If you have an entrepreneurial mindset, there are countless types of business that you could start and many different business models to follow. Although traditional brick-and-mortar businesses are certainly an option, there are several reasons why owning an online business is very enticing.
Let’s look at five reasons that might convince you that an online business is ideal for you.
Running an online business offers much more flexibility, as compared to a tradition local business. Of course, the specifics will depend on factors like the business model that you follow and the size of your business, but in general, online business offers a great deal of flexibility over things like when and where you work.
Most online entrepreneurs are able to set their own hours and work when it’s convenient for them. Even if you’re working the same number of hours, being able to choose when you work those hours can be a huge perk.
Over the years, we’ve seen an increase in digital nomads that travel and work at the same time. A study conducted by MBO Partners found that 4.8 million independent workers consider themselves digital nomads and another 17 million aspire to be digital nomads (source).
Not all digital nomads are entrepreneurs, but many of them earn a living by owning an online business or freelancing. Their work provides the ultimate flexibility.
2. Low Overhead
Some types of online businesses have very low overhead and extremely low start-up costs. For example, you could start a blog with less than $ 100, which you would use to register a domain name and pay for web hosting. Blogging isn’t the only option either. There are many types of online businesses that don’t require much of an investment.
On the other hand, most traditional businesses will require a significant investment. Interested in starting a restaurant? You’ll have huge expenses for things like ovens, furniture, decor, menus, marketing, dishes, employee wages, insurance, and more.
Even after the business has been launched, the overhead for running an online business is typically very low. I’ve run my own online business for more than 11 years and aside from some modest expenses, most of what I make is profit. Compare that to my friend who owns a landscaping business with about 50 employees and millions of dollars of trucks and equipment. Although he is very successful, most of his net worth is tied up in the business.
This is a critical factor that doesn’t always get enough attention. As an online business owner, you’ll have an easier time getting the cash out of your business rather than struggling to have enough capital to continue. This can make a huge difference in your liquid net worth as you’re able to invest your money however you see fit, rather than always having so much tied up in the business.
3. Exponential Reach
Unlike a local business, an online business allows you to reach customers all around the world, even as a small operation. A one-person business can leverage the internet to have customers spread out all over the place.
The difference can be evident in what is required for a business to be successful. For example, if you’re really good with crafts, maybe you’ve considered opening a small shop in your hometown where you’d sell things you’ve made. Not only would you have a lot of overhead from renting out a storefront, but your customer base would also be limited to people in your local area. If you’re in a small town, there may not be enough interest or foot traffic to support your store.
But you could create an online business selling the same crafts and reach customers all around the world. You could create your own ecommerce site, sell on a major platform like Etsy, or sell on any of the other sites like Etsy that already have an existing audience of visitors who are looking for handmade, crafty items. You’ll benefit by being able to sell your products to people anywhere.
4. Lucrative Exit
While it’s certainly possible to sell a local business, again, you’ll be limited in terms of the potential buyers. The buyer would have to be someone from your local area, or someone who is interested in operating the business in your local area.
There is a huge market for buying and selling online businesses. Many buyers and investors are eager to find quality online businesses that they can acquire, and as an online business owner, you can sell to people who live anywhere in the world.
Selling a business may sound like something that only happens for major corporations, but that’s not the case. There is high demand for small online businesses that sell for $ 10,000 on up to 7 and 8-figure online businesses.
There are even a growing number of brokers that exist to help online business owners find a buyer. Companies like Empire Flippers, Quiet Light Brokerage, FE International, and Upward Exits are all options for business owners who are looking to sell.
5. Potential for Passive Income
“Passive income” is a term that gets thrown around a lot in the world of online business. In reality, much of what is often referred to as passive income is really not so passive at all. However, there are some business models that do offer the potential for true passive income.
One of the most intriguing options right now is to sell apparel via Merch by Amazon. This program allows you to upload designs that will be printed on t-shirts and hoodies. When a customer places an order through Amazon’s website, Amazon will handle everything from printing the item, to fulfilling the order, to customer service and returns. If you have several designs that sell on a frequent basis, they can make money for you with virtually no effort on your part.
While there are countless options for entrepreneurs, as we’ve covered in this article, the arguments for an online business are quite enticing. Not only will it give you the potential to grow a thriving, profitable business, but you’ll also have the flexibility to enjoy a healthy work-life balance.