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10 Pitfalls to Avoid in Your Online Business


Taking the web by storm is no easy feat — you must remain diligent and focused.
Taking the web by storm is no easy feat — you must remain diligent and focused.
AmmentorpDK/Thinkstock

In many ways, starting an online business is just the same as starting a traditional one. You need to do your market research, write a business plan, find investors, keep your customers happy ... the list goes on.

But in other ways, an online business is a different animal than a brick-and-mortar company.

First off, your website is your bread and butter and must be the ultimate priority. If it's not up to snuff, your business might as well not exist to a large number of people. Your marketing efforts also have to reflect the fact that your target audience will be exponentially bigger than if you were operating locally. Not taking the plunge into social media (after carefully testing the waters, of course) is a serious blunder that you can't afford these days. An online business will also have different legal considerations than a traditional one, so not lawyering up could be a costly mistake. And that's just a starter list. Here's how to avoid the most common pitfalls that can spell the demise of your online business.

10: Not Having a Solid Website

If you're running an online business, you obviously have a website. That's the face you show to the world, so at the very least it has to be functional. There's no excuse for not having an airtight site: Faulty links, design straight out of 1997 and dysfunctional shopping carts are just not acceptable. Your domain name is also very important — it must be concise and easily understandable. If it's unmemorable or nonsensical, you're just making it difficult on potential customers. Your business won't be credible, and people will take one look (if they find you at all) and head elsewhere. If you doubt your web-development or graphic design skills, hire it out. Customers can sniff out a homemade, ramshackle website from miles away.

Besides the look and functionality of your site, security is a huge consideration. You need to protect yourself as well as your customers. This could end up being a tedious and time-consuming job, but you can't ignore it. When the alternative is being a victim of identity theft or having your customers' personal information stolen. Again, outsourcing could be a good idea, here. You might not have the skills to make sure that everything is locked down.

9: Not Covering Your Legal Bases

When you're starting an online business, it might not seem as "real" as if you were setting up shop in a physical store or office. You very well might be working from home all by your lonesome, at least at first. If you're not sitting in front of a computer, it's almost as if your business doesn't even exist. It's just out there in the ether.

So, it might not seem like you'd need to do much in terms of a legal setup, as you'd have to with a business that has a physical location and multiple employees. While you're simultaneously playing the roles of head honcho, graphic designer, web developer and receptionist, you might not realize that you should also add lawyer to the list. And this is probably one task you'll want to outsource. Online businesses need legal protection just like traditional ones do, but they also come with a host of legal considerations that you might not even know about. So do yourself a favor and hire a lawyer who specializes in Internet law.

A lawyer can review contracts, advise you on intellectual property and taxation issues, guide you through the incorporation and registration processes, make sure your and your customers' information is protected properly and confirm that your site is set up correctly and legally. It'll probably be one of the most worthwhile investments you make in your business.

(Oh, and while you're at it, go ahead and hire an accountant, too.)

8: Not Paying Attention to Your Customers

Besides a completely dysfunctional website, there aren't many things that'll send you down the tubes faster than bad customer service. This is especially true for online businesses, whose customers have instant access to the competition. When it's so easy to shop around, why wouldn't people just click on over to another business if they have a bad experience with yours? And never forget the equally easy opportunity to fire off a nasty review on your site or on social media.

With an online business, customer service is a 24-7 job. You might not have the chance to have a face-to-face conversation with an unsatisfied customer, but you can e-mail them at all hours and fix things fast. You can issue refunds, accept returns and answer questions instantly (when you're not putting out fires elsewhere, of course). People are accustomed to speedy service now, and it's not an option to put off placating a disgruntled patron. Waiting too long to make things right could be the kiss of death.