7 Shocking Reasons Most Online Businesses Fail

A couple smile because they know why online businesses fail.

How many online businesses fail? Well, approximately 20% of new online businesses fail during the first two years, 45% within the first five years, and 65% within the first ten years, according to the BLS (Bureau of Labor Statistics). Only 25% of newly founded businesses survive for 15 years or more. These statistics are higher even for online businesses. But do you know why?

A couple smile because they know why online businesses fail.
Photo by Andrea Piacquadio

Operating an online business involves a lot of different factors. As a result, it is difficult to forecast success or failure. We have seen innumerable businesses go out of business. Before launching your own internet business, it’s crucial to know these 7 reasons why online businesses fail, so you can prevent yours from going under.

Welcome to the Online Space

The internet has made it possible for businesses from different countries to sell to customers all over the world. This has led to an increase in branding, sales and customer base of various businesses.

There are many ways that businesses can connect to their customers online, such as through social media platforms like Facebook, TikTok or Twitter, or through email services like Gmail or Hotmail. The internet allows businesses to create their exact customer personas.

The Internet has also given businesses the ability to collect the right feedback and measure the right metrics from their customers, in order to provide them with their required value.

7 Reasons Most Online Businesses Fail

Without a doubt, the internet has revolutionized how businesses prosper. “But are online businesses successful?” You may ask.

Of course, the answer is yes, but not everyone is successful. Before you start your own online business, it’s crucial to understand the various factors that contribute to the failure of most online firms. 7 of the most frequent reasons why online businesses fail are listed below:

1. They never launch

Yeah, we just have to start from here. This is by far the most common reason for failure. You spend months or years planning, researching, building and tweaking — but you never actually launch your business online. It’s easy to get lost in the details and never push the “publish” button on your website.

Yes, launching a business online can be a difficult and stressful process. If you’re not careful, you could waste a lot of time and money before finally launching your first website. But when you have made a little research and met with some people who have built successful online businesses, then it is time to start yours.

2. No passion for their offline business

So many people do not really care about what they’re doing. They’re just looking for another way to make money without having to work very hard or put in a lot of effort.

Please, If you don’t have a passion for what you’re doing and a desire to learn and grow, then it won’t last long online. Taking a business online still requires a lot of work, and if you are not ready to work hard, your business might fail too.

3. No clear vision of what they want their business to achieve online

How can anybody else know where you want to take your company if you don’t? Your business should have a clear vision for where it wants to be in five years, and this vision should be recorded somewhere (preferably somewhere public). This will help you stay on task and make sure that everyone is working toward the same objective.

Photo by ROMAN ODINTSOV

It’s a typical scenario: After starting a business, you try to decide where to put your website or store. The issue is that most websites and  e-commerce store never receive the traffic or sales they want since there isn’t a clear understanding of what they hope to accomplish for their businesses online.

It is impossible to build a website that will draw new users and bring in money without this goal. Instead, the majority of new companies make the error of creating a website that resembles every other website on the Internet. They have no understanding how to effectively use their website as a marketing tool.

4. Not Being Willing to Learn New Skills

Running an online business requires some skills that are different from running an offline business. You can’t just expect to start a business online and make a million dollars overnight. It takes time, effort and knowledge to do well. If you’re not willing to learn new skills or put in the necessary work, then you’re going to fail.

It’s hard to know everything about the Internet because it’s a continually evolving environment. Online success requires a constant willingness to learn new abilities; else, your company will quickly become obsolete.

5. Poorly defined target audience

You must clearly identify your ideal client before you start a business online. One major difference between online vs offline business models is- In your offline business, your customers see your product and come to you. In the online business, you go to find your customers. So, you must clearly know who you are looking for.

The customer base is the most crucial component of an online business. How can content or products be created to appeal to your customers if you don’t know who they are?

6. Giving up too early before seeing results

Most people decide to launch their own business because they are passionate about it or because they want to earn money doing what they enjoy. However, not everyone is cut out to launch their own company, and perhaps the reason is that they quit up too quickly when things don’t go as expected.

If you want to be successful in business, you can’t give up. Don’t give up on your goals if you don’t start to notice results right away! Every business needs time to become profitable; even Facebook had a difficult beginning.

