Why do online businesses fail?

Nobody wants their online business to flounder, so here are a few warning signs to look out for in your own lifestyle business.   If you see any of these things on the horizon, it is time to take a good, hard look at your current model. These three areas are often both causes and symptoms of struggling internet businesses.

Financial difficulties limit the potential of your business

Entrepreneurs are, by and large, optimists. They have to be. The competitive landscape is…well, competitive. I get the sense that too many of us who are successful in our online businesses might be guilty of ‘selling the dream’ too hard to people who just don’t have the financial resources to make a go of it.

Here’s what I mean: There’s a man/woman out there who really hates their job. They’ve reached a dead-end and they know it. So they hear a charismatic podcaster (ahem!) promoting the idea of starting an online business, and they see it as an easy solution to their current situation.

The problem is, they have little to no money saved up, and so there is no cushion there to support them while they do all the work of launching a site. Six months pass, and the person blames the concept of ‘lifestyle businesses’ rather than taking responsibility for their own lack of financial planning. Let me save you some time and heartache.

If you do not have at least six months of income saved, do not even think about quitting your job yet, because if your idea doesn’t take off, you risk ruining your credit, emptying your 401K, and eating ramen noodles just to stay afloat. Alternatively, if you have a nice cushion, live below your means, and work like you’ve never worked before, you might just be able to live a life better than you can imagine.

Emotional/Spiritual exhaustion contribute to a lack of perspective

You will find that putting everything into your online business means that you have less resources for other people in your life, and I’m not just talking about money here. I’ve struggled in the past to compartmentalize my life so that I spend quality time with my wife and son, while also responding to clients, acquiring new accounts and beefing-up my websites.

I have always worked hard when I care about the goal, but I’m embarrassed to say how easy it is for me to work too hard. Really, a successful business is great, but you know you are going too far when you start checking your messages during date night, your child’s school concert, or in the middle of a worship service. Whether you are a spiritual person or not doesn’t matter, because everyone has a need for solace, self-reflection and tranquility.

When those places become fewer and farther between simply because you are trying to drive yourself at the highest revolutions possible, you’ve lost something precious. Once you start pushing important people and events to the margins so that you can tweak your internet business one more time, something is going to give. If it is your family, friends and emotional health, your business is probably going to suffer as well.

I suppose the moral here is to not let your lifestyle business become a business lifestyle–if you cannot keep up, it is a sign that you need to hire some staff or scale back a bit.

Mental fatigue takes away the joy of entrepreneurship

When writing my PhD thesis, I worked 12hrs a day, 7 days  a week to get it done. It was brutal.

I was also teaching and my wife and I had our first child during this period. After two more years as a professor, I realized that I was already burning out a bit. I had a book contract with Oxford University Press, but I couldn’t find the time or the brain-power to push myself to write more.

I felt like I was running marathon after marathon, with no end in sight. I’m amazed that some people can live on a treadmill without being mentally drained. I take that back. Some people can do it–just like some people pull freight trains in Strongman competitions.

The rest of us mortals find that our minds need a rest. I feel this same danger exists in the online business world, where everyone is hungry, looking for an angle, a way to promote themselves or their site, a path to true riches.

I don’t know where the point of disequilibrium lies for you, but my hunch is that if you are feeling like an uninspired internet entrepreneur, it might be that your mind is trying to tell you to take a rest.

Ok, time to quit writing…I’ve done enough for one day.