I’ve never run a brick and mortar business before, but I’ve had the fortune of knowing several people who have. In this post, I’m going to discuss the pros and cons of brick and mortar versus online businesses.
Brick and Mortar
Brick and mortar businesses have been around since society’s existence and offer many advantages against an online business, as well as some drawbacks.
Location Based Marketing
One of the biggest advantages of owning a brick and mortar business is your physical location actually serves as marketing in and of itself. In other words, if you pick a good location, people will drive or walk by your store or business. For many businesses, the location of the business combined with good word of mouth is all the marketing they need.
The two big questions you need to ask yourself is (1) what location would be good for my business and (2) how can I make my products or services appealing enough to customers so that they will spread the word.
Cheaper rates can be found for locations that have less traffic, so you will have to determine whether or not your business will benefit enough from a good location to justify the cost.
Having a physical presence increase the legitimacy of the business. People are more willing to trust businesses that have a physical place that they can walk into. Additionally, being able to speak with your potential customers face to face can be helpful as well.
Higher Startup Cost
Rent and employees can lead to much higher startup costs for brick and mortar businesses. If you are just starting out, the perhaps you should consider trying out lower cost alternatives to test the market.
For example, if you are offering dance lessons, rent out a space within another facility. One successful dance instructor in Philadelphia rents out space at a fitness center, which is less expensive than renting out a dedicated studio.
For physical products, consider starting out with a kiosk or a flea market.
Another disadvantage is that brick and mortar business owners usually work super long hours, at least at the beginning. The key to avoiding this is to be able to hand off responsibilities to your employees and trust them to make the necessary decisions.
Web Based Businesses
I love web based businesses because of their lower start up cost and the ability to reach tons of people around the world.
Lower Startup costs
Low startup cost is a good reason to get into online business. You can get a simple website up for a few hundred dollars. In fact, you don’t even need a website to get started.
Elance, Ebay, and Amazon are just some websites where you can sell products or services without any large upfront investment. They are inexpensive to try and if you fail, then you didn’t risk that much upfront to begin with.
Work at Home
Working at home is another great perk of owning a web based business. Not having to commute saves a lot of time. Even if your commute is short, it usually takes you an hour or two to prepare and then go to work and back. Working at home offers conveniences and freedoms that you don’t get from running a brick and mortar business.
One of the biggest drawbacks is that you cannot benefit from people finding out about you through a physical location. You need to market your services, products, or website or else no one will know you exist.
This will require you to learn about things like SEO, pay per click advertising, affiliate marketing, and various other methods of online promotion. Forming relationships with other people online is also beneficial.
If you want to start an online business, come up with a plan to market it. I’ve seen many people build websites and do almost nothing to promote it. Coming up with and executing an online marketing plan will be crucial to your success.