Why start a business right now?
What a wild ride the last two years have been. The unexpected COVID-19 pandemic put the world into a sudden recession. Stock market volatility, high debt levels, huge layoffs, and low consumer confidence all seemed to happen at once.
Entrepreneurs who started their business in 2020 found themselves in three scenarios: Failing, pivoting, or becoming unexpectedly successful.
While many of these entrepreneurs found themselves in the first category, the pandemic did create new business opportunities for others. The economy is still in a very uncertain place today. Regardless, it is a great time to start a new business opportunity.
We’ll talk about why now’s the time to start a business, what types of opportunities are out there, and more in this article.
Why it is a Good Time to Start a Business
Entrepreneurs have a lot to look forward to starting a business in 2022. The Omicron variant is less severe than the other mutations of COVID-19. Vaccination rates in the United States are over 60% of the population.
There are always going to be uncertainties when it comes to building a business. But here are the reasons why now is time to leave the rat race and get out of your comfort zone to start a new venture below.
Potential Customers are more Accessible
A lot of offices are still closed and many jobs have moved permanently remote. What does that mean? Consumers are stuck on their devices more than ever. Media consumption has significantly grown as a result.
Unsurprisingly, e-commerce has dramatically increased too. Estimates for e-commerce sales in 2021 are around $870.8 billion. That’s a 14.2% increase over the previous year.
These trends in purchase habits and consumer behavior are evolving the way that new and existing businesses work. Going online with your business is the pathway to getting your product or service in front of customers. With the right business plan that caters to solving the new problems of today’s world, you’ll have a good chance to succeed.
Competition levels are Low
With too many competitors in a particular space, it’s hard to thrive as a new startup. Many companies shut down because of the pandemic. Some of the ones that stayed afloat were taking measures to just survive. Now, these companies are shifting their strategies to re-build and grow.
This means there’s a huge gap in the marketplace. Entrepreneurs will find many areas they can create a business that has few competitors. That leaves you with less risk and worries that keep you up at night.
Timing is Right for You
All of us had more time than we knew what to do during the pandemic. A lot of people lost their jobs, were forced to work fewer hours or realized that they were unhappy where they were. Some found other ways to create streams of income and make money that utilizes their skills and passion.
Starting a new business is hard regardless of the timing. The difference is that you and many new entrepreneurs have had time to put into planning a business. With a great plan and effective strategy, becoming a successful business is more likely.
Customers have unmet Needs
You might think that because of the pandemic, people have tightened the belt around their bank accounts. The savings rate during the pandemic did indeed increase during the pandemic to a record high of 33.7% in April 2020.
That’s built up quite a bit of pent-up demand for certain products and services. A lot of customers have been displaced because the businesses they bought from were closed down either permanently or temporarily.
If you can find these customers and grow your brand awareness, then you should be able to build a solid customer base.
Capital is Available
Many investors put a pause or withdrew their investments during the start of the pandemic. They are only starting to get back to investing and looking for good bets. Since fewer entrepreneurs are pitching their company, there’s also less competition. Securing funding to fund your business may not be as hard as you think if you have a great strategy for a new endeavor.
High Number of Talent
As mentioned, many people lost their jobs during the pandemic. They were either let go because their industry suddenly fell apart or had to resign for family or personal reasons. There are a lot of experienced workers that aren’t working.
If you’re starting a business now, you’ll need talented individuals to build it. You’ll have a greater chance of finding the right people for your company. Competition for these workers could potentially below too. That could allow you to make great hires at a good price.
Be your own Boss
Working for yourself is a perk of starting a business. A startup often takes long hours and working weekends to build and grow. But eventually, you might be able to choose your hours and where you work from. As the founder, you also get to build the team around you and make the key decisions that drive your business. If these are things that interest you, then it could be the right time to start your business.
Examples of Recession Born Companies
Some of America’s most successful companies were started during a recession. Here are some of the examples of ones that didn’t let market instability stop them from starting their business.
Microsoft
A 16-month recession started from the oil embargo and stock market crash from 1973 to 1975. Bill Gates and Paul Allen started their computer software business on April 4, 1975. This was just a few days after the recession was officially considered over. It took the pair about a decade to launch an IPO that made them billionaires.
Electronic Arts
Trip Hawkins left his job at Apple to launch the video game software company during the 1981-1982 recession. Despite double-digit unemployment rates and an energy crisis, Hawkins didn’t stop with his dream of building Electronic Arts. Today, the company is among the leading providers of computer and home console games. Its market value is around 33 billion with over 10,000 full-time employees.
Uber
Travis Kalanick and Garrett Camp launched their ride-hailing app in March 2009. The idea started when the founders couldn’t find a taxi while in Paris, France. Since its launch, Uber has grown into an international company. It also expanded to provide food delivery and bike and scooter share service.
