Many entrepreneurs all over the world are taking their ambitions into the virtual realm and establishing online businesses. This is truly the wave of the future, and a major development in technology that has changed the face of business forever, but many business owners are still wondering if online business is right for them. There are several pros and cons of running an online business, and it is important to understand them before getting started.
Pro: Lower Start-up Expenses
One of the biggest killers of small businesses is the burden of start-up costs. Many entrepreneurs in today’s volatile economic climate simply can’t take the risk of investing several thousand dollars in personal savings, as well as thousands more in business loan funds, on an idea that may not bear fruit. Online businesses can be run from home with very little in the way of necessary start-up expenses. This is a great option for entrepreneurs who are working under tight budget constraints.
Con: Low Visibility
When you start a business with a real-world retail location or established office, you gain instant exposure simply from being out in the world. Online businesses are somewhat different. While the internet is an incredibly vast and heavily trafficked information super-highway, your online business is going to start out in a dark little virtual alley on the outskirts of town. It takes time to build your visibility as an online business.
Pro: International Business Potential
Traditional businesses, particularly small businesses, operate locally. Your customers are drawn from the geographical area immediately surrounding your office or retail location–this is the formula that has worked for years. An online business, however, has the benefit of offering instant access to an international market. When customers in Europe or Asia, or any other part of the world, can access your business just as easily as any other on the net, your potential customer base expands worldwide.
Con: Website Maintenance
When you run an online business, your website is your most valuable piece of real estate. In order to keep your business running, you will need to constantly oversee maintenance of your website. This is something with which many entrepreneurs are not familiar, so be prepared to learn a lot of new jargon and get your feet wet in the world of website maintenance. If this intimidates you, online business might not be the best route to take.
Pro: Reduced Overhead Costs
One of the most prevalent benefits of e-commerce that online business internet moguls love is the low overhead. Hosting a website is much cheaper than leasing an office or retail store. Your workforce can be streamlined to just a few employees, or you may be able to manage everything yourself. Overall, an online business costs much less than a traditional business to operate on a day-to-day basis.
Con: Difficult to Build a Reputation
Many new online business owners may find it difficult to build a customer base. This is because a lot of people in today’s market need to be convinced of your reliability before they’ll consider purchasing your products or enlisting your services. It’s not easy to build a reputation as an online business, especially when the majority of customers will never meet you face to face. However, if you can overcome this and the other disadvantages of running an online business, you stand to find great success in the virtual realm.