The 8 Fs To Avoid Virtual Business Failure

The virtual business is as or more real than any other business and it also involves certain investment risks. Unfortunately, in Latin America, 60% of virtual stores close before reaching one year of life. Why does this happen and how to prevent it?

By knowing the answers, your chances of success are greatly increased. Therefore, it is important to know the main reasons that lead to decline, now called by many the 8 Fs of failure:

1 – Lack of planning

Planning an activity has never been well exercised by the Latin American businessman, perhaps this is the reason why failure in these businesses this close to 53% of micro and small companies in the first 3 years of life. It is impossible to wish for success without prior planning. The most important tool in planning is the “business plan”, the starting gun to be decisive is achieved by answering the following questions: What am I going to sell? How am I going to set up my store? Who is my competition? What do I need to start the business?

2 – Focus on the market

Don’t try to sell everything, leave that to department stores. Remember that the Internet is a totally different market from a physical store and its audience is infinitely larger. Try to specialize in a particular segment at first. On the Internet, a small part of the market represents millions of consumers, you just have to look for that “focus”.

3 – Lack of skilled labor

It is not enough to simply know how to navigate the Internet, it is important to know “e-commerce management” at a minimum: Internet marketing, optimization tools, traffic control. These three elements are basic and essential.

4 – Facilitates business promotion

To give a small example, imagine a store on a busy street full of products on the shelves and then without any signs warning passersby what the store is for sale. A store without promotion is difficult to attract buyers. This is where “marketing and promotion planning” comes into play, to optimize the site for search engines or support networks, sponsored natural, social and outreach on other sites, media, etc.

5 – Lack of Logistics Planning

A delicate issue that ends up producing 80% of the discomforts and legal demands between the store and the consumer. Knowing this fact, it is good to plan the very delicate and detailed logistics of the system.

6 – Fraud

Fraud, especially in credit card sales, can cause great damage to the store, to the point that it leads to its closure. Therefore, a good alternative in this minefield is the use of portals specialized in payment system fraud that provide great security in transactions. Paypal, for example, is one of the most reliable and secure payment systems.

7 – Lack of information about the site

Many stores end up failing because their management cannot see or know what is happening in terms of access analytics, results, and marketing campaigns. They usually make decisions – mostly wrong – based on assumptions. Therefore, web analytics is an important tool in the virtual world, it is essential that the web entrepreneur is familiar with “Google Analytics”.

8 – Lack of follow-up with the client

Much has been said about the final agreement with the client and it becomes more necessary if your store is virtual, but the real needs and attention of your clients is extremely important. The customer has to know exactly what is happening with his purchase order, your site must have a good communication channel with the customer and have sufficient credibility in the transactions.

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