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I’m sorry to break it to you, but no business is 100% safe. Even online. But with that said, an online business is still something I wish every father like us could have. It’s a great way to support our family while being physically present in their lives. I don’t know about you, but it is a kind of risk I am willing to take for my family.
Online businesses are considered safer compared to traditional businesses for their low start-up and operating costs. With the right set of tools, the Internet can even help you start a business with no money. Nonetheless, online businesses also come with their own risks and negative effects that you have to manage.
It has been over five years since my wife and I took the leap. Our businesses are now fully online and can be operated anywhere we want. It is something we thank God for each day. The roads, of course, were not without danger. If you want to learn about the risks and the negative effects of an online business, read on. In this article, I will share insights about the threats you have to watch out for and how to practically manage them.
What are the risks of online businesses?
- Following the wrong people. There is no formal education dedicated to online entrepreneurship. Building an online business is risky because we have to do it on our own. One of the quickest (and smartest) ways to set up a business over the Internet is to follow people who have already done it. They are usually called “gurus” or “influencers” who will offer you their courses, books, and tools that will help you build a successful online business. The risk, of course, is following someone who is a fraud.
If you are interested in following someone legit, I can vouch for the people at Income School. They teach how to build a business by blogging and creating YouTube videos.
- Your business is affected by other businesses. Amongst the greatest risks online businesses have is their dependency on other businesses. We do not technically own the success of our company one hundred percent. They will always rely on the tools and services we subscribed to.
It’s unlikely to happen, but our businesses will definitely suffer if Google, Amazon, or Facebook shut down. The same applies with the companies where we host our domains, e-commerce, blogs, payment gateways, and other essential aspects of our website. If you want some suggestions on the reliable services I have subscribed to thus far, you can check out my recommended tools.
- Investing in the wrong niche. A niche is a term used to denote a special segment of the population, product, or service. It’s like being a specialty shop, rather than a general store. It’s selling sneakers to sneakerheads, instead of just any shoes to anyone.
Choosing the right niche is crucial in the online business world. It is literally life and death for your business. Broad niches tend to be overly competitive while narrow niches can be too restricting. The challenge is to strike the right balance. But perhaps the most crucial thing about niches is that they should be something you are passionate about. It’s difficult to work with niches where you do not feel connected.
- Getting your business copied (or stolen). One of the huge benefits of an online business is it is fast and easy to start. For the experienced, they can do it in one to three days. For beginners, maybe a week. Two weeks tops. Unfortunately, this pro can also be a con. Because online businesses are fast and easy to start, they are also fast and easy to be copied by others. It’s even worse for bloggers and other content creators. There were reports about their works being actually stolen. Putting a business online will expose your intellectual properties at risk.
- Getting your business hacked. There are professional hackers out there. And they have a bunch of ways to make money from our websites:
— Steal your and your customer’s credit card information.
— Steal your and your customer’s data then sell it to advertisers.
— Will ask for ransom for the accounts they have gained control of.
— Will use our accounts to solicit money.
- Bad or false reviews can be detrimental to your business. Positive customer reviews build trust and encourage other shoppers to buy from our store. It is among the most powerful marketing tools we have as online sellers. On the other hand, a negative or a false review can push people away and may be destructive to our business. The problem with reviews is we do not have control over them. People will say what they want to say, and readers won’t have the time to verify whether the review is true or not.
- Unstable income. Just like any other business, an online business’ income is not guaranteed. You may earn big this month, and nothing the next. The Internet is constantly changing, and those changes may affect the way your business makes money. A change in Google or Facebook’s algorithm may diminish your traffic. A revision on your partners’ fees or percentage can affect your profit.
What are the negative effects of online business?
Besides the financial risks of an online business, it is also worth mentioning its negative effects on our well-being.
- Loneliness. Running an online business will require you to spend most of your time behind a computer. There will be less face-to-face interaction since the usual way to get in touch with other human beings is via email, chats, or video calls. If you consider yourself an extrovert, you might find it challenging to operate an online business. Loneliness is something you must deal with as an internet entrepreneur.
- Unrealistic expectations. It is easy to get frustrated by the slow progress when working on the Internet. The problem lies in our unrealistic expectations about what online businesses can do. We overhyped it with the notion that it would make us wealthy in a year or less.
