What are the top benefits of an online business?
Today, you’ll get the top advantages of starting a business. We’ll also look at how you can start your own online business.
Want to learn more? Let’s dive right in.
What is an online business?
An online business is a business that you operate fully online. There’s no physical location. All your products and services are sold through your website.
But why are online businesses so popular nowadays?
Great question. There are several reasons why. One of the main ones is that people want to be their own boss (60.87% say so). And 47.64% are fed up with corporate life.
Online businesses offer flexibility and freedom. I should know – those are the exact reasons I started my business. And I’m glad I did because I could never have grown my corporate career like I’ve grown my internet business.
So, let’s dive into the many other benefits of online business.
What are the benefits of an online business?
What are the advantages of a business online versus an offline business?
An online business comes with a plethora of benefits. Here below, I’ve listed the top 15:
1. You get to enjoy a flexible lifestyle
Online businesses are incredibly flexible. Unlike brick-and-mortar stores, there are no “opening times” because it’s all online – people can buy whenever they want to. If you so wish, you can take the day off in the middle of the week without losing out on sales.
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And an increasing number of people are embracing flexibility. According to WSJ, 95% want flexible working hours. With a business online, that’s possible.
That’s one of the biggest benefits for me, too. I originally started my business because I couldn’t take time off when I needed it – even though my entire family went through different serious illnesses in a short period of time.
Today, I get to spend much more time with my husband who doesn’t have as flexible hours as I do. We wouldn’t see each other nearly as much if it wasn’t for my business.
Note, though, you can run a business to support your life… Or the other way around. It’s easy to overwork when you’re a business owner (and let’s face it, when you’re starting out, you probably do need to put in the hours). But if you build a sustainable business, you’ll create more time for yourself and make more money than what’s possible in a conventional corporate career.
2. You can build it from anywhere
Another BIG benefit in comparison to physical stores is that you’re location independent. Your business is built on the internet, so you don’t need to worry about having a physical store, warehouses, or commuting to meetings.
You can literally run a multi-seven-figure business from home (or a more tropical place). That’s what I do. And when I’m traveling, I’ll hop on client or team calls from my hotel room.
3. You have low operating costs
A brick-and-mortar business requires you to pay rent upfront, maybe get furniture, those types of things.
But online businesses have far lower operating costs. You don’t need a cleaner to clean your facilities, manage office space, and so on.
That said, your operating costs depend on your business model. An ecommerce store requires inventory. And if you build your business solely on paid advertising, those are going to eat up your profit, too.
Ultimately, you’ll incur costs no matter what type of online business you start. Some of the most common operating costs are:
- Website costs
- Software costs
- Legal fees
- Marketing costs
4. You have low startup costs
An online business is also far cheaper to start. You don’t need to make big investments if you choose your business model wisely.
If you’re planning on starting an ecommerce store, a software business, or an online marketplace, you will likely need to invest more to buy inventory, develop your software, or build a marketplace website.
According to Shopify, small business owners spend an average of $40,000 in their first full year of business. But a big chunk of this figure comes from costs like inventory and manufacturing (31.6%) and shipping (8.7%).
A far better alternative for most new business owners is to start out as online service providers. You can sell your existing skills as a coach or consultant.
Why is this a better alternative? Because it can help you build your business so much faster and with less risk. You don’t need to invest in inventory or shipping.
Or even a website! That’s right. You don’t need a website because, in the beginning, you can use your LinkedIn profile as “proof” of your expertise.
In this article, I talk more about starting a coaching business.
5. It’s relatively easy to scale
One of the biggest drawbacks of a brick-and-mortar location is that you’re bound by that location. You can only grow your business so much. Your business depends on foot traffic and you can’t serve more customers than what your store and staff can handle.
Not so with online businesses. A business online is relatively easy to scale because you have no physical store. You can reach more potential customers regardless of any physical constraints.
That said, just like an offline business, an online business needs more resources the more you scale. You might need more people to handle orders and to do customer support. You might need people to do marketing for you and so on.
But the ease of scaling depends on your business model. An online store is relatively easy to scale but you’ll need more inventory as you go on.
A service/coaching business can’t scale if you’re the only one doing one-on-one coaching. But you can take on coaches who work for you, start group programs, or move to online courses. Online courses, again, are incredibly scalable and profitable because you sell the same digital asset over and over again.
I talk more about scaling in this short video:
6. You have access to a global market
A significant benefit of starting an online business?
That’s right, all the eight billion people on this planet. Your business can reach the entire world in an instant. Fun fact: Global trade is worth $25.8 trillion.
Contrast that to traditional stores. You’re limited by your geographical boundaries; you’ll need to move from city to city and country to country to reach a worldwide audience. One location can only reach a local audience.
This goes hand in hand with scalability. Thanks to having access to a global audience, small businesses can expand relatively fast.
Of course, global scale means that you need to account for extra costs and adjustments. An online store needs to account for international shipping costs and if you sell services, you might need to deliver your services in other time zones.
7. Building a team gets easier
As your online business grows, so does your team. However, something many entrepreneurs struggle with is finding those team members.
A physical store or offline business is limited to hiring people in its vicinity. But as an online business owner, you can tap into a global workforce. This makes it easier and more cost-effective to hire.
After all, while an offline business located in NYC has to hire someone in NYC (where salaries are often on the higher end), someone with an online business can hire in states with lower salary levels.
In my business, despite it being a multiple seven-figure business, I’m the only full-time person. Everyone else is on a contract basis. Now, this model doesn’t work for all businesses, but it’s essential for what I call a Freedom Business, which is all about freeing up your time and increasing your income.
