If you dream of location independence, or being able to quit your 9-5 job and create a life of freedom, making money online is a great way to make it happen. However, there are both pros and cons of building your own online business to be aware of before you get started.
Running a successful online business has the power to totally transform your life. I currently have a few different online businesses and I can’t even imagine going back to a traditional job. It’s not for everyone, but if you’re willing to put in the work, the rewards can be huge.
15 Pros and Cons of Building Your Own Online Business
For me, the pros of building your own online business vastly outweigh the cons – although there certainly are a few cons, as I’ll explain below. This list of pros and cons is based largely on my own personal experience, but most of the points here are likely to apply to most online entrepreneurs.
Pros of Building Your Own Online Business
There are many advantages to building your own online business, and there’s a fair amount of overlap between each one. But here are the main reasons why building an online business is such a great idea.
1. Location Independence
For me, one of the biggest benefits of building your own online business and earning money online is location independence. Because you run your business online, you can work from virtually anywhere in the world with a power outlet and a stable internet connection.
This has the power to totally transform your life. No more commuting to the office, you can travel as much as you want, and you have the freedom to live wherever you choose. This kind of flexibility is priceless and allows you to design your life on your own terms.
2. Flexibility in Work Hours
As well as location freedom, running an online business also means you get to set your own working hours. You get to decide how many hours you work, what time you start and finish, and which days you want to work or take off. And you don’t need to ask anyone’s permission!
Maybe you’re an early riser and like to get everything done in the morning. Or maybe you hate alarm clocks (like me) and prefer to wake up later and start the day more leisurely. Either way, it’s your choice and you can do whatever works best for you.
3. Low Startup Costs
Compared to starting a traditional brick-and-mortar business, it’s usually much more affordable to start an online business. You don’t need a physical storefront, inventory, or employees – all you really need is a computer, an internet connection, and enough time to spend on it.
This makes it a great option for those with limited funds or those wanting to minimize financial risk. You can start your business on a shoestring from the comfort of your own home. Once it’s profitable enough for you to start scaling and investing more in it, you can put more money in.
4. Scalability
One of the major advantages of building your own online business is that it’s scalable, meaning you can grow your business without needing to significantly increase your costs. Once you have a solid foundation and the right model, online businesses are usually fairly easy to scale.
Increasing the scale of your online business usually involves automation and outsourcing – two things that are fairly easy to do with most online businesses. This does cost some extra money, of course. But, done right, it should allow you to generate significantly more profit over time.
5. Potential for Passive Income
Passive income – making money even when you’re not actively working – is the best! I mean, earning money while you sleep, travel, watch TV, hang out with your friends, go surfing, or do whatever else you want to do – who doesn’t want that? I certainly do!
You can automate many elements of an online business to generate repeat revenues with minimal ongoing work. Of course, you need to put in the hard work upfront to set everything up, and it may take time for the dollars to start rolling in. But once they do, it’s an amazing feeling.
6. Personal Fulfilment
Not all online businesses have to be personally fulfilling. But, because you can choose to work on something you’re passionate about and that aligns with your values, you can create a business that is both financially lucrative and also satisfying and fulfilling on a personal level.
Whether you find fulfillment in helping others, creating something new, or just being your own boss and having creative freedom – building your own online business allows you to make money while doing something you love. For me, personal fulfillment is a huge pro of working online.
7. Endless Possibilities
The online world is an exciting (albeit sometimes overwhelming) place. There’s a practically infinite number of opportunities for building and growing an online business. With the internet constantly evolving and new platforms emerging all the time, it’s an exciting space to explore and innovate in.
You can choose to create a blog, sell digital products or services, start an e-commerce store, become an affiliate marketer, offer coaching or consulting – the list goes on. The possibilities are endless and you have the freedom to try out different options until you find what works best for you.
8. Unlimited Income Potential
Unlike most “regular” jobs, your earning potential is not capped with an online business. With hard work and the right strategy, there’s really no limit to how much money you can earn. You’re not at the mercy of a boss or company’s decision on how much they want to pay you.
