Learn the truth and be aware of the risks of Online Entrepreneurship

1. Online
Entrepreneurship
Understanding the Difficulties of Starting a Business

2. Internet Entrepreneurship
• The widely-held perception is now that
starting and sustaining
a profitable web-based
business has become
very easy.

3. Lure of the Online Business
• Starting a business online is
now very inexpensive.
• Domain = +- $8
• Hosting = A low monthly cost
• Plethora of free/inexpensive content
management services, like WordPress,
and customizing these products is simple.
• Cheap logos, cheap eCommerce options.
• Inexpensive and free coding environments and programming languages.
• Low-cost, high-yield marketing options

4. Online = Lower Costs
• Plethora of free/inexpensive
website building services.
• Customizing products like Wordpress,
Joomla, or any other CMS, is simple.
• Cheap logos, cheap eCommerce options.
• Inexpensive and free coding environments
and programming languages.
• Low-cost, high-yield marketing options
• Plethora of potential customers can be
reached via the internet.

5. Online = Lower Costs
• Perception of thinking you “save more” without having to
lease an office space or spend money on discount office
supplies.
• On the contrary…
.

6. The Reality is, The Vast
Majority of New Online
Business Will Fail

7. Failure is the Norm
• Starting, growing and sustaining any business is
exceptionally difficult.
• 20% of new businesses fail
within the first year.
• 51.2% of businesses
have failed after year five.
• 71% have failed by year
ten

8. Online Company Failure = Higher
• Experts estimate that the rate of failure for internet
companies is even higher than brick-and-mortar stores.
•
•
•
•
•
•
Abundance of competition
Same opportunities listed in earlier slide
available to all
Consolidation Trend
Segmentation and Targeting Issues
Unexpectedly Costs
Messaging Issues
• Estimates range from 70% to 97%
failure rate

9. Established Players
• Established competitors have a huge advantage.
• When people search, they click on the first result 42% of the time.
• Established companies have:
• More money
• Better rankings
• More experience
• Established partners
• Etc…

10. Failure Rate by Industry
• Some areas of business have a much higher rate of success
than others do.

11. Causes of Failure
1. Incompetence
• 46% of Business Failures can be
accounted for by some sort of
incompetence. Some common
examples include:
•
•
•
•
Lack of Planning
Lack of having an organized system
• ex: not saving important documentation. Use file cabinets you
should always have a hard copy of the most important documents.
Lack of Knowledge Regarding
Finances and Taxes
Poor Pricing Strategies

12. Causes of Failure
2. Lack of Experience
i.
41% of Failed Businesses,
do so because of a lack of
managerial and/or
sales/supplier/marketing
experience.
i.
ii.
iii.
iv.
v.
Credit and borrowing Issues
Rapid expansion
Inadequate inventory
Lack of supplier relationships
Ineffective marketing

13. Shoplet’s Perserverence
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•
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Despite the very high failure rate in new retail and
online startups, Shoplet.com has beaten the odds.
Founded in 1994, Shoplet is one of the original emarketplaces. We're proud to have grown tremendously
without any outside funding, and we have been
profitable since 1997.
You can learn more about the office product industry in
a e-book we have created.