Establishing and running your online business is one of the proven ways to be financially independent in the information age. Not only will you have the ability to participate in any industry or niche you prefer, online businesses are also generally cheaper to found than conventional brick-and-mortar businesses.
However, this doesn’t mean handling your company’s finances will be easier as well. In fact, most online businesses continue to bleed money due to several reasons that are so simple; they are actually very easy to overlook. Without patching up these holes in your system, you are essentially hindering your own company’s growth and preventing yourself from truly achieving online success.
In the basic rules of business; there should always be more money coming in than going out. For online businesses, the following are the most common reasons why you could be bleeding money and preventing your own growth:
NOT Cutting Down on Costs
First and foremost, you should deal with the elephant in the room. It’s pointless to put money in a pocket full of holes. And if the costs of maintaining your business is more than what you make, then something is definitely wrong.
A commonly overlooked factor is the cost of training your staff. Keep in mind that investing in employee training is most effective if you’re looking for people who will stay in your company for the long-term. With this being said, you shouldn’t spend too much money on training if your company has a bad employee turnover rate.
Moreover, remember that long-term employees who get to love the brand will be more driven and motivated. They will also be more willing to collaborate with fellow workers.
Fix: A lot of online businesses hire freelancers on a contractual basis for individual projects. Do this as a short-term fix for positions that need to be filled immediately. In addition to cutting training expenses, outsourcing can save you money due to the generally lower rates of freelancers from sites like Upwork.
Just remember that outsourcing is not really the ideal long-term solution especially if you want a consistent team that will grow as your company does. So if you want to retain long-term employees, collect their feedback and make it a priority to improve their working environment. Remember that too much outsourcing may also lead to the next reason why your business could be bleeding money.
Lack of Structure and Collaboration
Mistakes in any business cost money. A company without an optimized workflow and a team without collaboration will lead to a lot of mistakes.
This is another problem if employee retention wasn’t really one of your strong points. A good example would be how the marketing and sales teams do not have a lead scoring system that’s developed collaboratively. So even if your marketing team brings in a ton of leads, your sales team may not always successfully convert them, which will ultimately waste your marketing dollars.
Fix: In addition to having a workplace that cultivates collaboration, you may also implement project management tools like Asana to keep your teams ahead of your processes.
NOT Analyzing Results
In the world of business (online and offline), you will rarely get it right the first time. After all, most of the things you CAN get right in marketing will require plenty of trials and, of course, errors. However, you can’t figure things out if you are blind to all the wrong things you’ve been doing.
Always remember that every movement in your business occurs for a reason. Does your website have a high bounce rate? Is your landing page failing to convert visitors? Take a look at your CTA, page layout, content, visual elements, and so on. After looking at the page itself, check if there’s something wrong with your audience targeting. Remember that the tiniest detail can have the largest effect when it comes to marketing and sales.
Fix: In the end, your company could be bleeding money by keeping up with a suboptimal marketing system. Thankfully, online businesses have all the access they need to analytics tools that can point them to the right direction. For most online businesses, Google Analytics is a solid choice for all-around performance tracking. If you want to focus on your pages, you may use an analytics tool with heatmap features like SumoMe.
NOT Tracking Leads and Potential Customers
A significant portion of successful marketing is dedicated to finding and understanding your target audience. But let’s face it; having a perfect conversion rate is next to impossible.
Don’t forget that when it comes to online marketing, every lead counts. You’ve already invested in acquiring them, whether it’s through ads, a signup, or another content marketing strategy. But then again, you should constantly track the behavior and preferences of your audience to further optimize your lead generation strategies.
Not tracking your audience also means you could be missing out on opportunities for remarketing, which is a crucial area of online marketing for making the most out of your lead generation efforts.
Fix: Were you targeting the wrong people, or were you presenting them the wrong content? These are the key questions that will help you optimize your entire marketing strategy. You can identify both with the help of inbound marketing services like Hubspot or CRM software like Insightly.
NOT Protecting yourself from Unexpected Financial Losses
One of the most observable trends in the world of online businesses is the lack of coverage for unexpected financial losses. As a matter of fact, most online businesses are not sure whether insurance is a good investment for them. True, you may not continually bleed money through a single unfortunate event like a fire or the death of a key person, but if you do, you’ll bleed a lot.
“On average in the US, funerals range between $7,000-10,000, and this isn’t even on the high end,” says Mark Burback at TermLifeInsurance.com.
Of course, there are also the less-significant things that could cut your income even for the short-term. Don’t forget that here are plenty of situations that could result in unexpected expenses, like refunds, stolen intellectual property, and so on.
“Don’t risk your personal assets and your business. You spent a lot of time and effort to acquire assets and set your business up, so make sure you protect them,” says Vanessa Emilio at StartupSmart.com.au.
Fix: The first thing you should consider is to get small business insurance to protect everything you’ve worked hard for. The bigger your company gets, the more important this step gets. Aside from this, you should also set up the legalities of your online business. Incorporating is a great idea, but at the very least, you should make important documentation like your terms and conditions or disclaimers available on your online storefront.
Images “ Looking for information on losing money on the Internet, online finance arranging concept / Shutterstock.com“
________________________________________________________________________________
Tweak Your Biz is a thought leader global publication and online business community. Today, it is part of the Small Biz Trends stable of websites and receives over 300,000 unique views per month. Would you like to write for us?
An outstanding title can increase tweets, Facebook Likes, and visitor traffic by 50% or more. Generate great titles for your articles and blog posts with the Tweak Your Biz Title Generator.
