3 Main Benefits of An Online Business Vs Traditional Business.
If you are thinking about starting your own business, but you’re not too sure if you should choose an online business or a physical store… Let me share with you about some of the benefits of an online business over the traditional brick and mortar business. This will explain why I chose an business.
Growing up with an unsettled entrepreneur mum, I feel like I’ve personally been in business all my life.
And here’s my summary of the main differences between an online business and a traditional brick and mortar business…
Traditional Brick & Mortar Business:
1. Lack of Time:
Most brick and mortar business owners often find themselves working longer hours in their business than if they were working a normal 9 to 5 job . This was definitely the case for our family businesses growing up.
We often found ourselves working beyond trading hours and well into the night. There always seemed to be more work to do, visual merchandising, ordering stock, pricing stock, paperwork, and basic cleaning duties etc.
My mum never ceased to work 7 days a week, to do more and cut costs in her business. This meant that she never had any time left over to spend with us when we were young.
2. High Overheads & Lack of Financial Stability:
People often get excited about the fact that you get to write your own paycheck when you a business. This is true. However you have to pay for all your overheads first before paying yourself. For a brick and mortar business, this includes things like rent, bills, stock, marketing and employee wages. Which means that on a bad day, your actual profit margin may be so low that you are not left with much in your own pocket.
High overheads in a traditional business is a common and persistent problem that I’ve personally seen in every one of our family businesses. My parents often resorted to taking on heavy credit cards debt to purchase new stock and to pay for everyday business expenses. Also, they were often forced to delay paying the rent for their store, because there was just not enough money coming in to pay for everything on time.
And since most of these overheads are unavoidable, the only way that we were able to cut costs was in the staff department. This means that most of the time my parents couldn’t afford to hire staff. So growing up, I was always forced to work in the family business for free, just to keep things afloat. And my parents also did not pay themselves when things were tough, as long as they could keep the business from failing.
3. Small Target Market & High Competition:
As you can imagine, a traditional business is restricted to a physical location. So the success of your business would be highly restricted by the demographics of that location, with very little room for expansion and growth. (Unless you open up a second store in a different location such as in a franchise business model.)
Hence you only have a very small target market to work with, so no matter how much marketing you do, or how great your products/services are, your sales are limited by the size and demographics of that specific location.
On top of that, the success of your business would also be highly affected by the amount of competition in your local area, as naturally your target market would have more options to choose from within that area.
1. Freedom & Flexibility of Time:
The internet does not sleep. So once you set up your business on automated systems and have ads running on autopilot, your business will practically run itself even when you’re sleeping and on your days off. Your target market will always be able to view with your ads, interact with your business and purchase your products and services 24/7, leaving you with a lot of free time to spend it as you wish.
This means that you can work less while earning the same amount or more than you would, if you were running a traditional business. This is called ‘working smart’, not hard. This is probably one of the most important benefits of an online business for me personally.
2. Low Overheads and Financial Growth:
In an online business, your ongoing overheads are dramatically lower than what it would be for a traditional business. For starters you don’t have to pay for rent, employee wages and utility bills, which are the biggest costs facing traditional businesses.
The main ongoing overhead you need to pay for in an online business is online marketing, which given the right business plan, your revenue should well cover this and more.
You also don’t need a huge amount of money to set up an online business. All you mainly need is a website, which costs very little to set up, and the right products/services to sell. This is unlike a traditional business, which would cost you hundreds of thousands just to set up a physical store.
When starting an online business, if you have the right systems in place and the right training, your financial position should only be going up and up. Because as you become better with your business and marketing strategies, you will make your brand known to a growing audience on the internet, which will naturally result in higher traffic and higher sales with time.
This is unlike a traditional business, where marketing and time may not necessarily equate to financial growth and stability. Hence this is also one of the greatest benefits of an online business over a traditional business.
3. Large Target Market & Ability To Stay Competitive:
When your business is online, your target market can potentially be in the billions, as you have the option of marketing to a global audience. Hence there is no limit to the amount of traffic going to your business, and no geographical limit to your success.
And as a result, you don’t even really have to worry about the competition in your niche, because there will always be customers purchasing from you, when you are working with billions of potential customers.
I hope this gives you some insight of the key differences and benefits of an online business vs a traditional brick-and-mortar business. I can truthfully say that this is all base on personal experience, and not just an objective opinion with no substance. And based on my personal experience of both sides of the coin, I highly recommend choosing an online business.
In a world of high technological advancement, domination of the internet and unprecedented growth of the digital economy, the smartest thing you can do for yourself is fully take advantage of this, by starting your own online business.