No matter how beautifully financial bloggers and specialized sites describe to you all the advantages of becoming an entrepreneur, there are many nuances, regardless of the business model you choose. Moreover, you will discover many of these nuances only after starting a business, in the process of its development.
And this is not due to a lack of information on the network, and not because experienced entrepreneurs hide something from you, but for the simple reason that everyone, one way or another, will have different start conditions, including age, experience, skills. , psychological stability, the presence of useful acquaintances and, of course, the size of the initial capital.
However, the continuous solution of any problems is an integral part of most types of business. Especially if there is a desire to expand and increase the turnover of your company.
But enough of the preface.
Are there any advantages of online entrepreneurship over companies in the physical world? Definitely yes. Are there any disadvantages? Of course. But let’s start with the classic business.
Shops, catering, production, services
In general, if money is needed urgently, then there is nothing easier than the service sector, because payment can be made immediately. And even cash, which may be relevant. You can start a business alone and subsequently, with the growth of the client base, attract assistants, or you can immediately take on the role of an intermediary organizer. There are so many options for services that we won’t even start listing them.
An interesting feature of the service sector is that even with seemingly very high competition, no one will be left without work. Even if soon all services will be performed by robots, you can serve robots.
With shops and own production, everything is clear, it can be both profitable and very ruinous. It all depends on the time, place, demand and, most importantly, on the initial capital. At the same time, there is no guarantee that tomorrow you will not be suddenly swallowed up by competition. Many retail stores are constantly closing due to the growing online shopping, hypermarket chains and instant delivery services.
But what is still pulling entrepreneurs to open their own store, cafe or production?
Firstly, a physical enterprise is easier to manage, easier to predict the movement of funds, easier to start generating income (no, not yet profit) from the first day of opening. In addition, a good location eliminates the need for additional advertising for a store or restaurant. And finally, offline business is easier to sell.
Secondly, an entrepreneur does not always organize a business for the sake of business. Often there is personal preference. For example, not everyone will buy a completely profitable and well-established cafe in the city center. Simply because they do not see themselves in this business. While some cozy eateries can constantly balance on the brink of self-sufficiency, but only exist because the owner enjoys working in them, he is quite happy and has no ambitions.
Or, for example, tailoring to order. If this is your vocation and passion, then it is not surprising that you open a sewing workshop.
The great advantage of physical stores is their complete indifference to any technical failures. Yes, the light can go out or the ticket office can break, but these are extremely rare and short-term inconveniences. You are not dependent on a site that went down after an unsuccessful update, on capricious search engine algorithms, on hackers and unsuccessful marketing. You don’t even care about reviews. If they are, then only in a paper complaint book, which no one will ever see.
And, despite the fact that a full-fledged business in the physical world is also full of various troubles and problems that will have to be solved, with a successful and competent organization, you can find peace and tranquility in it, especially if you are doing what you really love. In addition, the rate of return of classic stores is often much higher than that of online stores.
Well, if this is not enough, then no one forbade your business to go online and expand its reach by adding the delivery of your goods from the store or dishes from the restaurant, and thus seriously increasing the resiliency of the enterprise.
Online shopping
Here you need to understand that an online store can have its own warehouse, its own delivery service, and even its own production with a large staff. And some lonely owner of a very similar site may not contact anyone and nothing at all, except for the keyboard of his laptop, being engaged in dropshipping, that is, simply being an intermediary between the buyer and the seller (warehouse).
What are the benefits of the first option? This is the lack of equipped retail space and idle visitors who came to wait out the rain, as well as the ability to serve an almost unlimited number of customers.
Flaws? Well, this is, firstly, a strong dependence on technical means (computer park, reliable software, uninterrupted operation of servers, protection against attacks, etc.). This whole economy must be served by good IT specialists, who are expensive relative to sales consultants.
Second, significant budgets will be continuously allocated to advertising and marketing. And professional marketers also know their worth.
Thirdly, most buyers today, in the absolute majority of cases, at some point before the final choice of a product or a store that sells it, will type in a search engine a phrase that includes the word “reviews”. And so, if you do not have the most positive reputation, then no amount of marketing will increase your sales. This is a particularly difficult situation when goods of own production are sold.
Fourth, there may be many problems with delivery and service. Many online stores have a lower rate of return than offline stores.
What are the benefits of the second option? They lie on the surface. This is the absence of expenses for the maintenance of the whole team with all the equipment, office and warehouse. In addition, there is absolutely no risk of an excess of goods that for some reason cannot be sold.
