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Thread: Online vs Offline businesses?

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    Online vs Offline businesses?

    Following up with the discussion started here:
    http://experienced-people.net/forums...9977#post69977

    The question turned out to be... is it easier to make money online or offline?
    I started my entrepreneurial career two years ago and from my experience has been much easier to establish an offline business (as WordPress developer, well actually it's partially offline) than an online business (buying established websites).
    I started from 0 with both ventures, but in my case I had a big technical background so freelancing is more my cup of tea than internet marketing.


    I wonder how the experience of the experienced people has been

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    Administrator Clinton is a Premium Member
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    It depends, I suppose, on the person and the type of business. If your skills are in app development you'll probably do better online. If your skill is in restoring classic cars ... well, you get the picture
    Find the right business brokers to maximise the value you extract from your business and improve the chances of selling your business.

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    It also depends on how the market for your skills changes. There's much more opportunity now for a writer to have an online business than there was a few years ago. The work is very similar, just different types of "jobs" and often better opportunities.

    But if you're a shop keeper, ie skilled in knowing what to buy and how to sell it, I don't know if you'd find things easier with a B&M or in eCommerce.

    The world of having an online business has changed too. There are a few members here who used to earn a living online and now say it's more difficult than it used to be. Some people are migrating back to making money offline. I agree that it's often more difficult now, but I keep diversifying in the hope of continuing to work online. I wouldn't be able to work in the RW for various reasons.
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    I think the startup costs are definitely lower for an online business. Even if you need to hire a Wordpress developer such as yourself, the cost is pretty much always going to be lower than starting any kind of brick and mortar business. I think one of the key differences after that is getting to profitability. I don't know if I could say it's harder for an online business, but if you're not good at marketing I think it's more likely an online business will never earn a penny whereas a brick and mortar can make money based on location (ie, a retail business placed at a location with lots of foot traffic like a coffee shop at the entrance to a busy commuter rail station).

    Along the same lines, the expenses of keeping a business going would be lower for an online business. Compare things like paying for rent (which around where I live is at least in the thousands if not tens of thousands a month) versus a web server (which for a small online business could range from ten bucks a month for a cheap shared hosting account to a few hundred for a decent managed server). Online business typically uses contract labor often from overseas where brick and mortar uses payroll workers with benefits and are almost always higher paid than the type of freelance labor you use online.

    Where it gets interesting, in my opinion anyway, is comparing buying a web business with buying a brick and mortar. I've quite a bit of experience with buying online business (small ones at least, my deals are almost all in the $10,000 to $100,000 range), but none in the brick and mortar. I've been looking for a few months at brick and mortar businesses in my area. Unfortunately it seems like almost all the businesses for sale are c stores or pizza places, and I'm just not interested, but in looking at the deals available I've noticed that brick and mortar business sell at lower multiples while at the same time brick and mortar businesses account for many expenses that an online business for sale won't (like labor costs).
    Last edited by Kay; 17 April 2014 at 8:23 am. Reason: Promoted to front page article

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    In many ways online is a lot easier now. For example, many things can be outsourced. Costs for storage and data transfer have plummeted. The market has increased in size creating new opportunities which didn't exist before. Payment systems have improved.
    Find the right business brokers to maximise the value you extract from your business and improve the chances of selling your business.

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    Quote Originally Posted by petertdavis View Post
    I don't know if I could say it's harder for an online business, but if you're not good at marketing I think it's more likely an online business will never earn a penny whereas a brick and mortar can make money based on location (ie, a retail business placed at a location with lots of foot traffic like a coffee shop at the entrance to a busy commuter rail station).
    That's very interesting Peter.

    I came from a family where I had examples of offline businesses: a coffee shop, a self-employed electrician, an architect studio.... they run those business all their lives without knowing much of marketing, conversions, customer acquisition etc.
    I don't say they were not good at it, but I'm pretty sure they knew much less (or maybe they just followed their instint instead of reading from our beloved gurus).

    And if I look around, I see plenty of successful traditional businesses run by people that are not business genius or marketing wiz.

    Is marketing the most important skill in order to make money online?

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    Is marketing the most important skill in order to make money online?
    Yes, definitely. You don't need a good product. Heck, you don't even need a product which works. Most IMers don't, which is why they can keep bringing out new and improved versions.

    I used to think of marketing as being quite a "fluffy" subject. At uni, those of us doing "proper" subjects, such as accountancy, used to look down on the marketeers. Ain't hindsight a great thing? It's very easy to count the beans when you haven't got any and those skilled at marketing can afford to pay for accountants and other professionals who do real jobs. LOL. I really must make more effort to learn more about marketing.

    Y'know, I'm very tempted to create a forum on EP for marketing. There are already plenty of discussions about it but they're buried in with SEO and in other forums. Marketing was a bit of a dirty word but I think we should bring it out in the open and tackle it head on.
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    I agree with Kay. I rank a marketing plan and marketing expertise right up there with having enough capital to begin with. The fact is, whether offline or online, your success will depend on your marketing. Most things in business you can buy. Marketing is no exception. And there are always exceptions, but NO ONE can market your business better than you. No one knows more about it, what matters, who their customers are, what they are thinking, than the person in the trenches day to day. For most small businesses, online or off, that means the owner. If the owner's time isn't spent marketing his business every single day, he's not doing his job.

    It's not about online vs. offline. In business it is about success, in however way you define it. Marketing is the vehicle which you drive to the bank or bankruptcy. In a startup, 75% of your time and money should be in marketing. Everything else is grunt work.

    My opinion only.

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