Due to the forced social distancing and self-isolation measures, the COVID-19 pandemic placed a tremendous strain on the US economy, with more than 100,000 small businesses permanently shutting down. Despite these statistics, the increase in business applications hit an unusual high, passing 3.2 million in 2020.
So, what is inspiring entrepreneurs to start businesses during unprecedented times?
A recent survey reported that 27 percent of new business owners were laid off from their full-time jobs. On the other hand, 51 percent encountered unique business opportunities and took a leap of faith.
Despite being times of great need, recessions are also moments of crisis that inspire innovation. Whether you’re interested in selling baked goods or handy teeth whitening pens, now may be a great time to strike out on your own.
Here’s how can you start a business during the COVID-19 pandemic.
Determine Your “Why”
The first step in establishing a business is to take some time to think about your why. Do you want to make a difference in the community? Are you passionate about a particular service or product? Or maybe you’re ready to be your own boss. Your motivation matters because if the why is not compelling enough, you won’t be able to weather the challenges of entrepreneurship.
Once you’ve identified the why, start setting clear goals for your business and identifying customer pain points.
Fill a Market Need
The pandemic drastically changed consumer habits, so consider how your services or products fit into the COVID-19 lifestyle. Consider the industries thriving during the pandemic:
- Home improvement
- Delivery services
- Cleaning services
- Fitness equipment
- Food and beverages
- Pet care
Think about what customers need right now and determine how your business can answer their needs.
Learn About Potential Challenges (And How To Deal with Them)
In line with setting business goals, learn more about your potential challenges in the future. Pre-pandemic, starting a business is already difficult, but COVID-19 created new challenges for entrepreneurs who want to start a business now. Some common challenges include:
- Adjusting to client needs. Your customers may not need the same products and services that they did pre-COVID-19. For instance, starting a dine-in restaurant right now is not an option. If you want to start a restaurant, consider al fresco dining.
- Cash flow and money management. Since everyone is uncertain as to how the pandemic affects specific types of businesses, make sure that you have enough to get started and then maintain a reserve account for potential challenges.
- Offering services safely. Customer confidence in business safety is low right now. How can you offer products and services without compromising consumer safety?
Integrate Digital Marketing Into Your Strategy
A robust digital marketing strategy can bolster your new business during these trying times. With limited opportunities to meet customers and partners in person, focus your efforts on reaching people via digital platforms. Maintain direct communication with customers by showing empathy in your online messages.
For example, create an online survey to see the areas where your target market is currently struggling. If you’re selling a laptop cooling pad, find out how this will benefit your potential customers. Your online behavior must back up your intention.
Optimize your digital marketing campaign and transform it into an informative communication plan. Regular practice of online marketing also makes it easier for your customers to find you.
Leverage Your Network
Now is also the best time to leverage your professional and personal networks to spread the word about your business. Be creative. Use social media platforms like Facebook, Instagram, Twitter and LinkedIn to reach your contacts.
Get in touch with your network and see if anyone would be interested in pre-ordering your products. Consider networking as an opportunity to gain feedback on potential demand and pricing. Start by creating an informal focus group consisting of participants that fit your target audience. You can also use online survey tools to get feedback.
Prepare for the Future with a Recession-Proof Plan
Adapting your business model to the current climate is important. This includes monitoring your expenses so you have reserves for the future. If possible, bootstrap your business. Save at least six months to a year’s worth of savings in case you don’t reach the initial sales you planned. Also, take advantage of local, state and government assistance.
In terms of vendors, always review agreements and negotiate payments to extend your cash flow. Also, discuss concessions with your partners. Hopefully, like most suppliers, your partners will be more flexible, especially if they want to establish a long-term business relationship.
2020 was a challenge, but 2021 (and beyond) will be challenging yet remarkable at the same time. Seize this opportunity to provide services and goods that the world needs right now.