Which model is best for your new business?
Your business idea is really taking off, how exciting!
One of the big decisions you will need to make early in the process is whether your business will be online or offline…or a mix of the two – a hybrid business.
For some of you, it will be clear what business model will work best for your business. For example, a new hairdressing business will likely set up your salon close to its clients. A new café owner will seek a convenient and busy location for their coffee shop.
An online vet coaching business will set up a substantial web presence to find vets all over Australia.
For those entrepreneurs (and this maybe you), where the business model is not so clear, the most important factor to consider is access to your target audience and customer base.
Puzzled over what business model to choose for your business? To get the ball rolling, let’s explore the pros and cons of each business model.
Online Business Model
An online business is any business that sells their goods and services (this includes software as a service, like us, here at Sleek!) entirely on the internet.
What are the pros of an online business model?
What are the cons of an online business model?
Here’s a suggestion – There are plenty of budget-friendly and easy to use ecommerce platforms to help you set-up your online business. Try Shopify, Squarespace, Woo Commerce, or Wix. For larger businesses, there is BigCommerce and Magento.
The hard work is done for you and there are plenty of add-ons like cyber-security to expand the software to suit your online business.
Offline Business Model
An offline or bricks and mortar business is one with a physical shop or office that is open to customers to visit, browse and buy.
Your local greengrocer and the dentist are considered bricks and mortar businesses. Other examples include shopping malls, franchises, and business offices.
What are the pros of an offline business model?
What are the cons of an offline business model?
Here’s a suggestion – when you are first starting out try markets, pop-up stores, renting space in an existing shop or co-op working spaces. The overheads won’t drain your bank account and will give your business a chance to grow!
Hybrid business model
This is the best of both worlds. Where customers can buy from a business online as well as visit a store or office.
We’ve seen some cool names for this business model recently emerge – phygital (a word mash-up of physical and digital), click and mortars, and our favourite, bricks and clicks!
A hybrid model can work for businesses who sell directly to consumers or to other businesses. It will depend entirely on the product or services you are selling and where your customers are.
Remember, that integrating a hybrid business model will see the pros and cons of both an online and offline business models come into play here, so careful consideration is recommended. It might work better to start your business as either an online or bricks and mortar business. Then as your business grows and becomes stronger consider a hybrid business model.
Before we go!
check out the legal requirements for each business model, as they will differ.
For example, an online business must display its terms and conditions on its website for customers to clearly see. There are also strict regulations on handling and protecting the personal data you collect from your visitors and customers.
A bricks and mortar business will have local council regulations to follow such as, zoning, disabled access and the number of bathrooms it must provide. A hospitality business must follow food safety regulations, or if selling alcohol you will need an alcohol licence.
Look closely at your target audience and their preferences for shopping and buying from you – it makes it easier if you consider their needs. Having worked with countless entrepreneurs and business owners, Sleek can direct you in the right direction. Chat to our professionals online now or contact us here.