Pros and Cons of Taking an Online Business to a Brick and Mortar Location

by Guest Author on January 25, 2013

Ready to move your online business to a brick and mortar business? It may seem like a logical next step in your small business plan, but there are pros and cons to moving an online business to a brick and mortar business. Here we lay out the pros and cons of each to help you decide if it’s the right move for your company.

 

 

Pros

Face-to-Face Time- Online businesses give entrepreneurs the opportunity to reach a very wide variety of customers from all over the world. However, there’s nothing like looking a customer in the eye. A brick and mortar store can let small business owners have face-to-face time with customers, and having customers in the store can help employees upsell and offer suggestions to increase the sale. In a brick and mortar store, customers can see the products in full detail, check the dimensions, feel textures and get a better idea of the quality of a product- an important part of buying that is missing in a virtual store.

Getting local- A brick and mortar store can help entrepreneurs get involved in the local community, attract local customers and take advantage of foot or drive-by traffic. Being a part of the community can build support, trust and credibility for customers and raise awareness of a business through word-of-mouth. Running promotions and events is also much easier in a brick and mortar store, and allows the business owner to establish relationships with other local businesses. A company who invests a substantial amount of money into the infrastructure of a brick and mortar business may also be viewed as more credible.

Instant gratification- Even with quick and secure shipping, online shopping is often not fast enough! Customers who want instant gratification definitely benefit from a brick and mortar store. Local artisans, stores that sell perishable goods and brick and mortar stores that have small “splurge” purchases can all benefit from customers’ desire for instant gratification.

Cons

Higher costs- The start-up  and overhead costs of a brick and mortar business are much higher than an online business. Online, a business owner will need to pay for hosting, e-commerce solutions and regular URL renewal. Brick and mortar store start-up and overhead costs include leasing a space, business insurance, taxes, utility bills and more labor costs. Because many online businesses can run effectively with one or two employees, employee costs for a brick and mortar building will be substantially higher- especially if the entrepreneur offers benefits to employees.

Less time at home, more time in the store- Many entrepreneurs are interested in starting their own business because they are tired of the 9 to 5 regular business grind. Online businesses are great because they allow small business owners to work from home, allowing them to spend more time with their families. With a brick and mortar store, business owners will be spending much more than the usual 8 hours. Even with capable staff members assisting with the day-to-day routine of a brick and mortar store, business owners will want to be hands-on with his or her business, especially during the first year of business.

Location, location, location- One of the most important elements of a brick and mortar store is the location. A great location can mean a successful store and an out-of-the-way location can mean a quick demise for a small business. There are many factors for location: demographics, rent costs, traffic. Brick and mortar store owners will have to factor other competitors into the location; there shouldn’t be other similar stores close by. Customers don’t like stressing about parking or struggling to access a store, so brick and mortar store owners should find a location with ample parking close to the store and near major roads or intersections.

About the Author: Jen D’Angelo is a small business professional who writes about solutions for entrepreneurs. You can find her consulting for real estate agencies in the Chicago suburbs.

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