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Business formation: Physical presence versus online presence

When deciding to start a business, there are number of considerations that may need to be taken into account. For example, there may be business formation issues relating to inventory control, staffing and leases. One California small business, though, decided to ditch all that when they took their bakery and catering business to the web.

Although many small businesses have an online presence these days, they typically do not involve freshly baked produce. However, after examining their options, one Sacramento-based business decided to go the online-only route. They now operate two websites: one that delivers personalized cakes and baked goods overnight to all 50 states, and another that specifically targets the local area and delivers the food directly to a home or office.

Yet just as a business may experience difficulty in gaining traction with a physical presence, the bakery also experienced a similar problem online. So in order to ensure that people could locate them, the California owners undertook a strategy called search engine optimization in which they made sure their site was Google friendly. They also spend between $200 and $3,000 each month on ads with Google’s advertising program.

In their case, the bakery was able to successfully manage the transition from a brick-and-mortar store to an online website. They not only dramatically reduced their costs, but they also created what is essentially a national operation. Nonetheless, what worked for them may not necessarily work for others. In many cases, a physical presence may be preferable, and understanding the business formation issues involved is key to success either way, no matter the decision a business owner makes.

Source: The Sacramento Bee, “Personal Finance: How a small business succeeded online,” Claudia Buck, March 11, 2012

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