Why Most Online Businesses Fail And Why You Should Start One Anyways

Starting and running a successful small business does not require intellect so much as it requires common sense and perseverance. Don’t get me wrong, starting a business is hard but the reason most people fail is not because they aren’t smart enough but because they don’t follow through or they get distracted and give up when they don’t see immediate results. We live in a world of instant gratification but starting a business online is almost never instantly gratifying from a monetary perspective.

Photo by Timetrax23

The truth is that the mentality of starting and running an online business is a lot like going on a diet. It’s tempting to go after the latest fad with the promise of quick results with very little effort. If you stop and think about it, there’s always some new fangled weight loss scheme floating around.

“Don’t eat carbs!”
“Drink 6 liters of cold water everyday and the weight will come off”
“This weight loss pill will curb your appetite!”


Similarly when it comes to starting a business, we see get rich quick schemes everywhere and the media bombards us with success stories about people making millions in a short period of time.

“Buy my latest ebook and you’ll learn how to make 5000 a month!”
“Make thousands a month while working from home!”
“This guy makes $4000 a day blogging and so can you!”


The reality is that people love to take shortcuts and like dieting, most people get caught up in some scheme or business idea expecting quick results and then give up after a few months of not seeing any. I see it everyday when it comes to blogging. I see it everyday when it comes to running an online store.

Running A Business Requires Willpower

If you are going to start a business, you can’t be half hearted about it. You have to commit for the long term. Going back to my dieting analogy, let’s take a closer look at the similarities.

  • It can take a long time to see results. Even if you eat less and exercise like a madman for a week, you still aren’t going to lose that much weight. Even if you work 24 hours a day on your business, your business may not grow any faster. You can’t just cram your way to the top.
  • Both are hard to start especially if your spouse or friends aren’t being supportive or going through the same thing. Having been on diets before, there’s nothing harder than eating your tasteless salad while your buddies are chomping down on pizza right next to you. When my wife and I first started our business, it was hard staying at home to work on the business while our friends were out having fun and going out. Therefore, it helps to hang out with other entrepreneurs and small business owners in order to keep yourself motivated.
  • You have to continue on even if you are not seeing immediate results. Losing weight and gaining traction with your business takes time. Our online wedding linens business was extremely slow for the first several months and it wasn’t until the 6 month mark when we started getting large orders that really propelled our business forward.
  • There’s usually more talking rather than doing going on. Ideas and endless debates are worthless. Getting your butt off the couch is the key to success.
  • Until you diet, you don’t realize how much you are eating. Until you start a business, you don’t realize how much time you are wasting in a typical day.

Starting A Successful Business. Yes, It Can Be Done!

Get rich quick schemes aside, starting a business is hard because…

  1. The media has convinced you that its hard
  2. There are so many things to learn, where do you start?
  3. You’re afraid to lose money
  4. You’re afraid your business is going to fail
  5. You don’t have enough money to start
  6. You’re not technical enough


The odds may seem stacked against you but guess what? Do you need to be Sergey Brin or Larry Page to sell shoes like Tony Hsieh?

Is there a lot to learn? Yes. But trust me. You don’t have to risk a lot of money and you don’t really have to worry too much about failure as long as you set the proper expectations.

No More Excuses Please

The key is to get over the excuses and do something about it. Everyday, I hear people whine about their jobs and make themselves out to be the victim. What these people don’t realize is that they have more control over their lives than they think. The first step is to stop shifting the blame somewhere else.

After all if you are overweight, is it really McDonalds’ fault? If funds are tight and business is slow, is it really the economy’s fault? It’s up to you to make the change. It’s up to you to make sure your business doesn’t stagnate. It’s up to you take charge of your finances.

Most businesses fail because their owners give up and lose patience. Most businesses fail because their owners expect quick results without doing the work. As long as you pick something you like, stick with it and constantly try to improve, you will eventually make it over the hump. But you can’t succeed unless you start.

Ready To Get Serious About Starting An Online Business?


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39 thoughts on “Why Most Online Businesses Fail And Why You Should Start One Anyways”

  1. Great article and very timely for me. My store has launched recently and although I am seeing orders come in it is very slow at present. No doubt with perseverance it will pick up but with every week that goes by and you do not see the results that you want immediately, it can be unnerving.

    1. @Naturigy
      Definitely stick with it, but try different things and experiment. Business will pick up especially when your site becomes better indexed in the search engines.

