Entrepreneurs are a rare breed of individuals who are
constantly exploring new business opportunities. Some seek out new
opportunities on their own while others are constantly being pitched new ideas.
The majority of opportunities, no matter how good they might
sound, end up being a complete money-sucking nightmare due to expensive
overhead, slow scalability and low margins. Online businesses, however, can be
very appealing because they don’t have the traditional hurdles that most new
ventures face. The following are four reasons why online businesses are the
best investment entrepreneurs can make.
1. Offers incredible scalability
Not every single online business is going to automatically
morph into a huge success with rapid exponential growth. Many entrepreneurs
start an online business thinking customers are automatically going to find
them and sales will pour in because they have a small footprint on the
Internet. They think that a few tweets and some Facebook posts are all it will
take to snowball an online business into a virtual ATM machine.
Scaling any business is not easy, whether it is a
brick-and-mortar location or an online business, but an online business has
advantages. For instance, a brick-and-mortar retail store has a defined
audience, typically a radius from the business location. An online business
isn’t restricted by this and can market to a worldwide audience.
Once a successful marketing and advertising strategy is
identified an online business can simply open up its target and increase budget
to grow very fast.
2. Provides limitless freedom
Many entrepreneurs are drawn to online businesses because of
the freedom they offer. Modern technology, laptops, tablets, business apps and
VOIP communication systems are just some of the tools that allow businesses to
be operated from any location. Next time you are in a Starbucks take a look
around -- I guarantee someone is working on their online business or startup
while connected to wifi and sipping their favorite coffee.
Not being tied to a particular location or desk from nine to
five can be very empowering. Some entrepreneurs don’t know how to balance the
freedom and fail miserably, while others use the freedom as motivation to work
even harder. Don’t mistake freedom for time to slack off. True entrepreneurs
respect the freedom and understand that the hard work is well worth the ability
to spend more time with their families and partake in activities that most miss
out on because they are part of the nine to five grind.
3. Low overhead and high margins
An online business will often allow you to eliminate some of
the huge costs associated with an offline business. Not only can you eliminate
things such as pricey office or retail space and long-term lease commitments,
but you can also eliminate having to tie up your money in stocking inventory. A
drop-shipping agreement with the manufacturer or a manufacture-to-order
arrangement can greatly reduce your financial-risk and will allow you to
maintain more consistent margins with less upfront cost.
Imagine if you had a business that sold hats and you carried
five variations: red, blue, green, yellow and orange. In a physical
brick-and-mortar location you would need to keep all of the variations in stock
because you don’t know what hat the people walking through your door are coming
to buy. If the yellow hats don’t sell you are forced to discount them and take
a loss. Selling the same hats via drop-shipping would mean you won’t be left
holding unsold merchandise that you have already paid for.
4. Access to a worldwide market
The beautiful thing about an online business is the ability
to run it 24/7 without boundaries. There are no geographical boundaries and
there are no specific hours of operation -- an online business can produce
revenue around the clock, even while you sleep.
With a well thought-out social media plan, search-engine
optimization and paid media strategies, an online business can thrive. You have
access to the entire world right at your fingertips. The luxury of being able
to target specific states, regions and countries gives an upper hand to