Why? Because hiring employees comes with a whole slew of other things to think about. You’ll be responsible for your employees and need to manage them to a completely different degree than independent contractors.
8. You have more job security
Think starting an online business is risky?
While, yes, business always comes with risk, starting one is far less risky than it might seem. Take it from someone who is very risk-averse.
That said, you need to think about what type of business you start. If you start an online store, you’re taking on more risk because you need to create and manufacture a product and buy stock.
If you, on the other hand, sell services, you won’t have that same risk because you’re selling something intangible. Of course, this requires you to sell a service you already know.
Ultimately, you might have more security than in your job. After all, you rely on many customers, while employees rely on one employer.
Get the Ultimate Guide
for building a
6-Figure Coaching Business so you can achieve more freedom!
9. It’s easier to automate
A great benefit of online ventures?
You can automate your business with the help of your website and different software tools. When someone comes to your website, they can sign up for your email list and if you have email software set up, you can set up an automated email sequence.
You can have automated webinars, ad campaigns, sales, anything you really need to run your business. Ultimately, these tools free up your time – and you don’t need as many team members as you’d need as a physical vendor.
There are entire businesses that run in a completely automated way. Sure, all types of businesses need some level of management (there are no fully “passive” businesses). But online businesses need far less than their offline counterparts.
10. Marketing is easier and more cost-effective
The online world comes with a great benefit: Online marketing.
You see, digital marketing consists of a wide range of marketing channels with lower marketing costs than traditional, offline channels. Take social media marketing, internet advertising, or search engine optimization – they can really help you tap into a global audience, increase product awareness, and build your venture sustainably.
Contrast digital marketing with an offline strategy. You don’t have a lot of ways to tap into the right audience and you’ll have to advertise in local papers, billboards, radio, and TV.
Now, you should focus on one marketing or advertising strategy when you start out. Don’t try to master all the social media channels or do online advertising while you also tap into content marketing. You’ll just get overwhelmed.
Instead, start with one channel and then expand. I first got started on Facebook and really mastered that platform (groups, ads, posts, livestreams…) before I moved on to other channels such as SEO and YouTube.
11. You can offer far better customer support
Just like the online world can help you automate your processes, it can also help you offer more automated and scalable customer support.
So having support that gets thanks from customers can be a deciding factor for new, potential customers who want to buy from you.
Fortunately, you can support and serve your online customers in several different ways.
You can make it really easy to contact support by offering instant chat. Or create a library of the most asked questions and supporting videos to help people find the answer as fast as possible. Online tools also allow you to send out automated surveys and feedback questionnaires.
12. You can become much more profitable
One benefit offline stores don’t have?
Making money is far easier online. Online selling is just that much more profitable because you don’t have the same costs as offline.
Sure, you need the right business model for this. And you need the right products and services.
For instance, ecommerce is typically not as profitable as services. But if you sell services, you also need to be mindful of who your potential customers are. Are they willing and able to buy your services?
Plus, your marketing channels play a part, too. If you use paid advertising, your sales costs will usually be higher than if you use an organic source, like SEO.
13. You can pivot and adapt faster
One of the biggest advantages?
You can quickly pivot and adapt.
This applies to the starting phase when you’re trying to find your idea. But also later on, when your market changes and evolves.
Let me explain:
When you’re working on finding an idea, you need to find one with customer demand. So you might need to test a few things to find the right target audience.
That’s what I had to do. I went through a few ideas before I found the one that would work for my first venture, a digital advertising consulting business.
Or, if you see a sales drop because of market changes, it might be time to pivot.
Online, it’s easier to switch from one thing to the other – especially if you have a business model that supports this. As it comes with little risk, a service-based business can help you do just that.
14. You can get paid more flexibly
Online selling makes it much easier to get paid. You can receive your money from your online sales using various payment options on your website like PayPal, Stripe, and credit card payments.
Accepting money through different payment options makes the entire process easier, which might increase sales by a significant amount. Plus, transaction costs tend to be lower, too.
15. It’s easier to manage
Finally, an online website is far easier to manage than an offline store. You have less paperwork and don’t need to worry about a lot of the things that go into an offline store.
For instance, instead of having to take care of a physical space, you just need to take care of a website. And instead of having to offer services in person or make sure your store has enough products in the inventory, you can take care of all of those things online.
Those are the main benefits of entrepreneurship online. But what are the disadvantages? Let’s take a look.
What are the disadvantages of an online business?
Like with anything else, there are disadvantages to starting an online business.
First, an internet business doesn’t start making money overnight.
Starting one takes real dedication. You need to have (or develop) a thick skin to take rejection and still keep going.
You also need to be clear that you want to use your time on building a business. Are you ready to sacrifice all those hours?
Then, there are disadvantages to specific business models. For instance, an ecommerce store requires a lot of investment.
Fortunately, there are better online businesses out there for new entrepreneurs. Here are my tips on how to choose a business to start:
How to start an online business
How do you start an online business?
First, you need to decide on your business model. Are you starting a service business, such as a coaching business?
Or an online store that sells physical products?
You need an idea – but this can be far simpler than you might think. You see, you can start selling a service based on a skill you already have. That way, you can get started right away and sell a high-profit service.
Last, you need customers. Some great places to build early traction and find your first potential customer are podcasts (get interviewed as a guest), your network, or social media platforms.
In this quick video, I share the three things you need for an internet business:
Over to you!
There you have it! Now you know what the numerous benefits of an online business are.
Online businesses are one of the best business models out there.
Now, I’d love to hear from you:
Why do you want to start a business?
Let me know in the comment below!