Advantages and disadvantages of online business

March 26th, 2007

Internet business Advantages

  • Can be very cheap start up costs (domain $8, hosting $10) when compared to other business such as owning a shop, for example a pizza takeaway has to buy ovens, ingredients etc..
  • You can run your business from anywhere
  • Low overheads (hosting and maybe staff costs)
  • The internet is still a open market, lots of opportunities for new business models exist.
  • If you get it right you can have super fast growth. For example Youtube was only started in Feb 2005 and was sold for $1.65 billion in October 2006. It only took them 21 months to grow to be worth 1.65 billion which is amazing.

Internet business disadvantages

  • Low barriers to entry which means that it is easy for someone to set up a website and compete with you
  • Business models can easily be copied, look at youtube and how many copys of their site exist.
  • Can take a bit of time to train yourself, for example if you were to start a sandwich shop you can pretty much start making sandwiches without much trouble whereas to make a  website you need a bit of knowledge and skill
  • Spam – you can spend a lot of your time dealing with spam emails and sales people telephoning you trying to sell you directory listings.
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Entry Filed under: Internet business

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