By now, you’ve probably heard all the warnings about operating a business in the current economic climate.

They may have ranged anywhere from a well-meaning “Be careful” to an ominous “Get out now!”

And while both of those reactions are probably the result of people who care about your success, I’m going to give you reasons why not only operating, but starting, an online business in a bad economy isn’t such a bad idea…

• Low relative costs

Let’s not dance around this fact: your brick-and-mortar competitors probably have it bad. But part of the reason why they’re struggling is because of the costs of operating a physical store. How much does it cost to rent space? Pay employees? Buy equipment? A lot. The cost of these things is significantly decreased when operating an online business. It’s almost pay-as-you-go in nature- a built-in way to keep costs down by purchasing only what you need. In this sense, online businesses are a great fit in this era of thriftiness. 

• Expansion

Truly, you can make yourself and your products available to different markets with much less difficulty than a physical business. The arms of the Internet can reach anywhere. But physical businesses? They’re literally bolted to the ground. Also, easily adding different products to your inventory can mean that you don’t suffer from the seasonal downturn than many brick-and-mortars do, which in turn can result in a greater opportunity for profit. Analyzing buying shifts, understanding customers’ economic concerns and noting their waning loyalty to brick-and-mortar competitors and can make you very visible and attractive to your target markets- if you’re not afraid to spend a little money to do it.

• Marketing

A ramped-up marketing strategy is what saves lots of business in tough economic times. But if you’re familiar with online business, you’re probably well aware that marketing is going to be one of your top priorities, regardless of whether you’re operating in a soft or prosperous economy. Online businesses have an advantage over brick-and-mortars because they have limitless target markets at their fingertips- literally. An example? It’s definitely cheaper to build profiles at any or all social media sites and request “friends” than it is to print 1,000 flyers and hire someone to hand them out.

• Competitive Intelligence

Nothing is really certain in business, and anticipating your competitors’ next moves can be difficult. This is especially true in a shaky economy. But having an online business means that you have a direct line to your competitors and can check them out all day, every day if you want to. You might even be able to beat them to the proverbial punch by minutes. Many business owners will make the mistake of believing that they don’t have to put as much effort into keeping tabs on their competition in a slow economy, since everyone is being affected in the same way. Rather, this is the most important time to keep apprised about what others are doing. A shaky economy means that businesses are left teetering and that their movements, just like their presences, aren’t set in stone. If you keep a keen eye on the competition, you can simultaneously take advantage of their many woes and add their small successes to yours.

• Payment options

Tough economic times may mean that your customers have limited funds…and that they may be in more places than just one. Credit cards have been the go-to payment method for online shoppers for years now. But with increasing concern over personal spending and newly-imposed credit card limit restrictions/reductions, consumers may be looking for alternative ways to pay for their online purchases. It might not be too long before we see a drastic increase in bank transfers or deferred billing options like Bill Me Later. Offering more ways for customers to pay for their purchases can only give you an advantage over brick-and-mortars that only accept cash and credit cards.

• Brick-and-mortars will be careful…maybe too careful

The cost of stocking shelves with inventory is something that brick-and-mortars will weigh on a daily basis. Most will take the safe route and will only stock what they think is necessary. This translates to low inventory, a higher demand for products and a need for customers to find the items elsewhere. And where can those customers find the items? Online, of course. You can be their new and trusted source.

Make no mistake. I’m in no way suggesting that new entrepreneurs invest in a business as an experiment or without the foundation of a solid, tight business plan. But if you’re “nimble and flexible”, are highly adaptable and a sound decision-maker, starting an online business right now might be a great way to make money. The thing to remember here is that online businesses may be affected by the economy, but they’re still a better bet than brick-and-mortars. The trick is to invest in an industry in which you’re likely to succeed. I can’t tell you which one that is. But if you’ve been seriously thinking about starting an online  business, your research will.