Tangible advertising costs may still be present, but usually this type of activity is carried out, for example, by former webmasters, for whom it is not a problem to work out the details of search engine optimization, and they themselves can act as a marketer. In addition, you can create a whole network of diverse dropshipping stores in a week to diversify risks and increase future profits.
Flaws? As is often the case, disadvantages follow from advantages. Due to the fact that you cannot control either the quality of the goods, or the availability of it in the warehouse, or the efficiency of delivery, or the level of good manners of the personnel who are in contact with the buyer, then all hope is solely on the supplier.
As a key link, any negative reviews will be collected by your online store, and not by the supplier or manufacturer. And the problems described are quite common. However, if the network of drop sites is large, then this will help offset the loss from various misunderstandings, but working with them will require a lot of attention, time costs, or outsourcing, which you will have to pay for. Of course, hacks are also not excluded.
Perhaps the best thing about dropshipping is the ability to start from scratch, without any budget at all. Yes, it will take a long time if there are no skills, but it will give a valuable, albeit partial, experience of owning an online store without unnecessary risks. And in case of a successful development of events, the profit can be reinvested back and organize your own warehouse and delivery. This is why dropshipping is so attractive.
Online stores are on the border between the physical world and the virtual space. Next comes the real online business.
Online services
This vast field of activity already fully exists only in the virtual world. Except, of course, servers. It is now difficult to come up with something that no one else has come up with before you. But there are proven business models that definitely work.
Obviously, for a solo start, you must be at least a novice developer, or at least have not only a strong interest in programming, but also free time for learning.
The matter is aggravated by the fact that usually good developers are bad businessmen and worst marketers. Therefore, IT professionals are either looking for a team of like-minded people or venture capital. Usually both. But for this you need to have a really promising and well-developed idea.
Blogging
Really attractive idea. You can find many examples online of bloggers earning millions of different currencies. This is true? Yes, absolutely.
How do bloggers make money? Usually these are advertising, affiliate programs and the sale of their own products – e-books, courses, etc.
But what at first glance seems very simple is actually quite complicated. It’s not just a job, it’s a continuous and sometimes very exhausting job. At least the first year or even two. However, so that in the future income (which no one guarantees) does not fall, you still have to work.
You also need to consider that your blog traffic, and therefore income, is almost entirely dependent on search engines. Even if you write impeccably and uniquely, and your initial audience is delighted, this is not a guarantee that Google will bring you closer to the first pages of search results. Although, of course, the chances of this increase.
But let’s take a look at this. There are countless topics on the Internet that people are interested in. However, only a few of them are promising in terms of blogging as a business.
For example, if you have an education in economics, then creating a financial blog or an informational website with an overview of banking products, you can be sure that you are on the right track. This theme is not only extremely popular, but also one of the most profitable on the network (naturally, incredible competition is included in the options package).
On the other hand, no matter how much and interesting you write about ichthyology, making money on it seems very unlikely.
Here it should be noted that for the successful promotion of oneself as a blogger, one specialized education is not enough, life experience is also desirable. And if you have experience in such highly profitable topics, then most likely you have, if not your dream job, then at least a great opportunity to get such a job, receive a guaranteed and, importantly, predictable salary, and also have the opportunity to be promoted. At the same time, you can continuously invest part of your salary in the stock market, and then you would not have remembered any blog.
The reverse situation is when you have neither the relevant knowledge nor experience. In this case, you will have to study and understand all the material first. And although the benefits of acquiring new knowledge are not negotiable, it takes some time, and it still won’t add real experience.
Similarly, it will take time to become familiar with the technical basics required to successfully host, set up, and publish a blog on the web. And then the daily work in the form of writing posts, replies and moderation of comments. If there are comments, of course.
This can definitely be done in retirement, but for a young person, such an investment of their time can be a big problem. If you have work or study, you will have to work on a blog instead of evening rest and on weekends.
Considering that the return will not be visible for a long time even on the horizon, and moreover, there are no guarantees at all that the income will at least cover the cost of hosting, it is not surprising that the vast majority of blogs end up in nothing.
Probably, the colors have thickened somewhat, but it is better to look at things realistically, without excessive optimism. The surest way to create a blog that generates solid income and attracts advertisers is to write about a financially sound topic, simply because you like to write and because that’s what you like to write about. And that’s all.
This is where business calculations should make room for your passion. Only in this case, you will be able to continue to publish posts, despite the lack of visitors, commentators and, moreover, income.
There is another option. Order very good articles from professional authors who are pros in the chosen field. As you understand, good articles are expensive, so this approach will require a tangible budget. If you buy ready-made cheap posts from novice freelancers, then it’s easier not to even start such a blog, since it will be outright garbage not only from the point of view of the visitor, but also from the point of view of search engines.
