With the constant improvement in technology and the Internet, online businesses are thriving, allowing individuals to work from home or a virtual office like ones offered on Regus (or Panera) doing a variety of things.
Although advice is everywhere for businesses, it’s hard to weed out the good advice and the bad advice, especially when it comes to online businesses. There are a lot of incredibly successful ones out there, but there are also some that want to seem more successful than they are, and taking their advice should be cautioned.
When it comes to owning and running an online business, it’s much different than running a brick and mortar in many ways (not just that you don’t have a physical store or office location). In some ways, it’s actually more difficult, and in others, it’s preferable. When you’re planning your start-up, you should know the differences in running both of them before deciding which is right for you.
- Startup Costs – Online businesses tend to have much lower startup costs than brick and mortars. Because most online businesses don’t require you to actually pay rent for an office space or store every month, and it’s just included in your home costs, you won’t have to dish out tens of thousands of dollars to get started. While some businesses have to have a brick and mortar location (you can’t invite people into your home to eat dinner and operate as a restaurant, for example), many other businesses can fully operate as an online business. Some companies even start out as an online business and then work their way up to brick and mortar if that’s what they desire. This gives them a chance to test the market and get a start for much less money.
- Marketing – Brick and mortar businesses have the advantage of being something that people can drive by and see. When placed in a good location with signage, a lot of a brick and mortar business’s marketing is done for them. Of course, they still have to market significantly, but with an online business, all marketing must be done intensively, including networking, online marketing, outbound marketing, etc. Because most online businesses are operated out of an individual’s home, there’s nothing for people to physically see, post locations of online, etc.
- Legitimacy – Establishing the legitimacy of an online business is difficult because there are so, so many (really, there are a lot) of scammers out there, and people are starting to learn to be more careful when it comes to doing business with someone online. Brick and mortars don’t have this problem because someone can physically walk into a store, see the products or services taking place, speak with employees, and there’s a place to report/go to if there are problems. To help establish the legitimacy of your online business, you can encourage customers to leave you reviews, boost up your social media presence, engage in conversation with others online, network, and create contracts that protect yourself and your client. This helps establish legitimacy and for them to know that you’re established, and assuming they read the contract, they’ll see that you have to abide by rules as well as them.
- Tangible Products – While the products you’re selling for your online are certainly tangible, they’re not something that the person can touch, see, or try on prior to purchase. This turns a lot of people off from buying a product, especially when sizing clothing comes into it, because so many products come in the mail looking so different from what was supposed to be ordered. Even things like looking at colors and sizes of furniture or housing items is difficult to predict. If you want to sell products as an online business, you can avoid these issues by having a quality return or refund policy that allows people to try on the products and return them if they’re not right, providing accurate measurements for whatever product you’re selling, and encouraging customers to provide reviews for you so that people know how good your products are!
When starting a business, the choice between a brick and mortar and an online business can sometimes be overwhelmingly difficult, but understanding the differences and how they will affect your business will help you make the right decision.