Step 2: Choosing a Business Model

Brick-and-Mortar

This is a business with a classic physical location outside of the home. It involves a dedicated facility - whether retail, wholesale, service or manufacturing.

Upside

• Gives you an opportunity to work face-to-face with people and become more involved in your community.
• A physical location may attract walk-in traffic to supplement traffic you gain through marketing efforts, depending on your type of business.
• Gives you a dedicated space to go to work each day and become mentally and physically immersed in running your business.

Downside

• Higher risk and startup costs (build-out costs to set up your location, lease/purchase costs)
• Requires a full-time commitment upfront to get the facility ready for business, as well as to hire personnel to staff it.
• If your concept is retail-oriented, you must acquire inventory to merchandize your store.

e-Commerce

Upside

• As with a home-based business, this is a lower risk, lower cost business to start. You don’t necessarily need lots of personnel, inventory and facilities.
• You can choose to do it full-time or part-time.
• Easily scaleable – you can make your e-commerce business as big or small as you’d like to suit existing commitments, such as parenthood and a day job.
• You can tap into a national, or even global, customer base through the internet.

Downside

• As with a brick-and-mortar store, shipping, inventory management, and credit card processing can all become headaches if you don’t do them right, particularly if you are a one-person show.
• Over 800 million people access the internet globally, but it’s a challenge to a) get that traffic to come to your site and b) convert them into a customer confident enough to make a purchase.