Your dream is to create your own business. You have a gleam in your eye. Hopefully, you will make a great profit and help people along the way. The obvious question is should you build an online business or a have a traditional brick & mortar business?
There are pros and cons to both which I will let you know in order for you to make an educated decision which path to follow.
Brick & Mortar Business Pros
1. It’s a great way to establish trust. People like doing business with people they can see face to face. It is easier to establish trust and build a relationship.
2. Separate work and home life. As soon as you leave your business for the day, you can forget work and concentrate on your home life.
3. No distractions. You don’t need to worry about what is happening at home because you are at work. There are no kids to nag you while you are working.
4. By seeing actual products, customers are more likely to want to buy them.
Brick & Mortar Business Cons
1. Rent eats up a large amount of profit. I have known many businesses that closed down because they could not afford the rent.
2. It’s hard to get approved for good loan options. In order to get a loan with good terms, banks require certain criteria. For instance, banks will look at your credit score and report, debt to income ratio, how long you have been in business, money in the bank, possible cosigners, and other proof that you will pay back your loan. If you don’t meet all their criteria, you might only get approved for high interest loans or not get approved at all for a loan.
3. You will need employees to help you run your business. Due to minimum wage laws in many states, many business owners will have to pay their employees more. As a result, the business owners will lose money and reduce their profits.
4. Many storehouses require the businesses to buy inventory in bulk. If the businesses fail to sell everything, they lose money.
5. Office supplies are more costly than people realize. The cost of pens, papers, and computers really add up. It can make a serious dent in how much profit you make.
Online Business Pros
1. Low startup costs are a definite benefit. Basic costs include an adequate computer, WiFi connection, a training program, and a domain name. I highly recommend Wealthy Affiliate for maximum success in learning how to start a successful online business.
2. If you have a home based business that is your principal place of business, you can get business tax write-offs! Money used to repair or maintain your business space is tax deductible. You can deduct a percentage of your bills for utilities, homeowners insurance, or homeowners association fees. You can also deduct mortgage interest and property taxes. You can also deduct rent or if you own the house, the depreciation of the home.
3. No commuter costs or wasted time commuting. No need to worry about the rising price of gas or a long train ride. You can spend your precious time making money instead of wasting money and time commuting.
4. You have autonomy. You can make your own decisions and choices. There is no boss breathing down your neck.
5. You have more family time. You are not locked into a 9 to 5 schedule. You are able to spend more time with your family and kids. If you want to attend your kid’s birthday in school at 1:00 pm, you can take off.
Online Business Cons
1. You need a proper work life balance. If you allow your home and work life to become too enmeshed, it will be harder to get work done. You need to have self discipline and focus on your business without distractions.
2. It can get lonely. Spending hours online can be lonely. It’s important to build an active social life outside of work and schedule time to get out of the house.
3. You need to build your own business in order to get paid. You need to be willing to put in the time and effort in order for you to be successful. It may take months. If you are unable to do this, then working in an online business is not for you.
4. You need to learn how to get a competition edge over other online businesses. You need to learn how to properly use SEO for your website, utilize social media, PPC, or other forms of advertising in order to build your business.
Online businesses are much easier to break into than brick & mortar businesses. The startup costs are lower, you can get business write-offs, save money on commutes, autonomy, and have more time for family. How great is that?
My goal is to help you make your decision to build the best business possible. I hope this article helped you. Feel free to share your successes and lessons to me. Good luck to everyone!
Note: Nothing here is meant to be taken as financial or legal advice. Please contact your own financial advisor or attorney for guidance.