While the Internet offers many opportunities for the home-based entrepreneurs, it has its downside. Here are the top six disadvantages of operating a web business:
1. Requires tech savvy and know-how
You need to be at least computer literate to operate a web business. It is important that you know how to write and edit text in an HTML environment, create tables, add graphics, and upload files to your server. As you go along, you need to learn how to automate tasks by installing plugins and scripts (there are many available for free).
While you may still be able to run a business on the Web without any tech know-how, you should be prepared to allocate resources to pay for your coterie of web designers and programmers to assist you in the technical side of your business. You can pay a web designer to create your site, make any updates you need and troubleshoot coding problems. However, be prepared for the cost of maintaining the website. For a task that could be done in 2 minutes such as repairing a broken link, you could be charged for a full hour by your web developer.
Even if you use website platforms such as WordPress with their famous 5-minute installation, it is very hard to operate an online business if you don’t have the skills and know-how to perform even the most basic of tasks such as updating your content.
2. Business can easily be copied
The saying “success breeds copycats” is more evident on the Web than in other commercial mediums. With your business presented on your site, complete with detailed descriptions of your services or pictures of your products, people can easily study what you have to offer and decide to open a similar business to compete with yours. More so if they perceive your business to be a success. The Internet has allowed your business to be copied so easily!
We have seen small home business merchants struggle with other businesses who rip-off their business concepts, their sites, even their domains. Some are even their former customers, who realized that theirs is a good business and begin to offer the same exact products. Others take it a step further and open a similar site by changing a single letter in their domain name (e.g. add an “s”).
Worse, there will be instances where your whole website is copied, down to the images and even your grammatical errors! Instead of doing the work of creating their own business, some scumbags simply download your website and put it up in their own domain. This is especially true for information-based sites, where you will be constantly battling for content scrapers and copyright thieves.
Unless you have the resources to patent your business concept and products, or to pursue long, overdrawn court battles on copyright infringement, home businesses are particularly susceptible to this kind of risk on the Web.
3. Greatly depends on your selection of your web hosting company
Unless you are hosting the site yourself, the continued functioning of your site (and hence your business) depends solely on a third party — your web host. Hence, your choice of the web host is extremely crucial at the very start of your Internet business.
If the servers of your web hosts are sub-par, you may find that a lot of people abandon your shopping cart. Your website could be very slow to load because your web host put your site in 1 server together with 2,000 other sites.
Of course, the biggest nightmare is when your website goes down. Whether your web site is down for 10 minutes or 10 days, you lose business when your site is not up and running. If your web host’s servers malfunction, you can suddenly find your order forms malfunctioning, preventing you from receiving any orders. Or you may not be able to receive emails through your domain name, or even update your site.
The bad part is, you are pretty much helpless, especially if the once helpful customer support of your web host decides to make it hard for you to reach them while they solve their technical glitches. You can, of course, take the proactive stance of leaving your current web host and moving to another host (which by itself has its own difficulties and drawbacks) to face a new adventure.
4. Restricts the kind of business you can set-up
One of the biggest lessons learned thus far is that not all kinds of businesses can thrive on the Internet. Some businesses are simply not suitable for this commercial medium.
Customers may not be ready to change their buying patterns for some products. Take apparel, for example. Studies show that customers are not flocking online to buy clothes because they are unsure of accurate sizing and do not want to take the trouble of returning items that do not fit well. It will take time and effort to educate consumers before they are ready to change their shopping behavior.
Even if your business suits the Internet medium well, some of your clients may still hesitate to do business with you over the Web. Security of the transaction is usually the main concern. Others simply want to do business with someone they have established a personal connection talked on the phone, shook hands with and met face-to-face. If you are faced with this situation, be sure to offer viable alternatives that would allow your clients to do business with you outside of the Web.
5. Opens you to unwanted communication
One of the “occupational hazards” of running an Internet business is unwanted commercial email. If you post your email in your site, or include it in your forms to allow legitimate customers to contact you, be prepared to receive a deluge of spam emails. Some Internet entrepreneurs receive up to 150 spam emails in one day. That’s a lot of useless emails!
Unscrupulous marketers harvest emails from web sites and offer them to unsuspecting clients by claiming that your email is part of an “opt-in list.” To counter spam, you can put filters in your email client or you can look for mailing scripts that do not incorporate your email addresses in your HTML codes.
6. Be prepared to protect and defend your web site
Even if you are a small business, your site could be hacked or injected with malware. The last thing you want is to wake up in the morning to see your website defaced and all your content wiped out. Or you may go to Google, only to find that the search giant is blocking your site and preventing users from accessing it because your website has malware. The malware can also result in the overloading of your server, resulting in the crashing of your website.
It is important to be aware of these problems and take steps to help you counter hackers and malware. Install security software on your sites. Routinely scan your website folders for files that shouldn’t be there. Change the passwords that you use to access your website, including software and third party applications, on a regular basis — and don’t use those passwords in other places on the Web. Sign up for server downtime alerts to let you know whether your website is down. Before you decide on the web host, check what kind of support they offer in the event that your website has been hacked or injected with malware (will they help you clean up your site, or will they throw everything at you?).
7. Getting visibility on the Web is not easy
Just because you have a website does not mean that people are going to come and do business with you. Getting ranked in Google takes time, and search engines constantly adjust their algorithms that you need to be aware of. Your site could be at the top of the search engines today, and totally gone tomorrow — which basically means that your business is toast.
You need to be prepared to market your business, both offline and online, to give your website the visibility it needs. Create your web business with the idea of developing a brand for it. Use the social media to raise awareness about your web business. Find ways to get the media to notice your web business.
Starting and running a web business is not easy. It takes a lot of work to succeed on the Web. If you decide to run a web business, be sure to work hard for it. After all, a web business is just like any business: for it to succeed, it has to make money; and to make money, it has to follow universal business principles.
For more information, read How to Sell More Online: 40 Tips for the Small Online Entrepreneur
Recommended Books on Starting a Web Business:
- Your First $1000 – How to Start an Online Business that Actually Makes Money
- Million Dollar Web Presence: Leverage The Web to Build Your Brand and Transform Your Business
- Web Business Success: The Entrepreneur’s Guide to Web Sites That Work
- Engage!: The Complete Guide for Brands and Businesses to Build, Cultivate, and Measure Success in the New Web
- The Six-Figure Second Income: How To Start and Grow A Successful Online Business Without Quitting Your Day Job
- Pros and Cons of Financing a Business
- How to Succeed Online with Your Web Business
- 12-Step Template to Write an Effective Sales Letter
- Get People to Receive and Open Your Marketing Emails
- What Works on the Web? 12 Lessons From Successful Home-based Online Entrepreneurs