiences.

While LinkedIn offers a more professional front to connect with entrepreneurs, business owners, and companies. Social media marketing offers an opportunity to market your business to a diverse audience at a titanic scale, which will definitely help in making your business visible and improve your sales.

However, as much as it sounds appealing, it’s not wise to “put all your eggs in one basket”. These platforms should be one of the ways that you use to make people aware of your business, but not the only one. If you rely on Facebook or Instagram too much, but won’t focus on your website’s SEO, or use Twitter for marketing but don’t realize that it’s not the platform that your customers use to reach you, then social media marketing may not be that much fruitful for you. To suffice it all, Social media is just a piece of the puzzle, not the whole picture.

7. Lack of Unique or Helpful Content

Unique or Helpful Content

As Lee Odden said, “Content isn’t King, it’s the Kingdom.” and this is very much true for every online business. When a customer visits your website, it’s the content that they interact with first, rather than the product. As we know the first three seconds decide whether the customer will scroll down your website or not. If you have caught their attention at first glance then they are going to stick. And their attention can only and only be caught by unique and helpful content. The most effective way to set yourself apart from your rivals is by providing original content and answering every possible query to help potential buyers.

Taking into account the example of cordless vacuum cleaners again as we discussed earlier. If your competitor doesn’t have any page explaining “how to use”. Take this as an opportunity and use it to your advantage. Create an original page that will answer all the questions about the said query, add images and videos so that users can understand easily. It will not only improve user experience but also will keep you ahead of your competition.

Superior content not only helps to increase the number of people visiting your website but also plays a pivotal role in ranking your website. Another aspect related is content marketing. Before you promote your business, make sure that what you give to your audience is original and helpful. Don’t just write content for the sake of it but use it as a medium to outsmart your competitors. The thing that matters the most in creating content is how much that content will be helpful to your customers. Maybe you have created a masterpiece of content, but it fails to answer specific questions or is not useful for the audience at all. You should always go for value and benefit for your customers through your content rather than just making noise.

8. Not Evolving with Time

The world has turned into a global village, today this phrase is true in every sense of the word. The world has made advancements and has evolved to heights that were like a dream a few years back. With all these changes, one can easily stay behind if they don’t evolve with time. Using outdated methods and being stuck in the past, will do more harm to your business than any benefits. In the past year, the world faced one of the worst pandemic, which not only affected people emotionally but also financially. Businesses that had no online presence or were not updated, took a huge hit. Being conventional is not wrong in any way, but being conventional with the application of the latest advancements is better. For example: if you have a website but it is not optimized to the mobile version, it will highly affect your business. If you analyze the recent history of how online businesses are done, you will get to know that the game has changed to a much greater extent. Especially, during COVID-19 people turned to online business more than ever.

Some advancements in the recent past changed the way businesses are running today.

With the increase of e-shopping, more and more ways are developed to pay online, Chabot’s improved shopping experience, AI highly influenced both consumers and producers. Voice search is still evolving and is destined to be a major part of online searches in the future, and Augmented Reality (AR) was a big leap in online shopping and is definitely the future of online shopping.

To sum it all, evolving your business with time is inevitable. If you want steady and healthy growth you have to be fully aware of the advancements in the business and smartly make them a part of your business strategy only then you can compete with your rivals.

9) Refusing to Spend Money

Being a penny pincher is one thing but if you apply that concept to your business, then unfortunately it will cost you more money than it saves. The most basic rule of any business is simple: you have to spend money in order to make money. If you are not ready to do that, then you are not ready to run a business. Being resistant to spending money is natural but it will have such dire consequences that will be more difficult to correct later on. Don’t be afraid to take risks, but only calculated risks.

Don’t just spend money, calculate every risk involved, analyze the whole situation thoroughly, and then make an informed decision. If you need to hire more employees, then hire them, if you believe that there is a long-term investment that can benefit you greatly in the future but costs you a chunk of money in the short run, then goes for it. If you are not ready to dive into new territories and venture into new adventures, just because they cost you money, then your business is set on a course to failure.

As discussed earlier if you are not willing to spend on SEO, just because you think you can rank without it, therefore consider it a waste of money, then it is going to cost you more. Time is money, it is literally true in this case, investing at the right time in the right opportunity is critical. Don’t just spend your bucks, spend them at the right moment and in the best available opportunity, only then you will achieve the success you wanted.

10. Lack of Reporting and Maintenance

Reporting and Maintenance

Setting up a website and running it is just one side of the coin. To think that your job is done by just creating a website, well it’s not that simple. A huge number of businesses fail because they don’t maintain their website on a regular basis. Internet trends are changing every other second, and your website needs regular updates and maintenance according to the changing situation, to keep it at its best performing capacity.

Alongside maintenance, knowledge of all the numbers and analytical factors that affect your website’s performance is crucial. If you are not aware of no of visitors on your website, bounce rate, No of sessions, duration of sessions, and customers, then you can never analyze where your business stands and what areas need to work on. Being aware of your weak links and maintaining them timely will determine how well you can compete with your rivals. If you don’t know all these factors and don’t take timely steps to resolve them, then your competitors will not wait a single second to take advantage of that and you will be lost in the rankings before you know it.

When you came to this page you were probably wondering “why do online businesses fail to grow?” we hope that all the information we have provided you with, will help you answer all the questions you had in mind. With this information and all the advice, we hope that you are ready to take the next steps and start a business online and make it successful. We wish you the best of luck! Just remember that you can do it and you will.


Q1: What Factors Affect the e-commerce business?

A1: All the above-discussed factors play a vital role in determining the success of your online business.

Q2: Why should I start an online business?

A2: With the world growing into a global village, it’s the perfect time to dive into the e-commerce business and make a fortune out of it.

Q3: Is SEO important or not?

A3: SEO is one of the key factors for any online business. If you optimize your e-commerce business the chances are high that you will succeed.