You don’t need us to tell you that 2020 has been a wild year. The coronavirus pandemic has completely transformed everyday life, especially the way we work. Remote work has become the norm for the foreseeable future, and millions of Americans have been laid off or furloughed.
But there are some silver linings. These turbulent times could also be fertile soil for new business ventures—if you have an eye for market opportunities and the passion to put in the work. In fact, one in five respondents to a JustBusiness survey now has plans to start a business—a third of which were inspired by changes in the market due to the pandemic.
So should you start a business during a pandemic? The truth is that it depends on many different factors. Here are some important things to consider before going all in.
Pros of Starting a Business During a Pandemic
Before you dismiss the idea of starting a business during a pandemic, know that there are some potential benefits of doing so during this time. It goes without saying that persistence, resiliency, and innovative thinking are your best weapons.
1. There Are Plenty of Emerging Market Opportunities
The most successful businesses tend to be those that identify a consumer pain point and offer a viable solution that makes their life easier. This pandemic has brought no shortage of inconveniences and disruptions. Most of us are facing new challenges we never could have imagined. This is actually good news for business innovators because these consumer problems represent emerging market opportunities.
The businesses that have been thriving during the COVID-19 crisis all have one thing in common—they’re easing that discomfort for consumers. Twin Cities Business points to several examples that include a peer-to-peer boat rental platform, a reusable respirator manufacturer, and a virtual clothing resale marketplace. These businesses all satisfy wildly different needs, all of which are particularly heightened because of the pandemic. The takeaway: Think like a consumer and look for new problems that need solving.
2. The Timing May Be Right for You
Prior to the pandemic, 48% of Americans lamented that they didn’t have enough time to do the things they wanted to do. If you fell into this camp, and starting a business is on your bucket list, coronavirus may have created a unique opportunity—the gift of time. This certainly isn’t the case for everyone (we’re looking at you, work-from-home parents). However, limited social gatherings, restricted travel, and canceled sporting events may have resulted in more empty space on your calendar.
Give your business idea the time and mental energy it deserves while you’re sheltering at home. Once things begin to crystalize, you may also find that things like office space and furniture are cheaper to come by right now. Alternatively, it’s never been a better time to start a home-based business.
And if you’re looking to build a team, remember that there are lots of talented people who are currently seeking work. Even if you don’t have the capital to pay them, they may be interested in rolling up their sleeves, working alongside you, and assuming an ownership stake in the company.
3. You Can Test the Waters With a Side Business.
While the unemployment rate is still high, there are also many workers who have comfortably transitioned to working from home. In fact, 86% of people feel like remote work is less stressful. To put it another way, you may have a great business idea but have no desire to quit the security of your full-time job. The good news here is that the pandemic may be an ideal time to get a side business off the ground.
In the same JustBusiness survey, 57.5% of respondents said they’ll keep their day job while building their venture on the side. If you’d like to do the same, here are some things you can do during these more flexible work-from-home times:
- Clarify your business goals
- Make a business plan
- Network with others in your industry
- Connect with a mentor
- Delegate tasks you don’t have the time or skillset to do yourself
- Strategize for the long term
4. Your Digital Marketing Efforts May Pack a Bigger Punch
If you’ve noticed that you’re on social media more than ever, you’re not alone. By some estimates, up to 51% of adults in the U.S. are using social media at higher rates than they were before the pandemic. It’s a statistic that bodes well for your digital marketing plan, as it’s an opportunity to reach more potential new customers.
Social media marketing is here to stay, and this is a good thing. It gives consumers the chance to get to know your business and engage with your brand in an authentic way. What’s more, 71% of consumers are more likely to make purchases that stem from social media referrals. One benefit of starting a business during a pandemic is that your digital marketing efforts will likely reach a larger audience—which could convert to more revenue.
Cons of Starting a Business During a Pandemic
Unfortunately, not every business is built to thrive during a pandemic. There isn’t a one-size-fits-all instruction manual, but there are definitely some key points to consider when deciding whether or not to take the plunge. While the following may represent stumbling blocks, that doesn’t mean you can’t strategize accordingly and get over them. History has shown us that many successful companies have been born during difficult economic times.
1. Establishing Your Customer Base May Be More Challenging
One of the most important questions to ask yourself is if there is indeed a market need for whatever it is you’re trying to sell. The answer lies in your market analysis. A well-crafted analysis not only identifies your target market; it also provides critical insights to help you thrive within those parameters.
It plays a critical role in your marketing plan because it shines a light on who your ideal customer is and what their buying habits are. This analysis also homes in on your competition while fleshing out any challenges and advantages that are unique to your industry. Doing this legwork at the start can save you time, energy, and money—especially if it reveals that your business idea isn’t actually in demand. In that case, go back to the drawing board, retool, and try again before formally launching.
2. There’s Thicker Competition for Funding
Interest rates are currently low, which is certainly a good thing when it comes to securing funding for your new business. The caveat is that there’s also more competition. That’s not to say it’s impossible, but it underscores just how important it is to have a detailed, crystal-clear business plan that’s designed to secure funding. This step can give you a competitive edge if it helps potential investors connect with your business and understand your objectives.
There are many different ways to fund a new business. The right one for you depends on the nature of your business and your startup costs. Some businesses, particularly service-oriented companies, may need little capital to get going. Business credit cards, startup incubators, investors, and small business grants are other viable options to have on your radar.
3. Your Personal Life Might Be More Demanding Right Now
For many, the pandemic has created a perfect storm for stress. Between working from home, limited social interactions, and the demands of homeschooling, it can feel especially difficult to strike a healthy work-life balance right now. Not surprisingly, 69% of workers are experiencing symptoms of burnout while working from home during this time. That’s a 35% uptick from the beginning of May.
Giving your all to your new business may feel difficult if you’re emotionally drained. Start small and celebrate the wins. Getting organized and clarifying what needs to be done is the first part. From there, make a realistic plan and tackle these tasks bit by bit. It’s also okay to ask for support and forgive yourself when you fall short. These are difficult times and launching a new business isn’t an overnight process. Put systems in place to help you get there one step at a time. Something as simple as hiring a virtual babysitter can free up a few hours a week to focus on your business.
The Bottom Line
A pandemic can be a great time to start a new business if you’ve got an idea that resonates with consumers—and the dedication to bring it to life. In many ways, today’s market is ripe for new ventures. Still, understanding potential challenges from the get-go can help prepare you for the hurdles you may encounter along the way. Part of being an entrepreneur is understanding that there’s always work to be done. What separates success from failure is the ability to rise to the occasion.
- TCBMag.com. “Nine Startups That Took Off During the Pandemic”
- Gallup.com. “Americans’ Perceived Time Crunch No Worse Than in Past”
- FlexJobs.com. “Remote Work Statistics: Shifting Norms and Expectations”
- eMarketer.com. “Uptick in U.S. Adults’ Social Media Usage Will Likely Normalize Post Pandemic”
- HubSpot.com. “71% More Likely to Purchase Based on Social Media Referrals”
- Monster.com. “Work in the Time of Coronavirus”