A regular column providing answers to your legal questions

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Welcome to the bi-monthly column in which experts from IBB solicitors answer legal questions submitted by you.

        Answered by Charlotte Newlyn, solicitor.

I’m starting a new business and I’m not sure whether to open a bricks-and-mortar shop or exclusively sell online – which is best?

As ecommerce goes from strength to strength, it would be easy for entrepreneurs to think that opening an online business is the only sensible choice. However, it has been proven time and time again that people engage with people. Face-to-face business still works, and opening a physical base is still a valid option, with some hugely-successful online businesses opening brick-and-mortar stores to meet consumers’ needs.

Both options are viable choices and it is important to consider the perks and pitfalls of each to pick the best for your business.

Perks of creating an online business include: low ‘rent’, ie your domain and website creation; low expenses, given the frequent lack of physical office space; and, quite possibly, a lack of any of your own goods or services (think AirBnB, Uber or eBay, which provide a platform for others to sell goods and services). On the other hand, high-street stores can offer a more personal shopping experience to customers, allowing them to try products on, or out, before buying.

Entrepreneurs must be wary of the pitfalls of both models. With ecommerce, you must fulfil your GDPR obligations, and online shoppers are becoming increasingly unsure of providing personal information, with growing numbers limiting the amount of data they share with the companies they buy from. On the other hand, opening a physical shop may incur SDLT, council tax, business rates and/or rent and the cost of stock. Both, however, will likely require the employment of staff, requiring the payment of wages and implementation of policies and handbooks. 

No matter how you choose to run your business, it is key that all retailers adapt as times and trends change. Whether you plan to trade online or on the high street, setting up your own business is exciting, but it can be daunting. It is imperative that you obtain good legal advice every step of the way, so that you can be sure that you are running your business properly.

Charlotte Newlyn
01895 207916
charlotte.newlyn@ibblaw.co.uk
ibblaw.co.uk

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