Let’s face it ! The COVID-19 pandemic has impacted our world in dramatic ways.When we asked companies if the pandemic affected their businesses, about 54% of owners stated it had, and another 51% indicated their income was negatively impacted. However, some companies thrive during difficult times.
Should you wait to start your business or go ahead? Opening a new company during this global pandemic presents pros and cons.
- Crisis breeds opportunity.
Apple. Disney. IBM. HP. Microsoft. General Motors. Burger King. Uber. Square. Airbnb. Some of the largest and most successful global companies were started during times of economic crisis.
- Start with the New Needs in the Market.
No matter what type of product or service you sell, begin with a model that makes your customers feel safe. From a widespread need for reusable masks to better video conferencing options to at-home fitness solutions, COVID-19 has created thousands of new market needs.
Your new business can thrive during a pandemic if you consider your audience’s emotions.
- Geography no longer matters.
Once upon a time your customer base was limited to those who could attend your store or order from a catalog.
But the internet changes all that and geography is no longer a constraining factor for 21st Century Entrepreneurship.
- Time is on your side.
With many people working from home and social distancing rules in place, you may have more time to develop your business. Instead of spending a Saturday afternoon out at a brewery, your time can go into the behind the scenes work of forming your business.
More hours can be spent drafting your business plan, doing competitive research, or creating your website.
- Expenses are being cut, People May Not Be Buying.
The first thing that most businesses would do when a recession hits, is to reduce the company’s expenses. And it’s the right thing to do considering that even consumer spending would most likely fall too.
When people face primal fears, they often turn to essential things to help them feel secure. They’ll concern themselves with essential needs before worrying about other items.
- Raising Capital May Be Difficult.
Bootstrapping is possible but most new businesses will need some amount of capital to get off the ground and running. And securing traditional sources of funding when launching during a recession, may prove to be difficult as you may need to show a proven track record.
Many funds for SMEs and traditional lenders also require that the business be in existence for a year to consider your application.
In conclusion, starting a business during a recession may seem super risky. But just remember to keep your costs lean and your target audience in mind.
Most importantly, make sure your business plan is solid.