MBA2370 Should You Start a Brick and Mortar Business? + Free Ride Friday

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Hey oh. Welcome to the hundred dollar R. No fluff, just the good stuff with our practical business lessons. I'm your host, your coach, your teacher Omar Zenholm. I'm also the co founder of Webinar Ninja, an independent software company I started back in 2014 and today is Free Riot Friday. On Free Riot Fridays, we give away a lifetime membership to the $100 MBA program. Our six part course on showing you how to become a better entrepreneur. 100% guaranteed. If you want to want a free ride, just go ahead and leave us an Apple Podcast rating and review and you enter our weekly random draw we call Freeride Friday. Listen in on Friday just today to see if you won. It's that easy. We announce this week's winner a little bit later in the episode. In today's episode you will learn should you start a brick and mortar business. Traditionally, brick and mortar businesses are real physical businesses in the real world with a physical location. It's important to differentiate brick and mortar versus physical product businesses because you could sell physical products online in an e commerce store for example. But in today's lesson we're going to explore what are some of the pros of having a brick and mortar business. If you're thinking about starting a traditional in person physical business as well as some of the challenges you may face. I know many entrepreneurs are kind of sick of the online world and want to start a more traditional in person brick and mortar. So let's explore it. Let's see if this is a good idea for you. Let's get into it. Let's get down to business. I want to start by saying that traditional brick and mortar businesses were basically all of business for most of eternity. Essentially, online businesses did not exist 25 to 30 years ago and only really became easy to set up about 10 to 15 years ago. So in the grand scheme of things, online businesses are pretty new. And brick and mortar businesses are more tried and true. They've been around the block for a few thousands and thousands of years. And believe it or not, they have some really big advantages that a lot of them don't talk about. One thing to consider is when you have an online business, you are competing with every other online business in the world for the most part. Even for a physical product. If you're selling something online, usually fulfillment is possible anywhere in the world. You can deliver to any country. This means that you have a whole lot more competitors. You're competing with everybody in your market that's online that's going after the same customers you are. So it's really competitive. With a physical and brick and mortar business, your only competitors are the people that are around you in your local area, and those are numbered. And you can easily understand your competitors and differentiate yourself and become better. At least smart brick and mortar businesses do this. Another big advantage that people talk about is that you have built in marketing by just existing in the world and being insight in mind in your local area. People see you exist. They see your sign outside your door. They know what you could provide for them. Whether you're a laundry man or you're a service like a massage therapist, or maybe you're selling physical products like candles. People know where to find you if they need your product or service. If people just walk by you, drive by you, they're going to know about you online. Different story, you got to work on your SEO, you got to work on running great ads, content marketing, and the list goes on and on and on. Another big advantage of serving customers in person is that you actually have a better relationship with your customers quickly because you get to talk to them in person. You build a bond. You can get feedback immediately. People start having an affinity for you. You're actually part of the neighborhood, You're a community member. So there is a stronger bond between you and your customers. And you can build that relationship quickly in person. Online, it could take years before you build that kind of connection with your customers. Also, many business owners like dealing with people in person, especially their staff. They find it easier to be able to manage people in person. There's certain things you can do in person to communicate more effectively than over, let's say a video call or over email. It's easier to manage, it's easier to train, it's easier to praise when you're in person. And some people just enjoy dealing with people day to day in the real world. Now on the flip side, there are some challenges to brick and mortar businesses. Let's stick to the team and the hiring of the team. Ever since we have gone through the COVID era, not a lot of people want to walk into work anymore. They don't want to actually work in a physical space. They want to work from home. So finding talent, finding people to work in an office, work in a physical location might be harder than it used to be. Also, it's generally more expensive to start a brick and mortar business because you have more expenses. The rent for the physical space, the fitting out of your physical space. If you need to do certain things like built in kitchen equipment or shelving or decorations or whatever it might be to make it perfect for your business. There's insurances you got to worry about because people are in the physical real world. There are certain times they're going to need to close public holidays. And it's not like you just can't be online. You still have to be online too. People to find you when they Google you, they need to see reviews about you. They need to see how to book your appointments or check out your menu. If you're a restaurant, you kind of have to have a foot in the online world as well. 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Com sxm Online businesses generally are less expensive to start. Apple's. For Apple, they have lower overheads and it's generally easier to scale because you're online. And scaling a physical business means opening up other branches, other locations that entail other costs. If you have an online business, generally you have a bigger pool of talent. You don't need anybody in the local area. You need anybody that can do the job. And for a lot of types of businesses anywhere around the world, if one day you want to sell your online business, you have a larger pool of buyers because it's online versus a local business where you have to basically be in the local area or at least in the same country to want to buy this business. And we can go on and on with pros and cons for brick and mortar businesses and online businesses until the cows come home. But the real question is, should you start a brick and mortar business? And here's the bottom line. If you have a business that solves a serious problem, a pain that your customers need solving, and you can provide a great solution to that problem where you can make a healthy margin, it doesn't matter if it's brick and mortar or online, it's a great business. I've always said that businesses that allow you to roll the boulder down the hill are a whole lot easier than businesses that you are pushing a boulder up the hill. This means that when you have a great offering, a great product or solution that people want, that they're craving, that they're happy to part away with their money to get that solution that makes your life a whole lot easier. It makes your whole business easier. And if that business is in the real world, the brick and mortar, so be it. It's a great business. And if you enjoy it and you feel like this is your comfort zone, you excel in the physical space. In a brick and mortar, that's more of a reason for you to be like, yeah, let's do it. Many of the successful entrepreneurs I know have built multi, multimillion dollar businesses in the real world in brick and mortar businesses. And we're talking about mundane businesses, businesses you probably wouldn't think are that interesting, but they solve a real pain. Heating and plumbing companies, car repair shops, car wash, high end restaurants. The point here is that you want to build a business that you're good at, that you actually can provide great value to the marketplace and can get you big fat margins. You want to have a business that is going to give you enough margins to make it worth all this effort, but also to lie absorbed for any financial blows that come your way in the future. The businesses that struggle are the ones that their margins are so thin they are trying to just make it happen every single day. That's not a good business to be in. And most businesses that are services or are high end products don't suffer from this because their margins are thick enough. So keep this in mind when you have a brick and mortar business because your expenses are higher and you want to make sure your margins are healthy. There you have it. Thank you so much for listening to the $100 MBA show. Today's episode's not over though. It's Free Ride Friday. Let's see who won this week's free R and the winner is tmlpr. That's the handle on Apple Podcasts. TMLPR says Add this to your morning playlist. Five stars. Omar shares great insights and real life lessons. Thanks TMLPR. Your mission is to email me over@omar NBA.net so I can hook you up with a lifetime membership to the $100 MBA program. If you want to win a free ride to the $100 MBA over at 100mba.net, just leave us an Apple Podcast rating and review and you enter our weekly random draw we call Freeride Friday. Listen in on Friday, just like today, to see if it's that easy. We announce winners every Friday, just like right now. Before I go, I want to leave you with this. One of the things that people don't talk about is business is a joy. It's fun when you're enjoying what you're doing and what you're providing your customers. But when it's successful, when you're making money, when you're not stressing out, then that is an enjoyable business where you're making enough profits, where you're not worried if you're going to be able to keep the doors open. This is why you'll hear me talk about margins all the time. Because it makes a great business when you have big fat margins to keep you comfortable. Thanks so much for listening and I'll check you in Monday's episode. I'll see you then. Take care. Of. Hey Fidelity, Can I get a second opinion on stocks in the Fidelity app?

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