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5 Reasons For Online Business Failures

Every day more people make the decision to start an online business. It may be the benefits of working from home, extra money needed, loss of traditional employment or simply curiosity – the idea of owning an online business can be alluring. The statistics show, however, that more home businesses fail than succeed. But do not despair just yet – knowledge of the common pitfalls can help you map the road to success. Here are 5 common mistakes made by both new and experienced Internet entrepreneurs.

Reason #1: The online business was not a good choice.

Few Internet entrepreneurs start their first online business with a firm idea of what they are going to make money from. The majority of home business owners will search for an opportunity because of a real or perceived need; since there are many thousands of Internet opportunities to choose from often what happens is the first one to attract a person’s attention is the one they begin their online business journey with. Whether it is an enticing sales page promising the level of income that would address or exceed needs or the type of business matches a personal interest the process of choosing the online business may determine success or failure from the outset.

Some opportunities turn out to be deliberate scams or simply “too good to be true”. Other online businesses just turn out to be the wrong fit because some details were unclear until after starting or the entrepreneur misjudged their own knowledge of the business product or service.

Reason #2: There was no business plan in place.

It can be relatively easy to simply jump into a business opportunity with no business plan in place. It does not take more than a few minutes to sign up and pay for an online business opportunity without planning or research. Of course it stands to reason that if you are responding to an advertisement promoting quick riches with little or no effort it stands to reason that a business plan would not be in sight because it shouldn’t be needed. A business plan maps out the strategy for financing the online business as well as marketing and other important details typically put in place to turn vision into reality. If there is no business plan then either there is no direction or it rests in the hands of others.

Reason #3: The business plan was not followed.

With a business plan in place there should be guidelines and limits. Exceed your monthly advertising budget and fail to follow through on planned marketing should prompt the realization that either the online business is off track or the business plan requires revision. But unless the Internet entrepreneur is disciplined to follow the business plan they created it can quickly become a useless piece of virtual paper that has no real bearing on direction or success.

Reason #4: There was no mentoring or support system in place.

Everyone needs some form of support for their online business. A significant contributor to online business success or failure is the support received through means such as coaching, a friend who listens and provides feedback, or a business forum. There are enough ways to offer support that the absence of any should be a warning sign to avoid a particular online opportunity. If an Internet business owner decides not to avail themselves of available support options then they have mostly themselves to blame if things do not proceed as desired.

Reason #5: The intangible costs were higher than anticipated.

Assuming even just a little conscientious spending, when tangible (i.e. monetary) costs are higher than bugeted there should be no surprises. That is what a business plan and budget is designed for after all – to make the decision to overspend a deliberate one. But in addition to the financial costs of owning and operating an online business there are less tangible ones that can just as easily spell defeat. An example of an intangible cost is the impact on family life caused by working from home instead of outside of it. The reality is that for some people or situations working at home creates interpersonal stress that was likely not fully anticipated and was not part of the picture when they were leaving the house for work.

In conclusion, there are many reasons why an online business can fail but knowing about them means they can be avoided. Aiming for success a new or experienced Internet entrepreneur can research business opportunities before joining, develop a workable business plan and follow it, take advantage of the support available and monitor the impact of working from home.

Comparing and Contrasting the Small Business Loan and the Business Cash Advance

Though the business cash advance differs greatly from the bank loan, one of the most traditional methods of business funding, the two business funding methods also have a lot in common. Small business owners should understand both the similarities and differences before they decide which method is best for their businesses.  


Various Programs  

Both banks and merchant cash advance providers offer various programs for small business owners. Banks have microloan programs, SBA loans, startup loans, etc. Some providers offer starter programs, standard programs, premium programs and even restaurant funding programs. The programs offered by both entities are designed to meet the needs of a group of people whose businesses are as diverse as the owners themselves are.  

Not Free Money  

There are business funding methods that do not need to be repaid. These include grants, personal savings and gifts from friends and families. However, both business loans and business cash advances must be repaid.  

Working Capital  

Both funding methods can provide working capital for small business owners who need it. These business funds increase cash flow, helping small business owners to make the necessary purchases/payments to improve or maintain their businesses.  

Funding Amount  

Both banks and advance providers have the capacity to fund large amounts of money. Of course, one’s actual funding amount is dependent upon circumstances laid out by the bank or the advance provider. Typically, small business owners can receive business cash advances of up to $500,000.  



