The Perils of Running a Small Online Business Today
Running your own company may seem like the dream job, and there are many businesses that you can start at home and run online so it is totally feasible. However, there are also many pitfalls.
The last 18 months have seen the pandemic that grew from small reports on an unusual illness in China to a global disaster. Along the way, the virus affected all manner of companies in every form of industry. Companies have filed for bankruptcy protection, downscaled, and closed for good in the UK, and many other countries.
Some internet-based companies have managed to weather the storm in many cases. Most forms of online entertainment grew during lockdowns, and delivery services fared well too. This doesn’t mean that all eCommerce businesses are fail-proof though, and there are many perils that they face now and in the near future.
Keeping the cash flowing
One of the biggest problems facing any new online start-up is financing and cash flow. You may have all your financing ready and your stunning business plan attracted investors, but now you need to make cash.
Just like any business, eCommerce firms need to have a steady cash flow. If payments are late and you have multiple debtors then you will have difficulty in paying your own bills. Keeping on top of debtors requires effective communication.
If you have supplied services and the payment due date has passed then you will need to send an overdue invoice letter to your client. It may not be enjoyable to press people for money but you are running a business and not a charity.
Dealing with debtors
Keeping on top of all documents and communications is key to receiving payments on time. As mentioned above, you will need to send out invoices on time and then follow them up with overdue letters as necessary.
The best way to do this is to send them by email, and possibly combine them with a text message. Both of these methods are trackable and there can be no denying that they have arrived. Emails can also be used to link to your payment platform to make it easier for the client to pay.
You may find you have to offer alternative payment methods and possibly payment plans to keep your debtors paying you. These are areas that are rarely thought of when starting a new business.
Dealing with your creditors
Of course, the reverse is also true. You may run into cash flow problems and end up wanting to know how to deal with your angry creditors. If this happens then it could be due to poor cash flow and because you extended too much credit to your customers.
You should try to calmly and rationally communicate with your creditors if this situation should occur. Debt settlements are a possibility but good relationships should try to be maintained so that you can carry on in the future.
To avoid cash flow problems you may need to look at better debt management so that you are never the debtor.
Keeping up with ever-changing trends
Part of running an online business is being able to keep your website running at optimum levels. This means understanding SEO, and what changes are being made that might affect your SERPs.
Your positioning on search engine results pages is essential to people finding you and for you to be a success. While an individual can stroll down the high street and pop into a shop they find by accident, they are far less likely to accidentally stumble over your website.
Google is constantly changing and fine-tuning its metrics and failure to keep up with these areas will see your business tank when it comes to search rankings. Google search results are now heavily influenced by mobile-friendly content.
Search engines are now assessing websites for how mobile-friendly they are. If not optimized for those devices then they will be ranked lower. This is due to the ever-growing amount of internet users who only access the net through mobile devices.
Not only this, but 2021 saw Google introduce a new metric called Core Web Vitals. This area is tasked with measuring the UX or user experience of a website. Any eCommerce owner who fails to follow these measurements will see a drop in their search engine ranking.
One area that any eCommerce entrepreneur should understand is the importance of digital marketing. However, not everyone understands how to coordinate a successful marketing strategy.
It is a sad statistic that 90 percent of all new internet businesses will fail in the first four months and while many of these failures will be inevitable, some could have been avoided through better marketing.
By hiring a solid digital marketing agency you will have access to a team of experienced professionals who can recommend custom solutions to help you market your business. This will come at a cost and will be another area you need to budget for.
Social media mustn’t be ignored either. These platforms are necessary to maintain communication with your customers and allow a level of engagement that businesses never enjoyed in past times.
Ignoring the importance of social media could be fatal, but new business owners may not have considered how much time this could take up. One of the perils of social media is either spending too much time posting and communicating with consumers or spending too little.
You may need to consider hiring someone to take control of all your social media accounts so you can concentrate on the business side of things.
Software to help with processes
Running a business can mean that you are your own boss finally, and you get to do what you love every day. However, businesses also come with some boring, time-consuming, but necessary processes.
Accounting and invoicing software will have to be bought and used. Financial information and sales will all need to be recorded, and debts need to be monitored.
Installing debt management software that integrates with other systems can help to make these areas easier. A company such as Payt Software can provide solutions for debt management that help you to control your cash flow. It can be extremely time-consuming monitoring all your clients and their debts, not to mention all the communication that needs to be done.
Smart debt management software can do much of this for you and will help you avoid the perils of debtors and cash flow issues. This type of software will automatically communicate with debtors and remind them of payments due. It will also link the invoices to your payment systems to encourage quick payment.
Ecommerce businesses can thrive during these difficult times due to the fact they can be accessed from anywhere. Whereas land-based businesses had to close during lockdowns, the internet never shuts. There are also fewer overheads to an online business and this means starting up could be easier.
However, there are many perils to e-commerce and it is easy to miss some of them. Keeping a web-based company afloat means making sure the visitors are arriving and the cash is continuing to come in. This will mean keeping up with SEO trends and marketing well, but also managing debtors and controlling credit lines carefully.
- Blogger by Passion | Contributor to many Business Blogs in the United Kingdom | Fascinated to Write Blogs in Business & Startup Niches |