The coronavirus pandemic has created economic and social disruption around the globe. While it may take some time for economies to recover from the initial shutdowns caused by social distancing, entrepreneurship has actually surged during the pandemic. Many people have identified unmet needs and seized the opportunity to create businesses that address them.
Some people considering entrepreneurship may buck at the idea of starting a business right now, given the overall instability in the world. People who have maintained employment through the pandemic are likely fearful of quitting and introducing uncertainty into their lives.
However, now may be one of the best times to follow dreams of entrepreneurship. After all, an incredible number of opportunities have arisen in recent months. Additionally, the barriers to starting a company are lower than they have been in a long time.
Historically, periods of economic uncertainty have been fantastic times to start a new business. For example, during the 2008 financial crisis, startups like Uber and Airbnb were founded to take advantage of the changing market dynamics. These companies have now become household names.
Of course, not all companies founded during the crisis survived and thrived. However, economic hardship tends to create once-in-a-lifetime opportunities for potential entrepreneurs. Outside of the changing market dynamics that create opportunities, individuals have access to talent at lower costs and the benefit of a market defined by consumers will to try new products and services.
Often, this willingness to try new things is out of necessity and the companies that can address issues successfully are those that will thrive. Here’s why now is the perfect time to start an entrepreneurial venture
You May Have Greater Access to Extremely Talented Employees
Access to talent is an important factor for potential entrepreneurs to consider. During boom periods, business owners tend to have a lot of difficulty recruiting great engineering, sales, and design professionals. When the economy is on an upswing, these individuals tend to become scarce in the market and the top names can demand extremely high salaries that startups simply cannot afford.
This situation changes in a down market. Currently, as a direct result of the pandemic, many organizations and even large corporations have laid off their talent to save on costs as a means of surviving the downturn. These means that great minds are looking for work actively. Moreover, changes in the market have decreased the overall salaries for these individuals, so entrepreneurs can more readily afford great talent.
Now is a great time for entrepreneurs to recruit talent to help them develop their companies. One of the keys for success in the startup world is hiring great talent and individuals able to wear multiple hats, especially in the earliest stages. Under normal conditions, these people are able to obtain large salaries at established brands that can also provide a more stable environment.
However, when these larger companies are not hiring, talented individuals become more willing to take a chance on a startup. This is particularly true when entrepreneurs become creative with compensation. Entrepreneurs may want to consider offering equity to appeal to potential hires if they are strapped for cash. This way, individuals have a vested interest in the overall success of the company.
You May Be Able to Negotiate the Fixed Costs of Starting a New Business
In the past couple of decades, the fixed costs associated with starting a new business have decreased, but they are still quite a barrier to entrepreneurs. Starting a business involves a number of upfront costs, such as real estate leases and software. The problem with these costs is that they arise long before the company has a steady stream of income to cover them, so many entrepreneurs struggle to make ends meet.
Often, these costs keep people from successfully launching businesses. However, these costs have become more negotiable in recent months as a result of the pandemic. Landlords are now more likely to be willing to negotiate to ensure their properties are occupied. Also, companies offering Software-as-a-Service (SaaS) may be able to offer deals. Lowering these costs allows budding entrepreneurs to funnel money toward other costs, like hiring talented employees.
Potential Customers May Be More Willing to Try New Things
One of the biggest challenges in starting a new business is acquiring customers. Typically, this endeavor involves spending money on marketing to convince people to try new products and services. Even entrepreneurs with great business plans fail because they do a poor job of obtaining customers.
However, the current environment has significantly decreased the cost of customer acquisition. This is because people are more willing to try new things due to changes in routine or even just economic necessity. Consumers are currently altering their daily routines and may be more open to incorporating new products and services into their lives during this time of upheaval, especially as they try to fill more time at home.
Additionally, many individuals are looking for ways to cut corners and save on expenses. This means that entrepreneurs offering a cost-saving option may perform particularly well.