      @Alexa
      Yeah, I just saw that article recently. Having the “add to cart” or call to action on the left side seems unnatural to me but perhaps I should give it a shot.

  2. Steve, love it!! My mantra is “persistence trumps talent”, courtesy of author Dan Pink. Reading these kinds of posts are so meaningful and helpful. Thank you.

    BTW, did you notice Get Elastic’s suggestion about putting ecomm call to action on the left side? Curious concept to explore….

  3. Steve, thanks for the article.

    My girlfriend always tell me why don’t you be like my other friend and sell your stuff on ebay… he’s making $4000~$6000 a month on top of his full time job, and you only have one order and it’s from a friend… why do you still want to setup your own online store… You spent more money and there is no result…

    These kind of comment often time makes me discourage. So thanks for the encouragement =)

    1. @Jeff
      Your buddy is making money on Ebay but he’s throwing away up to 15% of his money on Ebay fees. In the long run, having your own site is the key to success. Good luck!

      @Tyler
      You managed to sum up my entire article in 2 lines….Makes me think I’m too verbose:)

  4. Calories out > calories in = successful diet
    Hard work + consistent effort + constant improvement = business success
    Or something like that.

  5. Shilpa R. says:

    Steve, you said it! It is soooo true. We all have control of our lives. It is what WE choose to do with our life, takes it where it is! It is no one but YOU make your life. Love it how you have put this out there. :)

  6. You’ve spoken the truth – plain and simple. Business success isn’t easy but it’s not impossible either. Hanging in there is a great strategy.

  7. This is a very good post, but I wonder if there is more to it that meets the eye. I am hitting my 18th month in business and things are actually a little worse not than when I first started. When DO you decide to throw in the towel?

    1. Hi Carla. I’m really sorry to hear that but let me ask you this. What have you done recently to improve your store? What steps have to taken lately to market your store? Are you actively making and testing changes?

  8. Over the past year and a half, I have done two major site remodels (the last one was in the fall), constantly moving items around on the site (pictures, text, etc), but no more than every four months. Learning more and more about SEO, social networking though Twitter and Facebook Fan Page, and email marketing (though I don’t have a big list). I have a blog, but I didn’t get much traffic from it and after almost two years, (longer than the age of the store) I decided not to put much time into it. I do sometimes write posts for other blogs to get the word out about my store….

    I also have my products on wishpot.com

    I may be leaving a few other things out, but that’s the jist of it.

    I am in the process of remodeling my home/landing page as we speak.

    1. Hey Carla,
      What did you hope to accomplish with your site remodels and what conclusions did you draw from each one? Just curious, would you be interested in a store critique or case study?

  9. Hi Steve,

    When I first opened the store, it was really bad (ugly). It was a DIY project that I should have never thought I could do, especially since I knew nothing about HTML and web design at the time. Learning as you go is NOT the way to do it! It was hideous. When I had it redone, I hired someone to do it, but it was template that wasn’t going to be exclusive to my store. Basically it possible looked liked another site, plus I wanted to lighten it up a bit (the decor was a bit dark). I wish I had made screen shots to show you!

    I would love to be a part of a case study! I am in the process of updating my home page a bit, but I am ready anytime!

    1. @Carla
      I’ve put you on my list. Since I know you and your store pretty well already, should be pretty straightforward though I’ll email you privately later for more details.

      @Annabel
      You are right. Keeping the business afloat is not the problem so much as getting by until your business makes money. That is why I always advise people to keep their full time jobs until that point is reached.

  10. It’s never about the money you will acquire it’s about the person you will come out of the other side as. It’ll make a human out of you!

    1. Hi Richard,
      I’ve noticed a bunch of your comments lately on the blog so I just wanted to thank you for contributing. Completely agree with your comment here. It’s amazing how much you grow when you run your own business!

  11. As a small business owner myself, I agree with a lot of what you said here, Steve.

    Running a small business has been tough at times but for myself (and my wife since we co-own the business), it all comes down to the freedom it provides.

    No matter how cushy people believe working for someone else is, there is always the possibility they could lose their jobs at any time. While this is also true with small business owners, at least we are in control of our destiny.

    Owning a small business isn’t for everyone but if you have the desire to start one- I say go for it but make sure you are fully prepared emotionally and financially first. This will make things so much easier for you in the long run.

    Great post, Steve. Cheers!