Photo by subham saha

7. Having unrealistic expectations

Unrealistic expectations are one of the primary reasons online businesses fail. The first wrong question many new online businesses ask is “how long does it take to start a business online and become successful?”

Many new business owners believe they can start their own internet business without any experience and become wealthy overnight.

They don’t know what they’re doing, but they want to make millions within a few months. This will not take place. Building a great internet business takes time, especially if you want it to be long-lasting and resilient. Before you begin anything else, you need to educate yourself about operating an online business.

Conclusion

The world has unquestionably changed. The days when consumers would pay more for a good or service just because it was made locally or by a reputable company are long gone. When it comes to internet shopping, customers now have more alternatives than ever before, and they also want quick and simple delivery of their purchases.

If you are planning to take your offline business online, you must take into account the above reasons why most online businesses fail and run from them.

.

Subscribe To Our Newsletter

Get updates and learn from the best

Share This Post

Do you want more Sales & Qualified Leads?

Hey, I’m Sunday Samuel. At Dgazelle our core focus is to help individuals and business owners grow thier business predictably & profitably. My only question is, will it be yours?

About Dgazelle

We are a full service Digital marketing, Tech & Ai Solutions Company that is registered in Nigeria and the United States. Our story originates from our experience in advertising, marketing, technology and design. Our work is inspired by art, passion, and one simple principle – To consistently deliver excellence to every individual or business we serve

More To Explore

Automate
Online presence

How to Structure and Automate Your Business to Scale Fast and Avoid Entrepreneur Burnout

Running a business in Nigeria is not for the fainthearted. From inconsistent power supply to handling stubborn staff and clients, to managing cash flow issues, the pressure on entrepreneurs is real. Many business owners start out with energy and passion, only to find themselves overwhelmed by endless tasks. The result is burnout, and a business that feels like a heavy burden instead of a wealth-building machine.

But here’s the truth: if your business is not structured and automated, you can’t scale sustainably. At best, you’ll hit a ceiling. At worst, you’ll collapse under the stress. The good news is that with the right structure and smart automation, you can build a business that grows beyond you, while you enjoy peace of mind.

In this article, I’ll break down step by step how to structure and automate your business so you can scale fast and reduce burnout. This is not theory. These are practical strategies Nigerian entrepreneurs can apply immediately.

Step 1: Build a Solid Business Structure First

Before you even think of automation, your business must have a proper foundation. Many entrepreneurs in Nigeria operate like hustlers — no defined processes, no documentation, no clear job roles. That’s why they can’t leave their shop for one day without things falling apart.

To structure your business:

1. Define Clear Roles and Responsibilities
Stop being the “chief everything officer.” List out all the key activities in your business — sales, marketing, operations, finance, customer service. Assign them to specific people or create job descriptions, even if you are still the one handling most of them for now. This makes it easy to delegate later.

2. Document Your Processes
Every successful scalable business runs on systems. Write down how you onboard customers, how you deliver products or services, how you handle complaints, how you pay vendors. Think of it like creating a playbook. This makes it easier to train staff and maintain consistency.

3. Separate Personal and Business Finances
A lot of entrepreneurs mix personal spending with business money. That’s the fastest way to kill growth. Open a dedicated business account. Pay yourself a salary. Track your expenses. When your finances are structured, scaling becomes possible.

Step 2: Identify Repetitive Tasks That Drain You

If you constantly feel drained, it’s because you’re spending energy on tasks that could be automated or delegated. Sit down with a pen and write out everything you do daily and weekly in your business. You’ll notice many repetitive tasks like:

Sending payment reminders

Following up with leads

Updating records

Responding to the same customer questions

Scheduling meetings

Inventory updates

These tasks are important but they don’t require your personal attention every time. Once you identify them, you’re ready for automation.

Step 3: Leverage Automation Tools to Save Time

Automation is not about replacing people with robots. It’s about using tools to handle repetitive processes so you can focus on high-value activities like strategy and growth. Here are areas every Nigerian business owner can automate today:

1. Marketing Automation
Instead of manually posting on social media, use tools like Buffer or Hootsuite to schedule posts ahead of time. For email marketing, platforms like Mailchimp or ConvertKit allow you to set up automated follow-up sequences. Imagine a system where once someone downloads your free guide or fills a form, they automatically receive nurturing emails without you lifting a finger.

