What are the risks of doing online business?

Many people set themselves a goal of earning enough via their online products to either scale back their day jobs or give them up altogether.

But as you become more reliant on your online income it becomes increasingly important to understand the risks to your business systems so you can minimize them whilst at the same time putting plans in place to help you recover if an income-disrupting event should occur.

There are a number of potential online and offline points of failure which could compromise your ability to do your online business.

Since internet marketing is technology heavy, in this article we will focus on a few of the technical challenges you may encounter and discuss things you can do now to minimize their impact on your earnings.


Internet Security

You also need to be aware of the potential security risks. If you collect information such as payment information or customer data online, for example, your website could be a target of hackers or authors of malicious software.

If you are going to take your business online–especially if you intend to collect online payments–you need to ensure you have protections such as a secured server and firewall in place.


Startup Costs

While you can design a website yourself, many companies spend money to have a website professionally designed and pay copywriters to provide them with web copy. You also need to pay for a domain name and website hosting.

If your business is not the one that is searched for frequently online, or if there is too much competition online and your business is far down on the search engine rankings, there may not be enough traffic to your website to make the investment worthwhile.

Related article: Setup a Website


Web Hosting Problems

Problems with your web host can be devastating because often the first you will know about it is when you see the dreaded “Account Suspended” page coming up where your site used to be.

This can happen for a number of reasons, but typically it is because you have exceeded your resource allocation in some way. This obvious solution to this is to maintain two (or more) separate hosting accounts, preferably with different service providers.

In the event of a dispute with one you can switch your site over to the other until the problems are solved. Incidentally, this is why it is a good idea to use a domain registrar that is independent of your web host.

Assuming you have more than one site, you can also significantly hedge your bets by hosting them separately. Then even if something bad happens to one account, you can continue to fly on your remaining engine while the first one gets fixed.


Search Engine Ban

Almost as bad as having your site suspended is having it not indexed by the search engines. Or perhaps it’s worse because it is a lot harder to rectify. You can probably avoid it happening by using strictly white hat SEO techniques to promote your site, and can certainly mitigate its effects by running more than one website.

Beyond that you could look at driving traffic using social networking or building a subscriber list, so you are not completely at the mercy of the search engines.


Falling out of Favor with a Monetization Partner

In a similar vein, you should do all you can to stay strictly within the terms of your contract with whatever monetization partners you have – the internet is littered with sad tales of those who have been kicked out of Google’s AdSense program for falling to comply with their conditions. So you should also monetize your sites in several different ways rather than rely on a single partner.


Website Hacked

In case you have not heard, there are plenty of unscrupulous individuals and syndicates roaming the net. Whether out of mischief or malice, they often hijack others’ sites for their own ends.

Whilst you may not be able to stop a truly sophisticated hacker who targets your site, you can deter most other opportunistic attacks by maintaining strong security around login details and staying up to date with new releases of your website platform.

As the saying goes: when being chased by a lion, it is not necessary to out-run the lion, just the other people running from it.



Another risk of internet business is fraud or deception. You have very few ways to verify the person who is providing you with credit card or bank account information is actually the owner of that credit card or bank account.

You may send out merchandise only to find you have been given false information, and you can end up out of both the money and the merchandise.


Computer Failure or Lost of Communications

Don’t forget that your computer and internet connection are also vital links in your business’s technical chain. Do you have a secondary machine in case your regular one gives up the ghost? Do you have backups of your mission-critical data? How will you manage your site if you lose your internet connection?

My answer to these questions is the same as all the others which is to have a backup plan that you can activate at short notice to minimize downtime.



As you can see, most of these risks can be addressed by building redundancy and diversity into your business. There’s nothing new there as financial experts have been doing it for years.

But perhaps it’s time we in the online marketing game grow up a bit and learn some of these lessons from others’ experiences rather than our own – it’s much less painful that way.


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4 Replies to “What are the risks of doing online business?”

  1. Thanks for the overview of technical risks in creating web-based businesses. It’s good to consider all of them when starting something up, and I agree with your suggestion to implement redundancy at all steps possible. I also didn’t know one could become “banned” by search engines – that would be very inconvenient indeed! Maintaining two hosting services is an excellent suggestion as well, I could see how that would be useful.

    1. Yup, always need to plan ahead and to have redundancy. If your website is almost the same as another website, you may probably get ranked behind or perhaps banned by Google as this is as good as copying. We all want to learn from successful websites, but we can only take away their lessons, not follow exactly word by word. I am glad that my article is helpful to you. 🙂

  2. Hi Peter, your article about the risks associated with working online is really correct. There are many ways to have negative issues, but I feel very confident in Wealthy Affiliate. I have been a member for a little while, and there has been some minor issues, like system breakdowns and such, but it is normally taken care of pretty quickly, I really trust Kyle and Carson have our backs in the community. Anything can happen, and no one is completely immune from internet meltdowns and people with evil intentions, but I think WA is really secure. The rest of the internet scares the heck out of me! Great article, thanks for sharing!

    1. You are welcome, Eric. That’s great to hear that you are a member of Wealthy Affiliate. The Co-founders are great mentors and always answer to our queries when we have questions that we are uncertain of. Wealthy Affiliate is always very secure till this day of time. So anybody who wants to do online business should consider of taking a look at Wealthy Affiliate.

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