Home Based Business vs Online Business (Part 1)

There are two types of home based businesses. One is the traditional one with an office at your home and the other is a virtual office – your website. Both require customers to keep it going and both require you to do an initial research to see which type of business you should open. Without researching both, the traditional and online, businesses are destined to fail. Let us first look at the traditional home based business.

Traditional Home Based Business

These include all kinds of small cottage industries that can be run with a few people usually family members. Professional services (e.g. photography, print & design, ladies accessories, maintenance & repair services, etc), network marketing (MLM) and food & bakery contribute to the majority of traditional home based business.

Some of these had go on to become local brands and they survive well with regular streams of customers. Therefore, a traditional home based business cannot be booted out for good…. at least not now or any near future. They serve a niche market of their own.

Although many traditional home based businesses have been successful, these ventures are quite risky to begin with. Here are some of their cons:

1) The delivery of a physical product or personal services can be very much limited by time and space.

2) Promotion and marketing of your product or services are also limited to a smaller local market.

3) When business is brisk, you struggle to meet production but when business is slow, you struggle to keep it going.

A traditional home based business require an office, you spend money on decorating that office, even if it is a home. You would require infrastructure like telephone, fax machine, printer and stationary supplies. A traditional home based business may take time to set up.

A point to remember, a traditional home based business requires higher recurring expense when compared to an online home based business.

With a traditional home based business, you need to think about hiring staff and worry about attrition. Then there is the fear of losing your traditional home based business to natural calamities like hurricanes, storms or floods. You would have keep inventory which could cause you losses.

All the above are points to ponder when you are thinking of starting a traditional home based business.

Online Home Based Business

When compared to a traditional home based business, starting an online home based business is much faster. Once you have your website running, you are in business. You do not need to wait for the stationary or the office to get ready.

This does not mean that running an online home business is a piece of cake. You need to invest time to do proper research, as which type of online home based business is suitable for you. The internet is an extremely good resource for research.

In an online home based business you set your own timings and your website announces to world what are your products or services. You do not need to spend as much on advertising as you would do with a traditional home based business. The internet gives you an edge. You reach a much large audience across the globe. This is not possible with a traditional home based business where you end up catering to the immediate community. And once your online home based business is automated, it practically runs by itself.

Examples of Successful Online Businesses


eBay was one that did not go under when the dot com bubble burst. eBay transformed itself from a garage sale and flea market site into a genuine e-commerce site. Today, eBay has over 29 million registered users selling anything from antiques to jewelry. eBay is made online transaction safe and secure and it allows buyers and sellers to post their comments online. You can check these comments and then decide whether you want to do business with a person / company.


Amazon.com treats it customers like extremely. It tracks the customers’ tastes so that using Amazon.com becomes a truly rewarding experience. It has outstanding customer service with special discount services on books. Amazon.com excels in one-to-one marketing making each customer feel special.

In the next part of this series, I will talk to you about some good online opportunities that are there just waiting for you to encash them!

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