Online Business vs. Offline Business, Which One to Opt?


The novel Coronavirus ruined the world’s fragile economies, but it has also devastated some of the gigantic economies, including the UK. Many businesses in the country, mostly those offline, were shut after the government issued strict lockdown guidelines.

The worst seems to be getting over now as lockdown is being lifted and businesses have been picking up to recover the losses they faced last year.

Many entrepreneurs in the UK are starting afresh. They are in a dilemma to launch their new business in the brick and mortar way or to go completely digital or to do both to get the best of both worlds. This blog will help you figure this out. Read along

There are direct lenders in the UK offering loans for the unemployed to start their business from scratch. These are no guarantor unsecured loans for which the borrower does not have to pledge any asset as collateral against the loan.

Also, the borrower does not have to produce any guarantor to represent him to be eligible for the loan. These loans are also devoid of any restricted covenants put forth by the lender, restricting the withdrawal and spending of the loan amount.

Let’s get to know the nitty-gritty of the two diverse business models of offline versus online businesses on some critical parameters for a better understanding. Here it goes:-

  • Cost of Doing Business

This is no surprise that an online business will beat an offline business when compared on cost-benefit parameters. Setting up a new business online requires a website predominantly to go live and maintained for bugs.

On the flip side, an offline business requires premises, staff, salesforce, and a whole lot of other stuff. The cost structure is on the higher side in an offline business as you need to enhance your visibi and communicate the value proposition.

  • Advertising & Marketing Expenses

There are significant differences in marketing and advertising of an online business versus its offline counterpart. One has to look for the right keywords in the online industry and buy them in the search engine optimization efforts. Other tools are blogs, digital media campaigns, articles, paid advertisements on social media channels etc.

Companies these days have been increasing their social media marketing budget and spending heavily on digital marketing. On the other hand, in an offline business, the advertising is via billboards, magazine and newspaper advertisements, television ads, marketing campaigns etc. This advertising model is limited to a specific geography and thus has limited reach compared to online advertising.

Be it any business form you choose, and you can apply for guaranteed loans from direct lenders to fund your marketing campaigns.

  • Reach

An offline business has a limited reach and is usually restricted to a city, state or a country for that matter unless it is an offline multi-national business having global presence. Thus, it becomes difficult to reach out to potential customers living in a different continent, and your business loses out on humongous sales opportunities.

However, in an online business, you can cater to customers from anywhere in the world and sell your products and services to them. Almost all the countries and people today are connected in the world via the internet, giving impetus to these businesses.

  • Entry Barriers

The simple rationale in the business is that the more difficult it is to enter, the fewer entrepreneurs will enter it. Here, the benefit is to existing offline firms who have established their business for many years. This is because you have your own set of customers; your competitors have their customers, the prices are determined to boost healthy rivalry.

Now, it would be impossible for new players to enter this territory and eat into your market share. If you plan to start your new offline business, make sure to do thorough market research about the market and the existing players. Then, communicate your USP and lure customers into buying from you over existing offline businesses.

On the flipside, entering into a new online business is not usually difficult. Today, many websites offer the same set of products and services to the same group of customers. Monopoly or duopoly is something unheard of in any online business in any part of the world.

  • Operational Hours

It is usually operational in the daytime and closes before sunset or during sunset in an offline business. There are certain exceptions here like 24*7 stores or seven-eleven stores etc., but predominantly an offline business operates for a limited number of hours in a week.

However, this situation is precisely the opposite with online businesses as they are active and remain operational 365 days a year. You can check-in to any e-commerce website or any business’s website to search for the products and services you are looking for.

Your customers can place their order at any time of the day. However, there is another side to it, as well. Your online customers now want you to be present at all times they need you. It means a separate and dedicated team meant for customers’ query resolution should be available on chat and call 24*7*365 to assist your customers from any and every part of the world.

This would require you to hire a customer support team and impart the basic skills to them apart from the necessary infrastructure.

  • Trust Factor

Trust is of paramount importance in every business transaction between the buyer and the seller.

No matter how much we boast about being online and shopping on the internet and paying online, the fact is, there is a big chunk of people who still are apprehensive of shopping online.

This could be due to no touch and feel of merchandize before purchasing, scam websites, lack of online presence, sharing their card details during an online transaction, apprehension in money refund if the order is returned etc. However, in an offline business, customers can try the merchandise and check for the size and fit.

Thus, this is one parameter where an offline business would outplay its online counterpart.


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