The year of 2020 has proven to be one of the most memorable years of our lives yet, while 2021 is looking to be a strong follow up. We live in a brand new reality brought on by the global pandemic COVID19 that has thrust every single one of us into a time of economic uncertainty.
While some of us are missing 2019 and the illusory promise of eternal economic growth that we were all content to be living under, the reality is that the economy is part of a cycle that fluctuates between periods of expansion (growth) and contraction (recession). Times of crisis, big or small are inventible, but upon closer scrutiny, it’s important for entrepreneurs to note that times of crisis offer opportunities for you to either advance, or stay exactly where you are right now.
And while we are, in the very literal sense, forced to stay where we are owing to lockdowns across the globe, the new reality we find ourselves in has suddenly opened up a great opportunity for anyone to start a new hobby, business project, or both. Think about it, are you ever going to have an abundance of time and space to work on your hobbies and business ideas as you do right now?
If you think that this is a bad time and that your business ideas have gone to the grave early because we are in a contraction period of the economic cycle, remember that some of the world’s greatest businesses have started during economic downturns and times of recession—proving that your business ideas and ambitions shouldn’t be allowed to stop even when other aspects of life have temporarily halted.
Let’s look at some prominent examples of businesses that were established or were in the process of being developed during a downturn:
- Walt Disney Productions Ltd- established during the Great Depression in 1929.
- Microsoft- launched in 1975 after an oil crisis and 16 month long recession.
- Burger King- Took off while the nation was adjusting post Korean War.
- CNN- Established during the early 1980’srecession.
While these are big household names that you know today, it goes to show that your creative side, your passions, and sense of entrepreneurship should never be suppressed, especially during a crisis.
So what are the industries that are thriving under the Coronavirus crisis?
Since we are all facing a life-style shift of having to stay at home due to restrictions of movement, people have been spending more time engaged in indoor activities, and a lot of people are spending more time than ever on the internet, opening up more possibilities and opportunities for online services and businesses to thrive.
While there may be a general decline of economic activity and movement in the physical world, activity online is a different story altogether, leaving room for more opportunities for ecommerce entrepreneurs to render services and products to customers who are spending more time in the online world from their couch at home.
It’s also worth noting that in contrast to large corporations, small startup businesses prove to be a lot more lean and agile during a crisis, and can be less vulnerable during times of recession than larger counterparts that are too busy trying to mitigate damage. A startup business that is quick on its feet can favorably position itself to deliver a great product or service while larger competitors find themselves floundering to stay afloat.
Now let’s talk about 5 reasons why it can be worth starting or developing a business during a downturn economy:
1. Less Competition
One of the challenges of starting a business, whether online or offline, during a thriving economy is that it can be a little difficult to even get the notice of your potential customers owing to the fact that you have a ton of other competitors to contend with.
Now that the clutter and the noise of a thriving economy has hushed up a little bit, the decrease of market activity can make it easier for startups to get the attention that you would have otherwise had to fight harder for.
In a world where others are fearful to start a business, now can be a potentially good time to go against the grain and plan a business that is adapted to the current situation with less competitors cropping up and fighting for a slice of the market.
2. People Crave Innovation
A crisis creates new problems for people, meaning that there is room for innovation and new ways to solve these problems. Problems that a well adopted startup can help solve or ameliorate to some extent.
Every sharp nosed entrepreneur knows that problems are business/money making opportunities in disguise. While bigger companies are laying off their employees, and focusing on cutting cost, you can use this time to come up with new ideas, and looking for solutions to problems.
One place that you can look to and focus on these days is home-life. Since we are all stuck at home, businesses that are geared towards home life, and who can bring comfort and ease with their innovative ideas or convenience may find more customers appreciative of the service that they bring. People who are creative and are innovative thinkers, now can be your time to shine.
3. People Want to Save
During times of uncertainty, people have a tendency to want to spend less and hold on to their savings until better times roll in once again. People are cutting back on luxury vacations and depriving themselves of items and services that they used to spend their “disposable” income on in favor of saving up.
Startups that can provide customers with the opportunity to save money with cheaper alternatives may win over some more customers during times of crisis.
Ecommerce startup businesses don’t necessarily have to have nearly as much expenses as a physical store, meaning that you may be able to one-up your competitors by offering more affordable pricing to your customers. As long as a business can survive with minimal overhead cost, you’ll be able to ride this one out and capitalize on the unique opportunities that a crisis can pose for a more flexible and agile startup business.
4. Skilled Individuals are Looking for Work
For people looking to start a new business, rising unemployment can give you a wide selection of talented developers, content creators, and marketers who can give you a boost, and who you can help in turn with your budding startup project.
In a time when people are getting laid off of work, you can have a higher picking of highly-skilled and motivated individuals whose expertise can help you build a business that will thrive in this economy and through it.
One of the things to take into consideration during “bad” times like these, where people are losing their jobs, is that top talent can be found more easily to help you get along.
5. You’ll Find Better Business Bargains
Products and services are generally cheaper when the economy slows down. Just as consumers are demanding for bargains, startups are also going to find that what you need to fuel your business during an economic slowdown may cost less. You can take advantage of lower sale prices for items and business assets during a recession.
During a downturn, other companies and businesses are willing to lower their prices for goods and services, giving your startup some leg room in terms of reduced cost and overhead expenses.
Back to You
Times of uncertainty can be one of the greatest moments to remain in search of opportunity, and it’s important to remember that all recessions historically have had an end. It’s all a part of a cycle, and while some businesses thrive during times of uncertainty, and while others struggle or fail, new businesses can emerge precisely because of the unique problems that a crisis can create.
Your new business can position itself to fill the gap that others are too afraid to close. If you were planning for 2021 to be the year when you start your own business, the advent of COVID19 should not be treated as a damper to your entrepreneurial spirit, it should be seen as the fuel to the innovation that we need in our lives.
If you are considering becoming a new business owner this year, just make sure to continue to do your research, and see what you feel you can do to bring value to your potential customers lives during this time, and if you can do this, you may emerge from this crisis better off than had you not decided to do anything fruitful with your entrepreneurial inclinations at all.
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