Who knows – maybe you’ll even become the next online billionaire! But even if you don’t, the main point here is that you have the power to control your own income potential. I absolutely love this sense of independence, self-reliance, and blue-sky thinking.
9. Access a Global Market
Thanks to the internet, you have access to a global market with millions of potential customers. This means you’re not limited by geographical location or local demand for your product or service. You can reach anyone, anywhere in the world, as long as they have an internet connection.
This opens up a whole new world of opportunities and removes any barriers to growth that may exist with a traditional local business. It also allows you to tap into different markets and diversify your income streams, reducing the risk of relying on just one market or customer base.
10. Constant Learning and Growth
Running an online business requires you to constantly learn and adapt as technology and marketing trends evolve. This means you’re never standing still – there’s always something new to discover, learn, implement, test, and improve upon.
You’ll likely suffer a few setbacks along the way – I certainly have. However, the constant learning and growth mindset is both exciting and also incredibly beneficial for personal development. As you navigate the ever-changing online landscape, you’ll gain valuable skills and knowledge.
Cons of Building Your Own Online Business
While there are certainly many upsides, there are a few disadvantages of building your own online business too. These may not all apply to you, but I recommend keeping these potential cons in mind when deciding what’s most likely to work best for you.
1. High Competition
Today, the internet is a crowded, sometimes cutthroat, place. Needing to stand out from the crowd is often one of the hardest aspects of building your own online business. The key to success is finding your unique selling point and leveraging it to attract and retain loyal customers.
It’s simple in theory, but it can be hard – and often downright exhausting – in practice. It takes time, effort, adaptability, trial and error, and resilience. The rewards are definitely worth it but don’t underestimate how much of a challenge it can be to get there.
2. Requires Self-Motivation
Building a successful online business requires a lot of self-motivation. No boss or supervisor is pushing you to meet deadlines or hit targets. You have to be disciplined, organized, and committed to putting in consistent effort even when it’s not easy or exciting.
I love working for myself – I’m a contrarian and hate being told what to do, so working independently works well for me! However, this can be difficult for those who are used to a more structured work environment. If you struggle with self-motivation, be honest with yourself about what’s right for you.
3. Income Inconsistency
One of the things I struggle with most with my online businesses is the inconsistency of income. Many online businesses take months to generate any money. This is especially true if you’re still figuring out your niche, target audience, and marketing strategies.
There may be months where you see a lot of growth and profit, and then there might be dry spells where business is painfully slow. This can be stressful and challenging to manage and is another big downside to building your own online business. It’s crucial to have a solid financial plan.
4. Potential for Burnout
Running an online business can be all-consuming, especially in the early stages when you’re putting in long hours and wearing many hats. This can lead to burnout if you don’t look after yourself, allow enough time to relax away from work, and find ways to manage your workload and stress levels.
Burnout is a real thing – trust me, I’ve been there, and it sucks. Prioritize your mental health as well as your business. It’s important to set boundaries, find balance, and know when to take breaks. It can be tempting to keep pushing yourself in pursuit of success, but it’s often more productive to take the time to rest rather than overexert yourself.
5. Isolation
Working long hours by yourself can be isolating. You don’t have colleagues to chat with or bounce ideas off of. This is something that will bother some people much more than others. If you’re more introverted by nature, it might not be a big deal.
But for extroverts, it can lead to feelings of loneliness and detachment. I find that connecting with other entrepreneurs helps, ideally in person, but online if not. Also, make sure you get outside and have some human interaction every day. Living like a hermit isn’t good for anyone in the long term.
Is Building Your Own Online Business Worth It?
Building an online business has both its pros and cons. It’s not easy, and there are a few significant disadvantages. But for many people (myself included), the benefits far outweigh the challenges.
Ultimately, everybody’s different and you need to figure out what works best for you given your personality, goals, and situation. Either way, I hope this post has been helpful, and good luck in whatever online business you decide to pursue!