Setting up a new business is an exciting undertaking. But more than 18% of new businesses fail within their first two years of operations. This data point from the U.S. Bureau of Labor Statistics can be quite concerning for aspiring entrepreneurs. To ensure that one’s business is well-settled on the path to success, there are a few mistakes one should avoid making when setting up an online business

1. Not making a business plan
Without a business plan, one is setting their new enterprise up for failure. Every new business must have a plan, even if it’s only one page long. This plan details the cost of operations, anticipated sales, and the product’s unique selling point (USP). Having a plan of action will help one build a successful business.  There are a few things one’s business plan should include. 

• Background information
• Confidentiality
• Products and services offered
• Industry status
• Market analysis
• Production and quality control strategies
• Financial projections
• Executive summary

2. Taking too long to launch
Once the business plan is ready, do not wait too long to launch. Timing is everything. If one has noticed a niche in the market that is not being catered to yet, it’s time to do research and get ready to launch. Taking too long may cause one to miss their window of opportunity with other players entering the market. This can reduce profits significantly.

In no way does this mean that one must rush to launch. Take ample amounts of time to study the market and build a strong business plan. But don’t spend too much time contemplating – strike while the metal’s still hot!

3. Being disorganized
When running an online business, it is important to be organized. Businesses often have several things happening simultaneously, from strategizing and marketing to completing orders and addressing customer queries. Setting a task list can help one stay organized and complete their tasks promptly.

4. Failing to define the market/target audience
Another common mistake new entrepreneurs make is failing to identify their target market. A great product or service alone is not enough to make sales. It requires marketing efforts to establish its presence in the market and make it a success. Therefore, it is crucial to do an in-depth market analysis before launching. This includes identifying the target demographic.

Many entrepreneurial advisors recommend creating a persona for the ideal customer: identify factors such as their age, gender, financial status, marital status, interests, hobbies, career paths, family systems, goals, motivations, behavioral traits, pain points, and more. Give this persona a name as well. This will help one create more specific marketing plans to attract customers without spending a fortune.

5. Working without a proper legal structure
One of the biggest mistakes one could make is failing to register their business. Not only could this put one at legal risk for financial fraud, but it could also leave one’s intellectual property vulnerable to competitors. Register the business, pick the right business entity, and protect one’s intellectual property from the start.

6. Underestimating capital requirements
When creating a business plan, leave some space to factor in unforeseen circumstances or expenses. This will help one maneuver the business smoothly in case of any contingencies. Failing to do so can cause one to downscale their business or even put them out of business. Before starting a new business, arranging for more capital than one deems adequate is ideal.

7. Trying to expand too quickly
Once one has established their business and started to turn over a profit, they may be excited at the prospect of expanding using their current formula. However, expanding the business too quickly can cost one money and resources in the long run. One may be left with too much inventory or staff but not enough sales. Take a slow and steady approach to expansion, and be sure to do research before dipping one;s toes in new waters.

8. Underdelivering on promises
Don’t make unrealistic promises to customers, as this can hurt one’s reputation in the long run. If one cannot take on a project or deliver a quality product at any given time, communicate this with buyers. This will help establish a relationship of trust with them and also make them believe one is in high demand.

9. Ignoring the competition
When launching a new online business, it is also important to keep an eye on what one’s competitors are up to. Make a note of their strengths and weaknesses when setting up one’s business, so one can make a better impact with the product or service. It will also help one price the products better, attract more customers, and increase sales.

10. Lacking customer service
Setting up a business isn’t only about making sales. To establish credibility in the market and create a returning customer base, it is also important to offer quality customer service. Failing to do so can cost one  business in the form of unhappy customers.

11. Dismissing negative feedback
As a business owner, customers are bound to leave reviews. Whether positive or negative, it is important to establish a feedback mechanism for these reviews. For happy reviews, thank the customer for taking the time to share their feedback. In case of disgruntled customers, reach out and ask them what went wrong and how one can improve their experience in the future. Work on these suggestions to keep transforming one’s business and enhancing customer satisfaction.

12. Failing to optimize website
For online sellers, having a website optimized for access across various devices is key for a positive customer experience. Even the best-stocked stores struggle to make sales on a website that has poor aesthetics or is slow to load. Before launching one’s business, prepare a high-quality website and take its performance metrics into account for a realistic business plan.