5 reason Why Online Businesses Fail in South Africa

a man sitting at a table repairing a laptop

It is estimated that over 90% of new websites fail

within the first year of existence. Interestingly enough, the same can be said for the restaurant industry, as only 1 out of each 10 new restaurants experience real rewards.

With such negative odds it seems that many are taking a foolish gamble

for a shot at success. Yet, there are certain individuals who are able to launch successful restaurants and online businesses time and time again with amazing success rates.

Why is this?

Almost all of these entrepreneurs failed many times before they succeeded, but, the key to their success is a winning formula derived from trial and error.

The Internet is no different.

Through the Dot-Bomb era, millions of websites failed and through this collective information, it was possible to develop a successful formula.

A formula used by R.O.I Media to ensure the success of their websites and their clients’ websites.

Highlighted below are some of the modern principles for online success. It is guaranteed that if businesses actually adhered to these principles, 90% of them would be smiling rather than crying.

1. The 5 P’s (Prior Planning Prevents Poor Performance)

The key to launching a successful online business is down to proper planning. Before launching any online business you need identify your potential target market and demand.

Online Businesses have distinct advantage

over traditional brick and mortar businesses due to the fact that we can identify demand for any industry based on the daily demand indicated in search volume.

For instance,

the keyword “cape town accommodation” is searched for ± 350 times a day. Therefore it’s feasible to launch a site that offers bookings for accommodation in Cape Town. The demand is visible in the searches done by users.

2. Competitor Analysis

It’s surprising how many new online businesses launch and when asked the question, ‘name your top 5 competitors?’ few can give you a direct answer.

By identifying your competitors,

you gain valuable competitor intelligence which can help mould your business model. It’s important to see:

How much competition is in your industry?

More competition makes it harder to compete. Sometimes the better angle is to target segments with less competitor saturation.

Price Comparison

Customers in this day and age are becoming more and more price sensitive. With the internet, customers are able to shop around for the lowest

price within minutes and most of the time they are drawn by a low price. It’s sometimes better to make less profit as opposed to no profit.

Don’t be caught off guard.

Identify all your competitors’ prices and position yourself to be competitive and make sure you are able to make enough profit to sustain your business expenses, including marketing.

USP – Unique Selling Proposition

This is a vital question that few business owners can answer. What is your unique selling proposition? Simply put, what do you offer that your competitors don’t offer or what do you do better than your competitors.

By launching a product range that is not unique

in any way, will not give you a distinct advantage in the marketplace and will set you up for failure.

3. Build it and they will come (Traffic)

Many new websites spend far too much time and money on launching a website. Once the site is launched, they do far too little to promote the website and as a result few people come to the website.

Being out there is not enough;

you need to actively promote your website online in order to get traffic to the website. Traffic can be generated through SEO (Search Engine Optimisation) and PPC (Pay per Click services).

Interestingly,

88% of all internet users use search engines to find what they are looking for. In February 2008, there were nearly 10 billion core searches done in the US alone.

Search Engine Optimisation

is the process of bringing a website to as high a position as possible in the search results when a user types in a search term in the search engine.

Read Part 2

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