Increasingly, more people own or are growing their businesses online with varying degrees of success. It is important for internet entrepreneurs to be aware of the advantages and disadvantages of doing business online as this knowledge will empower them to make the right decisions and implement the correct strategies if they do go ahead and start a business on the internet. Below are the main advantages and disadvantages of running an online business.
Start-up costs are relatively cheaper than bricks and mortar businesses. Some business-in-a-box programs cost as little as $400, some even cheaper. If you are setting up your own website with your business plan you may only need to pay for a domain name and web hosting which would cost you less than $100. Even for the most expensive opportunities, they are still way cheaper than other businesses. The top scale start up costs for internet business could be $20k, which might seem expensive but when compared with businesses like the MacDonald’s franchise which cost over a quarter of a million dollars, then it puts things into better perspective. Operational costs and administrative expenses are also relatively lower than other businesses with little or no staff required. Many internet entrepreneurs work from home which means that expenses like lighting and heating and office expenses which would normally be incurred in an office block, are saved. Running a business online gives great flexibility. This is because the business can be run from anywhere. An entrepreneur could be on the beach on holiday with her family and still be running her business normally. This flexibility helps the entrepreneur does as she pleases with her time. She may decide to work between 12 midnight and 6 am if that is her most productive hours. Online businesses can reap the rewards of free and cheap advertising, through videos, article marketing and social marketing. Even with more expensive advertising options like pay per click, due to the number of Internet users, to potential to grow your business is very high especially if you can effectively drive traffic to your website.