Brick & Mortar Business vs. Virtual Online Business

A Comparison of a Brick & Mortar Business vs. Virtual Online Business

If you are looking to break out of the 9 to 5 grind and thinking about starting a business one of the questions you are probably asking yourself is “Should I start a brick and mortar business on the street or should I launch a business online?” Although the final decision is yours to make, it may help you to weigh out the comparisons of each to help you make an informed decision.

Brick and Mortar Business

If you start up a brick and mortar business on the street it is all about location, location, location. Depending upon where you live this can be an interesting challenge and at the same time a gamble when it comes to making a profit. What’s more is you have to be ready to handle other tasks associated with starting a brick and mortar business such as:

 Market Research: Starting a brick and mortar business means investing a significant amount of time researching the market and demographics for the area where you want to establish your business. This can mean a lot of hours of pounding the pavement doing surveys and other research related to demographics.

 Start Up Costs: Starting up a brick and mortar business usually requires a significant investment with a hefty down payment. For example, if you are starting a franchise it is not uncommon to for the start-up costs to be in the $200,000 range with a down payment of at least one quarter to half of that amount. If you do not have your own money to invest you will go into hock to the tune of $200,000 and who knows if you will be able to match your return on investment and then some.

 Overhead Costs: A brick and mortar business has a lot of overhead costs which include inventory, taxes, utilities, insurance, store lease, and labor, to name a few. For you to make a profit you would have to ensure that you make enough sales to pay the bills with a little money leftover for your salary. It is not uncommon to have monthly expenses in excess of $5000 easy.

 Long Work Week: Many people start their own business to escape the rat race however, it is important to keep in mind that if you own a brick and mortar business you better be ready to invest a longer work week than the 9 to 5 grind.

Virtual Online Business

With a virtual online business you can easily pinpoint your location where you want to offer your products and services. If you want to offer your products to the world that is great. If you want to target specific demographics you can do that instead. You are not limited to a specific location as you are with a brick and mortar business. In comparison with a brick and mortar business some of the other considerations include:

 Market Research: Instead of pounding the pavement doing exhausting market research there are a lot of tools available online that allow you to research your market right from your computer keyboard. Tools such as keyword tools, analytics tools, chat rooms, social networking sites, and others allow you to easily research a product niche and get to know your market without ever having to leave your home office.

 Start Up Costs: A lot of online entrepreneurs start up their business for as little as $50 with as little as $100 per month spent on advertising. This is a significant difference when you compare it to the astronomical costs of starting a brick and mortar business. If you spend $100 per month on advertising and sell $20.00 widgets, you would only have to sell 6 widgets to produce a profit. What’s more is there are so many free online tools that allow you to promote your business with a simple time investment instead of a monetary investment.

 Overhead Costs: If you run a business online there is very little overhead costs unless you choose to store inventory. The only other overhead costs are a laptop computer, Internet connection, and telephone and most business users do not even have a telephone. Instead they opt for VoIP services such as Skype which allows you to make worldwide calls for free to other Skype users.

 Short Work Week: When you set up an online business it operates 24 hours a day 7 days a week. Thanks to automated software you can generate sales with your business even when you are away from your computer and while you are sleeping. Instead of having to limit your customers to specific hours you can be open 365 days year round without having to give up your life. Although you still have to plan and set goals, you have the convenience of setting your schedule as you wish instead of running your hours around a scheduled work week.

So when it comes down to comparison which would you rather do? Pay enormous start up costs for a brick and mortar business and $5000 per month worth of bills or start an online business with very little start up costs and low overhead? Although the choice is yours starting an online business almost seems like a no brainer.

Respectfully Dedicated To Yor Success!!

Derek Bayer


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