    Wesley Craig Green

    1. Hey Wesley
      Thanks for reaching out. Just went to check out your blog and it’s nice to meet another fellow entrepreneur. Cheers!

  12. Thanks Steve. I really needed a post like this. Despite just scanning it, I felt the impact immediately. I’ve been struggling to finish my digital product, slightly stalling on moving forward with my follower building and pushing forward in business. I’m being lame, and giving myself excuses.

    Registering my fictitious business name this weekend, and pushing on with my resource on backing up. Thanks!

  13. Alana says:

    Truly great article even though someone entirely miss the essence of what you had posted. Business is pretty much comparable to a chess game you’ve got to anticipate your opponent’s next move sometimes you will make the right choices and often times you won’t. Even if you win the game first time (or loose multiple times) thereafter you have to be willing to learn from game’s lessons and move forward, taking what you learn and developing a different strategy to win. I’m pretty sure Thomas Edison and Henry Ford had many failures but they didn’t give up. That’s the key!

  14. @Alana, I believe Thomas Edison was quoted: “I have not failed. I’ve found 10,000 ways that won’t work.” How’s that for a positive spin!

  15. Jessica says:

    Hey there! I just signed up for your newsletter and am loving it so far.:)

    My husband and I have been back and forth between starting a brick store, or an online. Drop shipping or wholesale shipping?So many choices!!

    I have been researching online for over a year now and have finally decided to start (well it didnt take me that long to decide, but I had our daughter who had health issues and passed away at 3 1/2 months of age).

    I do have a few questions for you… first off, why do you not suggest a free host such as angelfire and etc…. also I noticed you said you lost money,basically,using Paypal. Why is that? They are secure and do money back guarantee with customers. I know I purchase alot online and that is only way I rather check out is Paypal.

    Also, I can not really fly overseas to go to conventions and etc.,but who is a trustworthy online over seas company to use wholesale who does orders smaller than say $1000.00? I found liquidations.com here in the states…do you know anything about them?Are they trustworthy?

    Just wondered your input on these things.Sorry to bombard you with a million questions..but you do great work and I would love to see your site!!!!!!Thanks

  16. Hi Steve!

    I’m in love with this article. :)

    It’s all about staying the course and doing what you do best. You WILL get noticed in time, but it just takes a little bit.

    Those over night successes…where are they now?

    Instead of desiring for the quick path, desire for the slow and steady path which will inevitably bring in far more revenue, relationships and business.

    Kudos for this!

  17. elsie says:

    Steve – great content. I am really enjoying your blogs. Just wondering if you ever had answers for Jessica’s questions.

  18. @Jessica
    Free webhosts always impose heavy restrictions on your website and you absolutely can’t depend on a free webhost for a mission critical business. Trust me on this. If you can’t afford 5-7 dollars a month for a shared host, don’t even bother starting your business.

    As for Paypal, we lost a lot of money using Paypal Standard which takes customers off of your site and heavily influences them to pay with a Paypal account. The majority of customers will pay by credit card and unless you accept them directly, you will lost out on a lot of business.

    Working with overseas vendors is tricky and it’s almost required to go visit them directly. It’s a different culture and business is based more heavily on relationships. Sure, you’ll probably be able to find vendors online, but you might have a harder time getting quality product or goods made to your specifications.

  19. Everyone thought that online business is a place to earn fast money
    It actually wrong. I just same with the physical business. What different is it more easy and less cost to start a business. Seem there are lot of case study of fail in business online. Why not go for the you be the second follower and learn from their mistake and solve and prevent those issues and build your business up.

  20. Starting an online business will take effort and perseverance that all available in all of us but few have the will and discipline to apply them. We are bombarded with get-rich-quick fixes that seem to be too easy to achieve, until…we give them out hard-earned money are return two steps back. Worse that we were before.

  21. Hi Steve,

    I’ve been following your blog for quite some time now, and have found your articles to be extremely helpful and encouraging–they’re leading me in what I believe is the right direction for my business. Thanks for being able to say what I’ve always needed to hear at the right time! :)

    1. Hi Ryn,

      You are most welcome and thank you for supporting my blog!

  22. Hi Steve,
    thanks for your article, it gave me the ah-a effect. The more I read on this topic around the net the more I question myself on my business, because apparently there’s nothing wrong in my business choices. I’ve started the business 4 month ago but it’s been quite slow on numbers of viewing and of course purchases. We all know that is a matter of time but how can you not worry ;)

    Cheers!

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