2. Customer Relationship Management (CRM)
A good CRM helps you track leads, follow up automatically, and manage customers in one place. HubSpot and Zoho are popular options. Instead of carrying customer details in your head or WhatsApp chats, you’ll have a proper system.

3. Accounting and Payments
Use tools like QuickBooks or Wave for bookkeeping. In Nigeria, you can also set up automated payment systems using Paystack or Flutterwave so customers can pay online without stress. That reduces the headache of chasing payments manually.

4. Task Management
To avoid confusion with your team, use platforms like Trello, Asana, or ClickUp to assign and track tasks. This ensures everyone knows what to do without you micromanaging daily.

Step 4: Hire Smart and Delegate Properly

Automation is powerful, but people are still essential. If you want to scale, you must build a team. Many entrepreneurs delay hiring because they think it’s expensive, but the real expense is trying to do everything yourself.

Here’s the formula:

Start with virtual assistants for basic admin tasks.

Hire part-time or contract staff for specialized roles like social media or accounting.

Train employees using your documented processes so they can run the business even when you’re away.

Delegating doesn’t mean losing control. It means freeing up your time for high-level decisions like partnerships, expansion, and strategy.

Step 5: Use Data to Make Better Decisions

One reason entrepreneurs burn out is because they make decisions based on guesswork. If you don’t track your numbers, you’re running blind.

Some key metrics you should monitor:

Monthly revenue and expenses

Customer acquisition cost

Conversion rates from leads to customers

Average order value

Repeat purchase rate

When you automate data collection using your accounting software, CRM, or analytics tools, you can see trends clearly. This helps you know where to cut costs, where to invest more, and when to scale.

Step 6: Build a Scalable Mindset

Even with the right tools and team, scaling won’t happen unless you shift your mindset. Many Nigerian entrepreneurs are stuck in survival mode — always thinking short term, chasing quick profit, or afraid to let go of control. To truly scale:

Stop working in your business and start working on your business.

Focus on building systems, not just hustling for sales.

Invest in leadership skills so you can inspire and guide your team.

Take breaks. Rest is part of productivity. A burnt-out entrepreneur cannot build a thriving company.

Practical Example: A Boutique Owner in Lagos

Let’s make it real. Imagine a boutique owner in Lagos handling everything — buying stock, marketing on Instagram, taking orders on WhatsApp, delivering clothes, and managing cash. No wonder she’s stressed.

Here’s how she can scale with structure and automation:

Document her supply process and create a calendar for stock replenishment.

Use Paystack for payments instead of manual transfers.

Set up Instagram automation tools to schedule posts weekly.

Hire a delivery partner instead of doing it herself.

Use a CRM to track customer sizes, preferences, and purchase history.

Employ a shop assistant to handle walk-in customers.

With these changes, she reduces burnout, increases sales, and positions her business to expand into multiple branches or even an online store.

Final Thoughts

Scaling your business in Nigeria is not just about working harder. It’s about working smarter by putting the right structure in place and automating repetitive tasks. When you do this, you free up energy, reduce stress, and create room for exponential growth.

Remember this: structure is the foundation, automation is the fuel, and mindset is the driver. Get these three right and your business can grow beyond limits.

If you want professional help in structuring and automating your business for faster growth, Dgazelle Agency specializes in building high-converting systems that help entrepreneurs scale without burning out. Contact us today and let’s help you build a business that works for you, not the other way around.

Quality leads
Ads

9 Proven Ways to Attract Quality Leads with Paid Ads

Paid ads allow you to target based on age, location, interests, income level, and even behaviour. If you skip this step and target broadly, you will attract people who will never buy. Imagine running a Facebook ad for luxury wristwatches and targeting all Nigerians aged 18 to 60. Most of them cannot afford it. Instead, you can target professionals in cities like Lagos, Abuja, and Port Harcourt with interests in fashion, luxury, or business.

web design
Web design

10 Web Design Strategies That Can Double Your Sales in Nigeria

A well-designed website isn’t just about looking fine. It is the foundation of your entire online presence. It decides if your customers will trust you, if they will buy from you, and if they will come back again. In short, good web design can 10x your business growth.

Do You Want To Boost Your Business?

drop us a line and keep in touch