Small business owners typically repay business loans by making fixed monthly payments. Every month, on the same date, a specific amount is due. Late or missed payments can result in penalties. Merchants who use advances never make payments on their own. Providers automatically deduct a small percentage from their business’s daily credit card sales until the advance is repaid. Business cash advances are usually repaid in six to eight months.  


Bank loan requirements may vary from bank to bank but overall, eligible business owners will have excellent credit scores, impeccable personal financial histories, collateral and business plans that the banks believe in. Merchant cash advance eligibility is determined by the length of business ownership (merchant must have owned business for at least six months), amount of monthly credit card sales processed (business must process at least $3,500 in monthly credit card sales) and length remaining on business lease (at least one year must remain). Merchants must also have no unresolved bankruptcies. Less-than-perfect credit is fine when applying for a business cash advance. The advance is also unsecured. Therefore, there is no collateral required.  

Application and Funding Processes  

Often, an extensive amount of paperwork goes into applying for a business cash advance. The application process can take months and even after approval, it can take months before a borrower receives his/her funds.   

Business cash advance applications can be approved in 48 hours. In addition, applicant accounts can be funded in as little as five business days. Merchants who take advantage of advances are also allowed to renew their advances every three to four months, a process that can be done is as little as 24 hours.  


As mentioned above, most banks will require applicants to prepare and present business plans, because they have restrictions on how their loans can be used. Contrarily, there are no restrictions on how advances can be used.

Get a free online quote today for your business cash advance!

Internet Business – The ABC’s of Starting an Online Business!

Starting your own Internet business can be as difficult as you make it! Most successful online business owners failed many times before they found something that worked.

Personally I worked hard for a good two years before I really figured it all out but once I did it has really been all down hill from there. I will try to help you avoid some of the pitfalls you may face while starting your own Internet business.

Once you decide to take the plunge and really dedicate yourself to building a real Internet business and when I say real I mean a business, not a scheme that will make you a few bucks here and there, but a real business that has value and you can sell one day.

Your first task is to decide what you are hoping to achieve with your online business. Most people fail because they have no clue what they are looking for and if you were to ask them you might get an answer as general as “I want to make a lot of money.”

That is such a generic answer and it certainly does not define any real goals and when you fail to set real goals you haven’t a chance at success.

So, your first step is to put your goals down on paper as this will help shape your entire business plan and this will get you started off on the right foot.

There are hundreds if not thousands of ways to earn money working online and if you allow it, this can become extremely distracting.

Before you decide on one particular Internet business model you should take the time to investigate some of the more popular methods, as they say “Don’t try to reinvent the wheel.”

If you find a particular business model that interests you take the time to search for a few other people that are already successful at that business and study what they are doing.

You should sign-up for their newsletter if they have one and subscribe to and read their blog and you should follow them on Twitter, you should do everything you can think of to find as much information as possible, this is basic market research.

The best way to learn how to run a particular online business is to read all you can about the business and just study the most successful people already running that type of business.

Once you have learned all you can then your next step is to take action. Take Action!

You would be surprised at how many people fail at this step, they go through the learning process and they spend their time preparing but then when it comes down to taking that last step it is though they lose all confidence in either themselves or in the business altogether.

If you are serious and committed to starting an Internet business be prepared to face moments of doubt and insecurity because I can guarantee you that they will rear their ugly heads.

I faced two years of off and on doubts about this whole online Internet business possibility. However, I failed miserably at the most important aspects of starting any type of business and that is my motivation for this particular article.

If you are considering an attempt at starting your own online business but your full of doubt and disbelief you must get past that before you even begin.

If you want to insure your failure all you have to do is to not believe in what you are going after or in yourself. Nothing in life is guaranteed and sometimes you just have to take it on faith that you have what it takes to succeed.

To sum up my message to you, I would tell you to do as much market research as possible into the market you wish to pursue, clear your mind of any doubt or disbelief you may have and trust in your ability to succeed.

Once you have chosen the type of Internet business you are going to build; Get To Work! You should have a business plan and you should have your days preplanned or in other words, schedule your daily tasks the evening before.

A well planned day will keep you from falling prey to the countless number of distractions online. If you work steady everyday at building your Internet business you will enjoy the benefits of owning your own successful online business.