Should You Still Consider Starting a
Business In the Aftermath Of The COVID-19 Crisis?
The COVID-19 crisis may have changed the way many you think about your life. For many, being quarantined will have allowed time to acquire new skills, hobbies or side hustles with more focus. The current situation will have forced many of you to ask what you really want to do with your life. Starting a business is an idea that many people are toying with.
If you’re good at a particular skill or have a solid product/service idea, you might have thought about pursuing that for a living instead of, or alongside your old job. Unfortunately, of the many of you who think about it, very few will follow through. There are many (valid) reasons for this:
- the simple reality that you need money to pay your bills and buy food.
- the fear that the economy will be irreparably damaged after this crisis.
- a lack of confidence in your idea and its ability to succeed.
Let’s deal with these reasons one by one, and how you can think about them in a different way.
Putting Food on The Table
Paying for your housing, food and bills is a fixed cost that you will incur for life. This was a reality before the COVID-19 crisis, and it will remain so afterwards. This shouldn’t be a reason not to pursue your business idea. If you think about how restricted you have lived during this crisis, you may have realised that many of the things you thought were important, you’ve been fine without.
Work out your absolute minimum required life expenditure and build your idea around your full-time job on evenings and weekends.This is what many of the founders we have interviewed did. They have gone on to or are working towards building a life/business that works for them. Remember that there are many types of business goals available to you. Running your own business isn’t a toss-up between being the next Facebook or being a failure. Most businesses are small businesses, and their owners aren’t cash-rich.
Many people starting a business have a false perception that it’s “all-in or nothing”. The reality is, as many of the founders we have interviewed will attest, businesses take time to build. Your business will have to fit around your other commitments for a significant period before you see any success.
The statistic that “95% of businesses fail within the first year” is often used to warn people of the risk involved in starting a business. However, research has shown that this is only true for businesses who haven’t adhered to fundamental business concepts before starting – like planning and organising financials. It also probably includes people who have simply given up due to lack of sales or revenue. In other words, you should probably ignore this, as it’s unhelpful.
Damaged Economy = Starting a Business Is a Waste of Time?
There’s no doubt that the economy will suffer because of the current global crisis. However, this should not be a deterrent to you starting a business. If you view business ownership as a path to riches, then a broken economy will likely impact your risk appetite. If instead, you view business as a way of building a life that suits you, then the economy matters slightly less.
As stated earlier, building a business takes time. The truth is, now is as good a time as any to begin building your business, the brand and its following. So when the economy bounces back (it always does) you will be ready to capitalise.
There is also one really important fact about the current state of the economy that might make you slightly more optimistic: people are still spending money. Depending on your particular business niche, now might be a better time than ever to launch a business. With everyone stuck indoors, people are going online and spending more there than ever before. If your product can tap into this somehow, you might be onto a winner.
What’s more, since business will be important to re-building the economy post-pandemic, banks are likely to offer favourable rates of interest on business loans.
If you have a plan and there is a market for your product/service, you shouldn’t be deterred by the economy. Instead, figure out a way to work within it. There will be lessons to be learnt from businesses after this crisis. Particularly around protecting yourself against the unforeseeable and learning ways to adapt.
Lack of Confidence In Your Business Idea
Confidence is a problem that many potential entrepreneurs deal with. It stops most people from ever taking the plunge. However, if you approach things in a systematic manner, your decision might be made easier.
If you are entering an industry for which there is already an established market, you know demand exists for products like yours. For example, if your business sells chocolate bars, you know that there is an established market as chocolate is the world’s most popular confectionery item. That’s your first piece of research complete.
In this position, the problem you need to solve is how to get your idea in front of the market. Of course, products for which there is an established market come with their own problems to solve. Namely, how to penetrate a saturated market and building brand recognition.
If you are creating a new or unique product/service, your first question MUST be, “Is there a demand?”
This may seem obvious, but you’d be surprised how many people overlook proper testing of their business idea. These are the businesses who are more likely to fail within a short period.
How do you test your idea for a new product or service? The answer is that it depends on the product or service you are offering. If it’s something that can be offered online then a creating a landing page with a service like Unbounce is an excellent, cost-effective method. A landing page is a one-page website that tells visitors your value proposition. You are then able to see if your idea gains traction.
The good thing about a landing page is that you don’t have to have your product ready to build these pages. In theory, you can merely have the ‘idea’ of the product, and announce that you will be “launching soon”. Created in the right way, you can build up your email list and have potential customers before you’ve spent a penny on developing your idea.
If your business is an “offline” business, there are many ways in which you can promote your service at low-cost and see if there is an interest. For example, leaflets through doors, or even more effective, offer free taster sessions or product samples.
There is little doubt that COVID-19 will have numerous ripples upon the economy. The reality for you, however, as a potential entrepreneur is that the challenges in creating a business remain the same as before, albeit with some adjustments. This is not the case for every industry, and there are some in which setting up a business will just simply not be feasible for the foreseeable future (e.g. the hospitality industry).
But for those who are less affected, nothing should stop you. Humans have always found ingenious ways to thrive in times of crisis, and this will be no different.