While there are real stories of overnight success, the average duration for an online business to become profitable is at least 24 months. Online businesses are real business that requires time and dedication to be successful.
- Being viewed as a scam or second-rate. Not sure if this is only exclusive to where I live in. But there seems to be a prejudice against being an internet entrepreneur. Many see online businesses as a scam or second-rate kinds of businesses. That those who engage in them are either lazy or not qualified enough to create real businesses or get decent jobs.
- Being distracted or overwhelmed with shiny objects. The internet is a massive space. There are virtually limitless things you can find to help improve your online business. As an internet entrepreneur, you will be constantly bombarded with shiny objects that can pull your attention away from what really matters.
I was guilty of this. I bought a lot of tools at AppSumo like A.I. writers, SEO-related software, social media schedulers, and more — thinking they are “investments” since they will make my business profitable. Later I found out I do not need 90% of what I have bought.
- Screen fatigue. Online entrepreneurs are susceptible to screen or eye fatigue. It is often the result of extended exposure to blue light, the glare from our electronic devices, and intense concentration. You know you are experiencing screen fatigue when you have the following:
— Achy, tired, itchy, burning, dry, or watery eyes
— Blurred vision
— Difficulty concentrating
— Trouble to keep your eyes open
— Heightened light sensitivity
— Headaches, especially a dull ache around your eyes
- Boundary issues. Being able to work anytime anywhere is a great privilege. But as they have said, “great power comes with great responsibility.” Having this kind of power requires self-discipline, or else it will lead you to burnout.
I personally struggled with this as I tend to work until late at night, and in places where I should just be enjoying my time with family. Even if you can work anytime anywhere, it is best if you can still put up a boundary between work and family life. This is the only way to really enjoy the perk of having an online business.
How do online businesses manage risks?
- Be involved. I see many internet entrepreneurs who simply hire freelancers to take care of their online businesses. This is smart at some point, but relying too much on people will put your business at a huge risk. No one really cares about your business more than you do.
- Learn continuously. The business environment over the internet is always changing. What we learned today may already become obsolete next year. Being complacent with our knowledge will put our online business in a disadvantageous position.
- Back up your files regularly. Anything can happen on the Internet. From cyber-attacks to breaking our own website. Whatever the case, it is good practice to back up our files regularly.
- Do it slowly. Direction is more important than speed. This is especially true with starting an online business. You may put up an e-commerce site or blog in three days, but in six months you need to start over again because you found out that you are in a highly competitive niche. Doing things slowly will allow you to prune out the possible threats to your business.
- Work only with reputable companies. There’s a myriad of ways to build your online business on cheaper alternatives. But if you are not sure what you are doing, my recommendation is to always go for reputable ones. It is better to pay more for products and services that will help your business grow and succeed long-term. I have listed the tools I personally use below.
- Diversify. Diversification is an effective strategy to moderate risks. Be sure to have at least a couple of projects that can support one another. Aside from this blog, I also sell laptops on an e-commerce site, and host properties via Airbnb. Furthermore, my wife also manages her own online jewelry business.
- Have a secret sauce. Having a “secret sauce” will help you avert copycats and plagiarists. It is an ingredient unique only to you. I am not sure what this means for you, but an example of a secret sauce is stories. My articles are usually seasoned with personal stories which makes it hard for others to copy or steal my content.
Online businesses are not as safe as we think, but they are generally easy to manage when coupled with the right mindset and approach. It can expose you to certain financial and health risks, yet they are not as grave compared to traditional businesses. Having the discipline to learn continuously, being involved, and setting up a healthy boundary between work and family life will enable us to truly enjoy online entrepreneurship.
- Income school — They taught me how to create an online business through blogging.
- SpreadSimple — The platform I used to build my online store.
- Bluehost — The web host I used to start my blogging business.
- Icedrive — The cloud storage I use to back up my files.
- Fiverr — Where I hire freelancers to help me with my businesses.
- Is Online Business Good Or Bad? (My unbiased take)
- Why Are Online Stores Successful? (5 of many reasons)
- Are Online Businesses Real? (And how do they make money?)
- Things You Need To Start An Online Business (Cost breakdown)
- Is It Hard To Start An Online Business?