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Internet vs. Offline Business Ownership

Keller Hawthorne | April 18, 2009 | 2 Comments
Why Make Your Living Online

Road SignsThe truth is no matter which choice you make – owning an online or offline business – the joy of working for yourself is what you’re truly after, right? Making yourself money (not your boss), choosing your work hours and maybe even leaving behind a legacy are just some of the features of being able to work for yourself. And yes, these features can be experienced with both forms of business ownership, but an online business does have major advantages over offline work. But, before we discover why an online business may be much preferred over offline, let’s get clear on what online and offline means.

What’s an Offline Business?

When I refer to a business as “offline,” I am referring to any company that does NOT make the majority of its revenue on the Internet. Examples include brick and mortar stores that rely on foot traffic like grocery stores, law practices, medical facilities, plumbers, etc. Now each of these types of companies could and SHOULD market their businesses online, but their livelihoods do not depend on revenue generated from the Internet. If their websites happened to shut down, they might see a slight loss in revenue, but their business models would remain unchanged.

What’s an Online Business?

When I refer to a business as “online,” I am referring to any company that DOES make the majority of its revenue on the Internet. Examples include,, YouTube, MySpace, etc. Each of these companies may advertise through offline channels (billboards, postcards, business cards, television commercials), but their success depends on their website. Their websites act as a greeter, salesperson, cashier, customer service representative and more. Without their websites, their entire business model would have to be restructured.

So now we understand the differences, right? Good. Now we can discuss several reasons why an Internet business might be the preferred option for a small business owner.

1. An Internet Business Does NOT Require Leasing/Renting Space

You may find a way to work offline from home, but normally most offline businesses require some sort of commercial space. That space usually accommodates a brick and mortar store, office, or warehouse. Online businesses don’t require any commercial space. All you need is a computer! You can work from home, at a friend’s house or in the bath tub if you want (I don’t suggest working in the tub – electric shock will not help grow your business). Wherever there is an Internet connection; there is an office for your online business.

2. An Internet Business Does NOT Require a Bunch of Permits

Yes, there still are forms required for an online business (business license, seller’s permit, home based permit, etc), but that’s about it! With an online business, you can avoid zoning and land use permits, health department permits, fire department permits, etc. Since you’re working from home and won’t have customers/clients on your premises, none of those permits apply to you. I discuss permits in more depth in later sections. Please note, if you plan to sell tobacco, alcohol, medical services, investment advice, etc, you may be required to obtain special permits.

3. An Internet Business Does NOT Require Employees

Your Internet business may become so successful that you will need to hire employees in the future, but normally you can start and grow your online business all by yourself. Offline businesses often rely on several employees performing specific activities (greeting or checking out customers, cleaning tables, answering phone calls). If you’re lucky, you may have friends or family that can help; otherwise, you will have to incur large start-up costs in order to hire people. With an online business, your website acts as your employee and, if you learn to manage it correctly, it will work very hard for you (which means more time spent with your family!). This brings us to our next point.

4. An Internet Business Does NOT Require Long Work Hours

One of the main features of running an online business is having more time to NOT work. It’s not only possible, it’s usually the goal of an online business owner. You can create an Internet business that requires only a few hours of work each day. Is this guaranteed? No. No matter what you hear from the “get rich quick” schemers, less work and more money is not guaranteed. Why? Because it ends up being a choice. Some business owners set up online businesses that require more time once they become successful (more time with customers, order processing, networking). Others set their businesses up in a way that enables them to invest less and less time in the future. The choice is yours. Don’t worry, I explain how and why a business will require more and more time from you in the future in later sections.

5. An Internet Business Does NOT Require a Huge Investment (I saved the best for last)

When you first thought about opening your own company, did you wonder how much it would cost you? How about wondering if you would have to (or even could) get a small business loan? This is probably one of the biggest reasons people choose not to open their own business. Credit checks, paperwork, grants, paperwork, loan officers, more paperwork – doesn’t sound like fun. But, it’s unfortunately necessary for many small business owners. If you choose to open a brick and mortar store, you will have to invest in inventory. If you choose to lease commercial space, you will be required to pay the first and last months’ rent. And, if you expect to have any time for yourself, you will need to invest in employees. Thank goodness there’s the Internet! Since you won’t be investing in inventory (even if you sell products online), you will work from home and you’ll be able to do the work by yourself, you get to avoid ALL of those costs! But, don’t get me wrong. There are start-up costs (discussed in detail in a later section), but they are MINIMAL. You will not need a small business loan.

These are just some of the major advantages to opening an online business. The Internet has provided us with a solid foundation to become successful small business owners. I highly suggest you take advantage!

What are some of the advantages you’ve found from working online?

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