Retail Shop or Virtual Store – Whats The Real Pro’s And Con’s Of Each When Staring A New Business? – 2024 Guide

Now is a great time to start a new business. That may sound totally counter-intuitive. After all, we are in the middle of the deepest recession in living memory. Businesses are folding up left, right and center as disposable income falls and the effects of the pandemic on footfall in town centers feed down through the chain of dependent retail and service establishments.

All of this is true, however, there is one indisputable fact to consider. If you can make a viable successful business in this environment it is going to be nimble enough and robust enough to truly flourish in a more favorable climate. You must really get it right now and the learning curve will be short.

What this means is you really have to be sure of your model. One component of this, naturally, is where you do your business. Will you have some form of traditional, physical presence or look to be a purely virtual entity? The cost of each is likely to be an important factor that drives your choice.

At first glance, the decision may seem to be an obvious one however it is worth looking a little deeper into the real costs involved with the options. An informed choice on this issue will build a foundation for your next steps.

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Looking first at what a physical presence in a dedicated commercial building brings to the table there are some distinct, perceptual advantages.

An office building, in the minds of many, conveys a certain gravitas and seriousness. There is a degree of unconscious bias that assumes ‘If they have an office it must be a trustworthy operation’. While it is biased, think about sagas such as Enron for example, to a certain degree perception can outweigh reality.

That said there are many very reputable, high-end businesses that are solely web-based. Again, speaking of perception there are not many things that speak more of quality and top value than the

Persian rug. Specialist rug merchants such as the long-established Persian and Modern rugs have a wholly virtual and successful operation. In the current environment, the value-add perception of a physical presence is being eroded more and more.

This leaves us with the costs as a primary driver. It is easy to assume that the costs of an online establishment are totally trivial and comparatively that may well be the case but there are several aspects, newcomers, to the world of e-commerce tend to forget.

There are some costs that are common regardless of the business type such as registration of a business name. Some cost centers are the same for both types of business but vastly different in terms of the amounts involved. The need for a speedy internet connection, for example, does not go away by virtue of having a physical office. Online access is a critical and standard need nowadays.

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The biggest factor is obviously the cost of the office itself. In the case of a physical one, whether rented, a shared space in a dedicated hub or an owned building the figure will obviously be orders of magnitude higher than a home office. Together with this are associated costs of maintenance and upkeep where a dedicated office will be much more expensive than a purely online one. With a home office, there may also be the opportunity for some tax benefits related to using part of the home as an office. From this perspective, the online office is far cheaper an option than the physical one.

While it may be clear that the costs of maintenance of a home office will be lower than a dedicated office space it should remember that one of the reasons is that word, space. A home office will usually be much smaller physically than the dedicated structure and with that comes a lower cost of upkeep.

The utility bills and electricity must be paid in both options. A virtual office will have much lower costs and again, there may be some tax relief available for the share of these bills. The home office has the cost advantage here. Get more information at

There are still some easy to forget costs that must be addressed.

A way of receiving physical posts, letters and official notifications is needed. You will also need to show some office addresses for regulatory forms and professional correspondence. It is generally inadvisable to have your personal address publicized widely as it opens the information up to potential abuse or unwanted visits and calls. This means that an online business is well advised to use some form of business address or post box facility. The cost of this on a regular basis will need to be factored in. Advantages of such an arrangement are it is typically easy to stop which means should the business needs change or no longer be required it is far less expensive than a brick and mortar operation. In this case, online wins the cost battle.

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When thinking of communication, it is more than a post that is required. A business should have as many ways of getting in touch as possible to make it easy to interact with. A phone line is an expectation most customers will have. In a physical building there will typically be some form of dedicated line and maybe even a switchboard with its attendant costs. The home office should avoid the use of a personal line that should be reserved for purely personal use. To fill this need options, include forwarding services to a dedicated mobile all the way up to a fully outsourced answering service with dedicated phone numbers and operators with appropriate scripts. In this case, the costs cover a broad range from a few pounds a month upwards depending on your needs.

Whatever option chosen the virtual office can usually provide phone connectivity cheaper than any physical one though the difference is not so marked. The home office comes out marginally ahead on this one though depending on configuration could be considered tied.

One area where you may have expected the costs to be the same is promotion and advertising. Both forms of business need to get the word out somehow. However, unlike a building, there is no need for physical signage and painted logos on your virtual real estate. Once again, the internet home office comes out ahead.

In closing, as you likely assumed the online office is a much more cost-effective solution though there are both extra benefits and bigger differences than you may have initially thought.