Who would have thought that in the aftermath of the “dot-com” bubble that infamously collapsed on March 10, 2000, entrepreneurs would find themselves rushing back into the Internet in just a little over a decade as purveyors of online business?

Although the Internet had been around before the bubble period of 1997 to 2000, it has remained to be largely unexplored territory for businesses. The infrastructure and capabilities were not at the necessary level to support the increase in scale.

Since then, digital technology has undergone its own Industrial Revolution; it has influenced the way we live our lives and how business is run. The growth of Internet-based businesses is not driven by investments in the future of technology because technology has already arrived in the present.

The demand is driven out of need and as a natural response to the evolution of technology and the Internet.

10 Reasons Why Online Business is the Future of Commerce

1. We are now in the NEW ECONOMY

The world changed after the Cold War, but a transformation was experienced in the new millennium. We were shaken by the events that changed the course of history: 9/11, the Iraq Invasion, and the 2008 economic meltdown. Businesses navigate through a sea of economic turbulence where efficiency becomes crucial to survival.

In the United States, many large corporations integrate telecommuters or work-at-home personnel in their business development strategies.

A study by CTrip showed that telecommuters are 13% more productive than regular office staff, and cost savings of US$1,900 per employee per month have been generated. There is a shift in corporate strategy to streamline costs through telecommuters because the quality of work is not compromised.

By starting your own online business, it will be easier for you to be part of this new human resource revolution. We now live in a time when companies across oceans open their workspace to virtual commuters who are qualified to make a positive contribution to their bottom line through reduced cost and increased productivity.

2. We are in the DIGITAL REVOLUTION

The Internet has changed the way companies do business. It has opened new avenues for businesses to explore a potential market of billions at the click of a mouse. Social media has given companies an efficient way to connect to consumers and receive feedback. In the new economy, a website is no longer an option; it is a necessity.

An online business presents a two-way street in building your income. First, having your own website creates an online presence for your business; companies can search and find you. Second, your website in conjunction with savvy social media marketing strategies gives you a cost- and time-efficient method of acquiring new customers for your business.

Given the availability of tools created by ever-evolving technology, having an online business allows you to market and promote your products and to provide services rapidly with great breadth and scope compared with having traditional marketing methodologies.

Through digital marketing, you design a synergistic framework where the results of your online marketing strategies are driven inward to your website. Results can be tracked in real-time, which can give you an idea of how your digital marketing campaign is performing.

You will know precisely where your market is, how they found out about your business and the factors that interest them. With this information, you can introduce changes in your business model that will cater directly to your target market.

3. Consumers have become increasingly mobile device dependent

A study conducted by the United Nations showed that 6 billion SIM cards had operated in the world in 2012, which is just a billion fewer than the population of the planet. Moreover, Statista predicted that by 2017, there would be more than 5 billion smartphone users in the world. Smartphones have displaced PC as the premier point of origin for Internet users.

If half of the world’s population is online every single day and more than 60% of them or 1.86 billion individuals use smartphones, having an online business provides you a great opportunity to connect and be found by consumers.

Consumers scout the Internet every day; they are looking for opportunities and the best deals for their money. Smartphones have become their indispensable gadget. If your business is not online, you are unable to capitalize on a valuable resource that can build your enterprise beyond your wildest dreams.

4. Digital presence is no longer an option

Despite the explosion in popularity of the Internet and the proliferation of social media, it is surprising to know that 51% of businesses still do not have a website. This is largely due to misinformation on the value and cost of a website.

But the numbers do not lie. A large portion of the world is online every day. The 51% who do not have a website or a digital presence are seriously undermining their profit potential. Having an online business places you ahead of these companies. You do not only gain access to a global market but you can also establish a global brand.

It is not enough to have a social media presence. Online marketing strategies build awareness and promote products and services. However, these efforts must be driven to a specific destination where traffic can be converted into sales. Consumers, clients, and prospective suppliers want a venue where they can find you in the virtual world.

Think of your website as your virtual brick-and-mortar establishment. It is where business finds you and where you find business.

5. Cost of building a website is low

Contrary to the fears of businesses that don’t have websites, it does not cost much to build one. The cost of your website largely depends on its purpose.

The most popular tool for building websites is WordPress. It is a content management system or CMS that offers free website design templates. The CMS of WordPress is very popular because it is user-friendly, and those who have no experience in website design can navigate through its features and initiate updates.

An e-commerce website would be the most expensive website to build because of its additional features, such as a shopping cart, an option for credit card payment, and zoom-in capability for images.

I strongly suggest that you hire the services of a web designer to set up your website. In business, first impressions last. Given the mobile nature of consumers, your website must be not only aesthetically pleasing and functional but also mobile responsive.

