Brick and Mortar or Online Business?

Are you the type of person who hates the grueling 8 hour daily grind that comes with becoming employed? You are probably one of the millions of people dreaming of having their own business. Now you may have saved enough money to get out of the 9 to 5 grind and invest in your own business.

You should by now have been educated that there are several business formats available for today’s entrepreneur. Should you launch an online business or go with the traditional brick and mortar setup? The decision is yours to make alone, but this article will help guide you through a wiser and more profitable decision.

Traditional Brick and Mortar Business Setup

A traditional brick and mortar business, first of all, can be very costly. The start-up costs and overhead costs include the lease, inventory, taxes, utility bills and the labor.

Apple is among the top brick and mortar electronic stores (Photo by Apple Insider)

Location is very important for a brick and mortar business–it can bring about the establishment’s success or demise. Because of this, you need to set aside a lot of time for market research to know more about the market’s psychographics and demographics where you plan to establish the business. This means doing the legwork for surveys, interviews, etc. within the area.

Finally, if your main intention for having your own business is to escape the 9 to 5 hour grind, you are in for a surprise: having your own brick and mortar business will cause you plenty of sleepless nights, and a work day that is usually much longer than the usual 8 hours. This is especially true during the first year of the business.

Pros:

  • There is a sense of trust and reliability that comes with having your own brick and mortar store. Many customers still feel safer buying from a store. There are shady websites everywhere, so having your own physical store adds a touch of professionalism.
  • Walk-ins are another benefit that comes with having your own store. This is the old-fashioned way of buying products. In high traffic locations, you can have plenty of walk-ins in a day.
  • Many customers still want to see, feel, and touch the product physically before purchasing anything.

Cons:

  • Business is only open during business hours. You can’t do business when you’re closed, obviously–since no one can accommodate your customers during that time.
  • Huge startup capital and overhead costs come with having your own brick and mortar store.

Virtual Online Business Setup

A virtual online business is arguably easier, but the work you need to do is just the same. You still need to do market research for your specified target demographics. However this time you are no longer limited to a specific area or location. Instead of exhausting legwork, you can do the research sitting comfortably in front of the computer; using all the necessary online tools, social networking tools, forums, etc.

Startup capital for an online business is dramatically less.When it comes to the costs for marketing and advertising, there is a huge difference between online and brick and mortar. Advertising is relatively cheaper, and in some cases even free. You just need to make some noise in forums, chat rooms and social networking sites and people will come to your site.

Overhead costs are also comparatively less. You only need a computer, decent internet connection, cellphone or telephone so that clients can contact you. You will need to have your own website, so you need to pay for your own domain name and web hosting. That’s pretty much it and you’re ready to open for business.

While it is far easier and less expensive to start an internet business versus launching a brick and mortar business, the work is just as hard. You’ll have to conduct market research, spend hours in front of your computer, and learn techniques that may be unfamiliar to you. However, you can do this from the comfort of your own home at any hour of the day or night. Yes, you can earn money even while you are asleep.

Pros:

  • Low costs for start-up, but open 24 hours a day, 7 days a week, 365 days a year.
  • High number of visitors in a day. It’s easy to create some noise to get people to click your link and visit your site. However, turning these website visitors into customers is another matter.

Cons:

  • False sense of security. While the internet can be a great gold mine, you should remember that the work to make money is just as hard. Internet entrepreneurs and traditional entrepreneurs are both hardworking, and persevering.
  • No personal interaction with the client. Sometimes it’s better to talk to your customers one on one, it gives them a better shopping experience.
  • There are too many distractions with operating an online business. You can easily get lost and distracted about what you want to sell. Just be sure to know what products you want to sell and stick to that niche.

How about Brick and Click?

But if you are up to it, why not get a little bit of both by making use of the Brick and Click Business Model? The Brick and Click is a business format that integrates both traditional brick and mortar (offline) and clicks (online). This means that they have both an online and offline presence, where customers can buy products traditionally through the store or they can just go online, order, and have it shipped straight to their door. This business model is already popular especially with clothing, retail, electronic and popular ‘big box’ stores.

Forever 21 is one good example of a company implementing the Bricks-and-Mortar strategy

Rachel Arandilla

Rachel Arandilla is a curious subject -- she appreciates things that are quirky & clever. She loves spontaneity and adventure. She is a carefree soul, has a deep love for travel, culture and languages. And she's beginning to wonder she keeps on referring to herself in third person perspective.

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Comments

  1. says

    Gonna have to agree with Daniel. While an online presence might be a natural progressive for a brick and mortar business, an actual brick and mortar office or shop might not be the best choice for an online business. I guess that’s because many online businesses tend to be run by individuals in their spare time with very limited cash, and when that’s translated to an offline environment, it’s a sure formula for failure.

    • John Smith says

      I agree with you – it may lead to failure. But if a person really works hard and follow all of the rules of internet marketing then this is the road to success. One have to read a lot about marketing in the web BEFORE starting it, otherwise it may be just wasted time and money…
      John

  2. daniel says

    Interesting article/compare!

    I think the right choose depends on the person who starts the business. Not everybody is made for both ways.