Know The Risks Of Starting A New Business Online

Just because our ecommerce solution makes starting an online business very easy, you should not be tempted into just diving into an online venture with your eyes shut. An online business is just like any other business: it needs proper planning to succeed. Ecommerce has afforded many people the ability to achieve their dream of being their own boss. It has also made quite a few people very rich indeed. That said, there are many others who have given up after finding their ecommerce ventures less rewarding than they expected.

In this article we hope to shed some light on the risks of starting a new business online. Although some risks cannot be avoided totally, there are steps you can take to alleviate some of their effects.

Not Being Financially Prepared

A web store can see its first sale just weeks from its opening. But merchants usually start seeing significant profits only a few months into the business. Some take anywhere from six months to a full year to reach this stage. Many merchants risk losing their stores because they’re not financially prepared to see their businesses through the first year without substantial revenue. Small business start up financing is crucial and entrepreneurs need to consider the variety of costs involved and make sure that they adhere to a budget to ensure that these costs do not escalate.

Sometimes, especially for online home-based businesses, incidents that are not related to the Internet can affect the business. Fire, theft and power failures can all affect a home-based business. This is why insurance is so important in reducing the risks of starting a new business.

Inadequate Marketing

A good ecommerce solution alone will not ensure that your store will be a success. Many merchants fail to plan for the long term especially when it comes to the marketing aspects of their stores. As we have mentioned many times before, targeted traffic is key to the success of a web store. People need to buy your products in order for you to make money. It’s as simple as that. Of course, other aspects of your store also play a part: attractive and sticky landing pages, competitive prices and offers and great customer service, to name a few.

For a store to succeed, all aspects must work in tandem. Bad planning or even worse – no planning at all – should be avoided at all costs. Examine your business, determine its strengths and weaknesses, come up with a viable and comprehensive plan, and stick to it.


The risks of starting a new business online are similar to those of starting a conventional business. Arguably the main disadvantage of online business is also its main advantage: the low entry cost. Just look at InstanteStore’s pricing for instance: practically everyone can afford it. A low cost of entry leads to more people with more stores which in turn leads to more competition. The good news is that the market is still growing so the pie is big enough for everyone. Most people won’t end up being millionaires by running web stores, but a whole lot of store owners will end up living very comfortable lives with lots of time and money for family vacations and other personal ventures. We even have merchants who are already planning to retire in 10 years time, when they hit 35.

Could this be you? If you conceive and run your business well and have the right amount of savvy and luck, it just may be.

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