6. Income opportunities are increasing

With an online business, you have no limits on the number of hours your business is open. Your business is open 24/7; 365 days a year. If you have an e-commerce website, customers from all over the world have the opportunity to find your website; all they need is an Internet connection.

If you are a freelancer, you can access all jobs that are posted online from different platforms, such as Elance-Upwork, People per Hour, freelancer.com, and guru.com. Your ability to take in work depends on your capacity to manage projects.

Lately, we’ve come across inspirational stories of people who were able to turn their fortunes around by starting an online business. If you work smart and keep at it, perhaps one of these days, we will know about your story too!

7. Business modeling is flexible

One of the biggest advantages of having an online business is its high degree of flexibility.

Every investment, that is, every venture, is influenced by three components: price, volume, and time. Price refers to the cost of security, asset, commodity, product, or services. Volume pertains to the amount of work or level of demand that exerts an influence on your pricing. The time corresponds to the period you allocate for every level of interest your business accrues.

In an online business, all of these three factors are highly flexible. You can set a price for your product or service, but these can be adjusted or negotiated upon because of volume. As stated earlier, there are no time constraints when you work in the virtual world. Depending on how you manage your price, degree of volume, and time, you can be in a position to ensure the highest levels of productivity for your client and earn unprecedented yet sustainable income as well.

8. Online business presents a low-cost alternative

The number one reason why large companies, such as Xerox, United Health Group, and American Express, hire telecommuters is to streamline costs. Hiring freelancers has proved more cost-effective than recruiting full-time employees.

On the supply side, companies use the Internet to source new vendors who can offer competitively priced but high-quality merchandise rather than depend on those who comprise their current supply chain. In addition to workforce export, businesses also seek to outsource materials, component parts, and other operational requirements from locations that offer a comparative advantage.

With an online business, you can offer your products, services, and expertise to large corporations and potential large-scale distribution channels from the comforts of your home office.

9. Greater productivity can be generated

When a friend of mine was making a project feasibility study on the transcription business, his research uncovered a very valuable statistic. Home-based transcribers were 78% more productive than site-based transcribers.

In his study, medical transcribers who worked from home averaged 750 lines per day versus site-based transcribers who can only accomplish 400 lines per day. The methodology included a survey, and the top five reasons cited for the increase in productivity are as follows:

  1. Less stress
  2. No office politics
  3. No inconvenience from the daily commute
  4. Higher-income
  5. Closer to loved ones

Home-based workers are happier and less miserable than regular office workers who are subject to the inconveniences of traditional work.

They are also more productive simply because their income depended on it. Telecommuters are paid based on the accomplishment of milestones established by their clients.

Moreover, if you manage an e-commerce business, your productivity will likewise increase because of the availability of technology. I have met multilevel marketers who can significantly increase their earnings by running their businesses online.

Instead of renting a venue or an office space to meet with prospective sign-ups, they can conduct their seminars online via platforms, such as WebEx or GoToMeeting. If they have sales teams, they can use Asana to keep track of their performance. Now, with the availability of Viber, you can contact prospective clients and customers on their mobile phones free of charge.

10. Bottom lines are exponentially improved

When you have a business model that guarantees low operating expenses and improved productivity, you have forged a double-edged sword that has successfully addressed these two variables of the equation, thereby making business happen.

Another friend of mine managed an office for his company from 2009 to 2013, their profit margin averaged 35%. When they shifted their business online, their profit margin more than doubled to 80%.

Their operational expense sheet covers the following accounts:

  • Internet including back-up
  • Power
  • Salaries, fees of contracted freelancers
  • Office Supplies
  • Business permit renewals (annually)
  • Professional fees; an on-call basis for accountants, IT, and other specialized skills
  • Maintenance costs for PC and laptop

This case study tells us that incremental costs decrease as work volume increases because expenses are distributed to increased sources of revenue. Thus, working online has the added advantage of economies of scale.

It also works both ways. Personally doing business online, I am able to contribute to the productivity of my clients without creating a ripple on their monthly budgets.

Despite the advantages of owning an online business, challenges remain. In the Philippines, companies are still indoctrinated in the ways of the “Old Economy”; there too many structures, processes, and management teams are used in search of the “Perfect Plan” that no longer exists in the global economy.

Local companies are less receptive to engaging the services of online businesses compared with foreign companies. In a meeting I had with the director of a billion-peso Philippine company who does not acknowledge the benefits of using virtual teams, I asked him, “Why do you believe Mark Zuckerberg, who runs a billion-dollar company, namely, Facebook, would hire virtual teams from the Philippines but yours won’t?”

The advantage of owning an online business is that the laws of time and space do not apply. You are not constrained by four walls or mandated work hours. If you had a physical brick-and-mortar establishment in the Philippines, you would be limited in scope and reach.

Thanks to the Internet and the digital revolution, the possibilities in building a business are limited only by your capabilities, desire, and commitment to succeed.