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What impact has the internet had on starting businesses?

There is no doubt, the internet has had a significant impact on the way individuals, live, work and make purchases. Businesses are no exception. Over the years, the internet has been adapted into the business world, generating additional revenues. The spread of COVID has only accelerated the usage of the internet. It is important to consider different issues that arise from this. The first one that will be discussed in this blog will be both the positive and negative impacts, examining the impact on people wanting to start a new business and the changes in the way small businesses operate.

There are many positive aspects the internet has had on starting businesses. One of the main aspects is the lowered costs to starting up and advertising. The use of the internet easier the barriers of entry into the market because the costs of starting are significantly smaller. This is because the physical aspect disappears to an extent, therefore, office spaces and running costs may not need to exist. This gives a new business a fairer chance to compete with older, more established businesses. Also, the internet means that advertising becomes relatively cheaper, as it moves from the traditional method to more diverse options with lower costs. An example of a free marketing tool would be the use of email marketing. This helps customers come back to use their products and services without having to dip into the marketing budget, which can be quite profitable. The internet allows small businesses to start from scratch from the comfort of their own homes by using low-cost websites and advertising.

In addition to this, it has become easier to build communities and reach more people. Blogs and social networking apps can be used to reach people worldwide. The use of the internet means that there is no limit (if they have access). This significantly widens the target market. Using social media, often businesses can find that they can build communities which strengthen brand loyalty and attract other customers as well. It becomes easier to find investors willing to invest in the company, as again the number of potential venture capital investors increases as they can be from across the globe. The impact on small businesses heavily encourages the profits and funding gained hence the significance of internet usage in companies.

A consequence of being exposed to the whole world rather than just a small demographical location is that it sparks creativity. Ultimately, it permits companies to become more open-minded and aware. This paves a way for new perspectives and ways to keep their built community engaged. The imagination has no limits as the resources are widely available online with little to no expenses occurring.

On the other hand, there are some disadvantages to the usage of the internet for businesses. One very prominent risk associated with the internet is that cyber security is needed to protect the business from hackers. This is vital to keep the company and its assets safe. Small businesses in this regard would have to be extra careful because hackers may find it easier to attack vulnerabilities within the organisation compared to more established companies where they have protocols in place.

Another negative impact of the internet for businesses is a direct consequence of having fewer barriers to entry into the market, which is overcrowding markets. Overcrowding markets make it harder for small businesses to stand out from the crowd, particularly when big companies are dominating the industry. When too many companies try to surge into the same market, profits made by each company will be reduced all over the board. This is since there are many options for a customer to choose from and competition will reduce.

Lastly, more use of the internet means that there would be less face-to-face interactions. Humans are known to desire human interactions and impact how consumers buy products/ services. If a customer enjoys the interaction, then they are more likely to buy again and recommend it to others- building loyalty. However, take away the interaction element and it becomes harder to build that relationship. The customer will not have gained a connection with the shop and will not think much about the company again. Companies thrive when they show that they care about the customers even after the purchase.

In conclusion, the internet impacts businesses in a hugely significant way, both positively and negatively. This article only mentions a few but it is important for companies to be aware of issues that can arise and know how to tackle them before starting a business.


Edited & Reviewed by Tanish Bagga

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