We live in an age where new technology is constantly supplanting old ways of doing things. This phenomenon has had a largely positive impact on commerce, increasing efficiency and aiding the spread of new information and products. But it has also complicated the choices available to those who are starting a business for the first time.
Many new business owners are wondering: “Is having a traditional brick and mortar store worth the trouble?” To provide some context, and make the decision-making process a bit less agonizing, here are some of the pros and cons of tangible brick institutions versus virtual business models.
Brick and Mortar Stores: The Pros and Cons
- Humans are material beings. Prior to purchasing, many consumers like to be able to physically touch and inspect whatever it is their buying. For a certain set of people, this principle holds true whether they’re buying a car or a dining set. A physical location allows consumers this option.
- A brick and mortar store can serve as proof of legitimacy. There are plenty of fake businesses on the internet set up by scam artists. So consumers will be reassured that they won’t end up getting ripped off when purchasing from an actual, in-the-flesh business.
- Few people stumble upon a website truly at random. With a physical store, there’s the chance to pick up extra business on a walk-in basis. This especially holds true for businesses in highly populated areas.
- Opening a brick and mortar business requires a great amount of overhead, even if it’s set up in a suitable and preexisting building.
- Establishing a physical business requires much research, as location can dictate profits. Even then, it’s something of a gamble. What may have seemed like a good location might not turn out to be, and relocation is expensive.
- Businesses that operate at a physical address are limited in the hours that they can serve customers. After all, if a business has closed for the night, it can’t serve customers.
Virtual Business: Pros and Cons
- If set up correctly, an online business will operate at all hours of the day and night, and there’s no need to hire clerks, security guards, or cleaners. This grants consumers constant access, allowing them to buy whenever they feel truly ready or when the inspiration strikes.
- Although they still involve quite a bit of time and work, online businesses are very inexpensive to start-up.
- A virtual setup allows access to a much wider pool of potential clients. This international clientele pool is even wider than that seen by a brick and mortar business, located in a bustling metropolis.
- Competition in the virtual business sphere is fierce. Instead of competing on a local level, a virtual business has to compete with international competitors right off the bat. Online businesses may be easier to put up, but also easier to knock down.
- A virtual setup can severely limit personal interaction. This can make it more difficult to establish a relationship with customers and create a positive brand identity.
- Unless the budget is already in place to hire an IT staff, setting up a virtual store will require the development of a skill set which is likely new for many would-be entrepreneurs.
Justin blogs about business tips, as well as how to start and market a business on behalf of Kwikkerb, and also provides information on the Kwikkerb business opportunity.