Brick And Mortar Business Vs. Online Businesses

For a while now I’ve been talking a lot about my personal financial situations but what a lot of you may not know about me is that I own two businesses. The first business is my online business which would be my blog StumbleForward.com and a few other small blogs.

The other business I own is a brick and mortar manufacturing business that makes custom agricultural gating for cattle, hog barns, and a few other things. This business was started by my father in the mid 80’s and in 2009 I took over with my other business partner. Since then we’ve done business in many of the states surrounding Ohio from Indiana, Michigan, Kentucky, and even a few other states such as Texas and Tennessee.

We’ve even done a little international work in Jamaica for an orphanage that raises their own hogs for butchering, but other than that we pretty much work in a more regional area here in Ohio. You can read more about this business here. Their isn’t much to the site since it’s mostly a brochure site but you get the idea.

What’s great about all of this is that I’ve had the opportunity to see how brick and mortar business vary from their online predecessors and I can tell you their are some huge differences and in this article I’m going to share those differences here from my point of view.

Brick and Mortar Businesses

Overhead. To start brick and mortar businesses have a lot more overhead to deal with. On a normal given month I can have $30,000 to $40,000 on just buying steel to make my products. On top of that I also have around $20,000 in payroll to deal with as well.

Those to items alone account for two thirds of all of my overhead. Beyond that I have electric, welding wire, gas for the welders, and even propane to fuel tow motors and heat the shop.

Competitive. Secondly, my business is very competitive. We currently work with two different product distributors and that is all we can handle at this point but when it comes down to it I have to keep my prices low so jobs don’t get under bid by other competitors.

That is probably the toughest part to this whole business is putting out a good bid so I can keep bringing in jobs and this year has been very good, in fact this year alone I will have done gating for 40 to 50 hog barns alone. This doesn’t count all the small odd jobs that come in the door as well.

Intense. Third, running a manufacturing business can be very intense. When it comes down to it I wear many different hats. I have to manage employees, communicate with our distribution channels, contact suppliers, and even deal with more tedious task such as taxes and payroll.

On the upside to this though I am lucky to have a good team to help me out. I have a secretary who manages the books, a truck driver who delivers out products, skilled employees who build our products and most importantly of all a business partner who can help me handle some of the bigger issues at hand.

Defined To One Area. Finally, the last big difference is that I’m stuck to serving one particular area for the most part. As I mentioned earlier we typically only build gates in a regional area around Ohio and in close by states.

However the bigger problem of why we can’t expand beyond this is because we don’t have a big enough facility, and are electric is very limited where we are at. If I were to double my workload I would need to double up on my employees, and build another facility the size of a football field to compete at that level.

When it comes down to it in order to grow a brick and mortar business it takes a lot more of everything to get it there which involves a lot more money to make those things happen.

Online Business

Little Money Involved. When it comes to running a strictly online business the cost to get up and running is very little. I have cost in a domain name, web hosting, and spend a few bucks here and there to buy some stock photos.

What’s great about this is that the money I do earn allows me to reinvest more towards the business to help me do other things. Since I’ve started I’ve been able to hire writers, graphics designers, and even go to a conference.

Your Competitors Are Your Friends. The second thing that I find fairly different compared to my brick and mortar business is that in the online world your competitors are literally all my friends. Since starting my blog I’ve manage to meet a ton of bloggers and get to know quite a few people.

Instead of everyone working for themselves like a brick and mortar business, my online business is more of a community and everyone is working with each other to help everyone else out. For example their isn’t a day that goes by where I’m not tweeting or +1 other peoples content. This core community of people helping people is probably the thing I like most about the online world.

Takes More Effort To Get Started. The third difference is that it’s takes a lot more for an online business to get off the ground. A good example is this very blog, it took me over 5 years to get what I have right now going on.

With a brick and mortar business it can be similar but you don’t have to do as much work to convince people to buy from you because in the online world everything is based on trust. The more you trust someone the more likely they will buy from you. A good example of this is Amazon. When they first started a lot of people were scared to even buy stuff online and today they sell millions of dollars in product each and every day.

Your Global. Finally, the online world allows you to go global instantly. Since I’ve started my blog in 2008 I’ve have had people visit my site from all over the world from the US to Australia, the UK, and even places like China and Russia which is pretty cool when you think about it.

I can’t name any type of brick and mortar business that can go global as fast as online businesses. You can literally put up a website tomorrow and be selling to people all over the world.

What Are Your Thoughts…

So what are your thoughts? Which do you feel is a better business to have, a brick and mortar business or an online business? Is their anything else that you think makes brick and mortar businesses different from online businesses?