Online Business Versus Traditional Business

Want to know the pros and cons of an online business versus traditional business but not quite sure where to go for answers? This is what you must read…



Here’s a startling fact…


There are many pitfalls in business. Let me explain…


You see, so many hopeful people have desires of making it in their own business but then sadly fall flat on their face. I’m sure you know a person or two who have failed in business in one way or another.


But why?


In a nutshell, their profits couldn’t keep up with their business expenses. If a business has gone under it’s likely for that very reason alone. Sure you have business disputes between business partners that can lead to the demise of a business, but for the most part it’s lack of revenue.


I’m sure I’m not telling you anything you didn’t know already. So, when you’re comparing an online business versus a traditional business you’ve got to not only have some criteria in place but you have to address how you plan to deal with cashflow in your business.


Online Business Versus Traditional Business – the Low Down



Here’s the bad news upfront…


If you don’t have in place a clear set of standards when choosing a business, odds are you’re going to make a big mistake the first, second, and even the third time around.


If you’ve had some business failures in the past, I’m sure you can look back now and see where you went wrong.


If you could reduce the odds of picking a losing business and increase the odds of picking a winner, you would wouldn’t you? Well of course.


No matter what kind of business you choose – an online or an offline one, you must pick one that has buyers wanting to buy your product or service.


You may be interested in collecting safety pins, but it doesn’t mean you can start a successful safety pin business (I’m just pulling a category off the top of my head here. I don’t know if there’s a safety pin market or not).


And since cashflow is the name of the game in business because it allows you to recoup your business costs a lot quicker, you’ll want a business where cashflow is going to be less of a problem.


In other words, the longer it takes for you to recoup your ongoing business expenses, the less money you have to expand, buy inventory, pay your creditors, meet payroll, etc… If you have a whole lot of money going out and just a trickle coming in, you’ve got mere months to fix the problem and increase your cashflow before you go under.


Now, you’re probably thinking really hard about that business you thought you would start.


Is it going to work?


How hard will it be to start seeing some positive cashflow?


What are the real monthly costs for running this business?


Those are the hard-hitting questions you need to ask yourself before you pull out your wallet and start a business. Now, let’s breakdown the pros and cons of an online business versus traditional business.


The Pros and Cons of a Traditional Business



When you look around you, all you see are traditional businesses. When we say traditional, that means franchises and mom and pop shops and all else in between.


So, when you’re looking to start this kind of business, there are special things you’ve got to be aware of. Let’s start with the Pros:

Pros of Traditional Businesses

  • Easier to get business loans
  • Franchises give you a proven system (usually)
  • You can co-op advertising with other businesses in your area
  • You can get “foot” traffic from nearby businesses into your store


The Cons of Traditional Businesses

  • The high costs to get started
  • High ongoing business overhead (rent, equipment, insurance, etc.)
  • Dealing with employees (high liability)
  • Franchise and royalty fees in franchises
  • Increase likelihood of cashflow issues


As you can see, a traditional business does have a lot of benefits, but those benefits can be greatly outweighed by the cons if you’re not careful.


Let’s took at an Internet-based business…


The Pros and Cons of an Online Business


Internet-based businesses are quite the flavor right now, but what’s not getting the spotlight are some of the cons you may experience having such a business.


The Cons of an Online Business (home-based online business)

  • May have a harder time getting loans
  • Family and friends may not take you and your business seriously because they see you working from home
  • No physical place to meet clients if completely working from home
  • May run into zoning issues if you have a lot of packages being delivered


The Pros of an Online Business

  • Less overhead expenses which in turn increase cashflow
  • Low start-up costsOnline-Business-Versus-Traditional-Business3
  • No employees to deal with (less liability)
  • No commuting
  • Greater chance of profitability in a shorter amount of time


Now that you know the pros and cons of an online business versus traditional business, where do you stand as of right now?


Are you beginning to see some pitfalls you’ll have to avoid in your new business venture? Anything you would do differently in light of this information?


Online Business Versus Traditional Business – What I Recommend


Having had online and offline businesses, and because I’ve bee online for a bit, I can unequivocally say that an Internet-based businesses have much, much greater benefits than an completely offline business.



In fact, as long as you can reach your buyers online, a traditional business can be greatly enhanced when you add the online aspect to it.


However, it’s more cost effective to start an online business. In the internet-age, you don’t have to pile up massive debt to start and run a business.


Online business versus traditional business – the choice is obvious depending upon how much you want to increase your odds of profitability.


Not sure where to start? Make sure you read the “Reviewed and Recommended” section…



About the Author

Internet marketing geek & on again/off again coffee addict from beautiful southern California who wants to change the world one click at a time.