Mailchimp
This company grew rapidly during two different recessions. Mailchimp launched in the early 2000s as an inexpensive email software alternative to other competitors. This was during the dot-com recession that happened in 2001. The company focused on large corporate clients but had to shift its focus during the Great Recession. Mailchimp adjusted its business model to a freemium model which grew its user base by almost 500% in one year.
Warby Parker
During the Great Recession from 2007-to 2009, Warby Parker became a highlight of successful entrepreneurship. They set out to solve the problem of ordering affordable, fashionable prescription glasses online. The difficult economic times lead to large numbers of customers visiting Warby Parker’s website. The company is a thriving business that’s now valued at $1.75 billion.
Business Opportunities to Consider
By leveraging the changes that happened over the last two years, certain ideas have the ability to be long-term sustainable businesses. Here are a few business ideas that have the runway for this new post-pandemic world below.
Start an Online Store
People were already buying products online before the pandemic. Since then, these behaviors have increased as nobody wants to drive to a physical store, wait in lines, and go back home. The ease and comfort of shopping with a few clicks to have their products show up at their homes are more ideal.
Dropshipping is one way to take advantage of this jump to online shopping. With this type of business model, you don’t actually keep any inventory on hand. You send your customer’s order to the manufacturer to fulfill, making you the middleman. It’s an inexpensive way to start a business.
Certain e-commerce platforms will charge a monthly subscription to use. If you want access to tools like an email service provider or landing page builder, there’s an upcharge. Still, you’re only looking at about $50 a month to build your new store. eBay and Etsy are platforms that you can leverage without any up-front costs. Of course, to build your personal brand you’ll need to run online ads or create content to drive traffic.
Consulting for other Businesses
So you’ve worked ten years in leadership roles or have put together huge mergers and acquisitions. Why not strike out on your own with the area you’re passionate and knowledgeable about? Starting a consultant business can be done on your own. You can use the network that you’ve acquired through years of working in your area of expertise to help find clients.
Many businesses don’t have regular employees to help with all aspects of running it. They can’t justify hiring someone to do their bookkeeping, social media, etc. Or they might have a special need such as building a new software system to manage inventory and sales. These types of one-off projects or support are where consultants come in and fill the gap.
Open a Food Truck Business
Opening up a brick-and-mortar restaurant even outside pandemic times was a risky venture. A more practical way to get into the food business is a food truck. You’re not stuck in one location and you can move around to get to your customers.
Consumers have increased interest in buying food from food trucks over the years. It’s not only trendy but fulfills the demand for affordable, high-quality food. Food trucks can be purchased or rented. You can try moving around to different places at different times to test out where you get the food sales.
Home Improvement
People were spending a lot more time in their homes over the pandemic. That led to increased interest in upgrading and maintaining their properties. Buying a new home in most areas of the country is challenging. With a shortage of inventory, increased costs, and rising inflation, people are also looking at how they can improve what they have.
Big repair jobs and projects are more than the average homeowner can tackle. So if you’ve worked in the construction industry, helping consumers remodel their homes might be up your alley. The best target markets include parents, new homeowners, or remote workers.
Reselling Products Online
Fulfill your passion for clothing or vintage items by starting an online reseller business. It takes time to build up this business into a full-time gig but could be very lucrative. Start out by looking at local thrift stores, flea markets, and yard sales.
You could start your online store by using websites like Poshmark to sell your items. Once you’ve built up the business, transition to your own resale website.
Tips on Starting a Business
Creating a successful, new business in a post-pandemic world is possible. The key is having a great plan and strategy. Here are some tips on what you should do to increase your chances of success.
Target your Market
Your business model should revolve around capturing and dominating your target market. Determine who your market is and take time to learn as much about them as possible. Your business model must be defensible. That means you have the tools to win against competitors who are going after your target market.
Solidify your Communication Plan before Launch
Even existing brands had a hard time communicating during the pandemic. When you’re building your brand’s awareness from the ground up, the stakes are even higher. Good communication will effectively get the attention of your target audience.
Use every communication platform that makes sense to put your business on the map. Remember not to be too intrusive when reminding your target of your existence. Good creative marketing and collateral will also help you stand out.
Use Freelancers and Independent Contractors
Instead of hiring staff, try to fill your employment needs with freelancers. Many entrepreneurs are bootstrapping to start their business so money is tight. Hiring full-time employees will cost more and you need to have some knowledge of employment and human resource practices.
Once you’ve started to scale your business, hiring more staff will start to make more sense. Freelancers and independent contractors are also great to use when scaling. It typically takes time to find employees and some may need to be trained up for their roles. Freelancers tend to be ready to plug and play into a business.
Save on Costs when Possible
When starting a business there are a lot of hard costs you’ll incur. For example, the cost of creating an LLC or partnership is set. But there are other costs that you have more control over. Unless you’re needing a dedicated workspace, try starting your business from your home.
Instead of traveling for meetings, you can set up virtual meetings. Buying brand new equipment can add up costs fast. Look for used equipment instead to save money. By reducing your costs, your money will go longer. That’s especially important when you’re not breaking even yet.