Starting a business is risky. It’s the reason why everyone doesn’t have one. It can require thousands of dollars of investment just to get off the ground. 9 out of 10 of all new businesses fail in the first year. Before any profit is made, things like product inventory, incorporation, advertising, employees, accounting, insurance, licenses, commercial space etc. have to be paid for.
Enter the internet..
The digital world has taken away a lot of the risk of starting the business of your dreams. There are still start-up expenses involved in the beginning but they are not nearly as high as starting a brick and mortar business. License and incorporation fees are going to have to be paid online or offline but most of the other expenses can be avoided in the early stages by starting with your online presence.
If it can be sold in a store it can be bought online and shipped to the customer’s home. At the very least it will add an additional revenue stream for the business. There are plenty of advantages to starting a business online but here are my top five.
1. There is no immediate need for full-time in-house employees.
What makes online business so powerful is its scalability; meaning you do a little bit of work for a greater result. With automation tools you can have a lot of your tedious data entry tasks done without you even thinking about it. With PayPal you can accept payments online through your website without you even knowing a credit card was entered.
If you are selling digital products that are to be downloaded then there is no need for pre-ordered inventory or commercial space, thus eliminating the cost of rent.
For when you actually need the assistance of a real human, sites like oDesk.com and Elance.com make it possible for you to outsource work to people on a for hire, monthly or even a full-time basis.
Things like insurance and security are needed for online as well as online but securing intellectual property stored online in the cloud is a lot less expensive than doing the same for merchandise in a store that is susceptible to theft or fire
2. You have the freedom to travel.
There is no need for a physical location in most cases so there is no need to stay in one place. If you need to pack up and move your company to another state where there is more opportunity, it can be as simple as packing up your laptop and accessories and leaving. With a physical ‘brick and mortar’ business, it would be a little more difficult to relocate. You will most likely be constrained to whatever lease agreement you may have in place.
As you know, business and tax laws vary from state to state. Having your operation online gives you the freedom to choose where you want your business to be incorporated. You would have to have some sort of address established in the state but it doesn’t have to an actual store. There are a few states who’s laws work best for the traveling internet entrepreneur. *I am not an accountant or a business lawyer so please consult one before getting started.*
3. The whole world has access to what you’ve got to offer.
You aren’t limited to your immediate geographical area anymore. You aren’t limited to ANY geographical area for that matter. Offering your products and services online opens your business offering up to the edges of the world. The internet doesn’t sleep and there are billions of people online looking for solutions to their problems, while YOU are sleeping.
4. You are at the fingertips of a growing online market.
The internet definitely isn’t going anywhere anytime soon as more and more people are gaining access to an internet connection or a smart phone every second. E-commerce is following the same trend as more and more people are becoming comfortable making purchases online and from their mobile devices. From a consumer’s standpoint, making purchases from the comfort of your own home can save you a lot of time, and for certain products, shame or embarrassment.
5. You can inexpensively test your market.
Not every brilliant idea translates into a consumable product or service. And as you know, the failure rate of new businesses is very high. Another advantage of starting a business online is the ability to gauge interest without actually having the product readily available for sale. One example of this that I’ve seen a lot is a preview or ‘beta’ page with a prototype of a product where people can sign up to ‘be the first to know’ when the product is made available. This can be done with a food product, a clothing line, an app, pretty much anything. It’s a great way to gauge interest before you go all in with a final product.
You don’t need $10,000 to start a business anymore..
There are hundreds of ways to make money online and frankly, who can afford NOT to open up shop to the billions of people on the internet. There are still a lot of traditional brick and mortar businesses that are not providing their products and services online, constraining themselves by business hours and management of on premise staff.
All you need is a website, a product or service and consistent potential-buyer traffic to that website. No permits, no city council meetings, no weather constraints and depending on where you live, no off duty police officer.
Recommended reads: ‘The Four Hour Work Week’ & ‘The $100 Startup’