Very often, novice bloggers, having understood the amount of work and the remoteness of the profit horizon, understand that it is much easier and more reliable to open an online store.
Digital magazine
Online magazines differ from blogs not only in the method of presenting information, but also in the presence of staff. There are always a few authors who follow the accepted rule of writing posts, as well as editors who mostly just drink coffee.
As a rule, there is no commenting function in online magazines. A blog, unlike a magazine, is more personal, more sociable and represents the personality of the author. Accordingly, the manner of writing the material can be absolutely any, and most often, the task of a blogger is to encourage visitors to discuss what is written. The journal does not have such a task. The goal is to provide the most useful thematic content.
Another distinguishing feature of almost all magazines is a thematic news section with analytical reviews. But this is optional.
Blogs and magazines make money in similar ways. Advertisers are an important source of income both there and there. However, magazines usually have a more diverse audience and tend to have a larger reach. Magazines can sponsor specialized exhibitions or, conversely, be informational partners.
However, building an online magazine from scratch is not a good idea for an aspiring online entrepreneur with no experience. In this case, it is better to create a personal blog and, if successful, no one will stop you from reclassifying it into a digital magazine.
Youtubers and others
Like well-known bloggers, some owners of YouTube channels and social media accounts receive unimaginable amounts for advertising.
And these are not even some “stars” with hypertrophied body parts, but quite ordinary people who suddenly began to post their vision of the world and shoot videos about everything that you can imagine.
Perhaps the greatest attraction of this way of earning is that you do not need to have any of your own developments, sites, servers and, accordingly, no costs for their maintenance. Let the owners of these platforms worry about it.
However, what at first glance is a plus, in fact, threatens to turn into a big minus, since it violates an extremely important rule of entrepreneurship, namely: never build your business on someone else’s territory.
I think there is no need to comment here. The situation could be much worse than losing all dropshipping suppliers. There, at least, you will have your online store. And in case of problems with social networks (for example, the most common is a sudden ban due to an algorithm error, complaints from competitors and envious people, as well as manipulation by intruders), you lose everything.
All your followers, like your account, are not really yours. They belong to the owners of the platform.
So, social media is a great channel for expanding a company’s reach and finding new customers, but treating it as a platform for a stand-alone business can be quite risky. All the long work of creating an audience can fail even before the arrival of the first advertiser.
So what to do?
Every entrepreneur has their own vision of the business. But it is always better to look not so much at the future stability of the enterprise as at the possibility of further scaling. Obviously right now I wouldn’t open a grocery store or anything like that.
Cafes and restaurants are very attractive to many, but they have rather low operating profits and too many important nuances. The main common feature that can be seen among the owners of successful restaurants is a great love for what they do. Quite often, the owner of a restaurant and the chef are the same person.
Production includes many options, from a home workshop in the kitchen to a huge factory complex, so it would not be correct to combine it in one word. Nevertheless, the production of any kind of goods is a direct path to huge fortunes.
Naturally, manufactured goods must be in demand and have sales channels, so careful preliminary research is always necessary. If the start of production is successful, and demand exceeds supply, then the issue of scaling is solved quite easily. Moreover, it is possible to find a buyer, sign a supply contract and receive an advance payment even before the start of the production process.
Resale of goods, also known as speculation, is always the fastest way to the first income. Especially online selling, the main advantage of which is a low entry threshold. However, you can start earning income from the service sector even faster. And there, and there, you will need either advertising, or, for the first time, free ad sites, or cold calls.
If you are a developer or a good organizer with a promising idea, then the IT industry can bring you mountains of gold. However, developers most often prefer to work for a good salary and not bother with startups.
You can always blog in parallel with the main activity. Moreover, if the topic of the blog coincides with your business, then it can be an excellent channel for finding new customers and informing them about your company.
Important thoughts
You should always remember that as long as you are the only employee of your company and do all the work yourself, this cannot be called a full-fledged business. You become an entrepreneur only when you start leading, not executing.
Otherwise, you will not be much different from an employee. In addition to the fact that it will add even more tasks, stress and take away all the personal time that is so necessary for relaxation. And far from the fact that it will pay off more than hired work.
Is it necessary, as is often postulated, to follow your passion when building a business? Obviously yes. From my own experience, most of the undertakings would not have been brought even to the level of self-sufficiency, if not for the high interest in the product itself. Often, only the passion for what you do allowed you to ignore serious obstacles and sudden difficulties.
But it may well be that your passion cannot be monetized enough to not need anything else. Sometimes a new passion is found in a completely new business, and sometimes entrepreneurship itself becomes a passion.