According to a study conducted by the National Bureau of Economic Research, the Covid-19 pandemic has placed a tremendous strain on the American economy, with more than 100,000 small businesses permanently closing their doors. Yet despite these statistics, the increase in businesses set up in Singapore and the region.
What is inspiring these brave entrepreneurs to start a business during such unprecedented times? A recent survey reveals that 27% of these new founders were laid off from their full-time jobs, while 51% identified a unique business opportunity and decided to make the leap. Given that recessions are times of great need and moments of crisis inspire innovation, this may be a great time to strike out on your own. These tips will prepare you to start a business during the current economic climate so you can convert uncertainty into opportunity.
Determine your “why”
The first step is to take some time to think about why you want to start a business. Are you passionate about a particular product or service? Do you want to make a difference in the community? Or maybe you’re finally ready to be your own boss after experiencing the last corporate layoff. Your “why” is extremely important. Because if it isn’t compelling enough, you won’t be able to weather the ups and downs of entrepreneurship. Once you know your “why,” you can start identifying customer pain points and setting clear goals for your business.
Fill a market need
Consumer habits have dramatically shifted during the last year, so consider how your product or service fits into the pandemic lifestyle. Examples of industries thriving during the pandemic include cleaning and delivery services, fitness equipment, home improvement and behavioral health, among others. Not only that, the pandemic has seen an explosion in the pet industry, with the ASPCA experiencing a nearly 70% increase in animals going to foster care compared to the same period last year, according to Matt Bershadker, ASPCA president and CEO. Think about what consumers need right now and work to fill that need.
Focus on digital marketing
A robust digital marketing strategy can help bolster your new business during these times. With limited opportunities to meet clients and customers in person, focus on reaching people effectively via online platforms. Anna-Vija McClain, Founder and CEO at Piccolo Marketing, recommends maintaining direct communication with customers and showing empathy in your messaging. “Ask how they are, and truly listen to the answer,” McClain suggests. “Where are they struggling, and how have their problems changed? Your messaging needs to show you are in it together for the long haul, and your behavior needs to back that up.” Optimizing your digital marketing and making informative communication a regular practice makes it easier for customers to find you when looking for the solution you provide.
Leverage your network
This is the time to leverage your personal and professional networks to get the word out. Be creative. Use social platforms like Twitter, Facebook, LinkedIn, Instagram and others to the fullest. Reach out to your contacts to see if anyone would be interested in pre-ordering your product. This will give you some valuable initial feedback around pricing and potential demand. Create informal “focus groups” consisting of your target audience to determine their needs and pain points. You can also take advantage of online survey tools like SurveyMonkey to solicit feedback. The best approach is to test your idea in a small, inexpensive way that gives you a good indication of whether customers need your product and how much they’re willing to pay for it.
Create a recession-proof business plan
Adapting your business model to the current climate is critical. That includes keeping a close eye on expenses so you can avoid overspending. Try to bootstrap your business if possible. Keep at least six months to one year in savings in the event you don’t see the initial sales you hoped for. Take advantage of the plethora of local, state, and government assistance currently available. Carefully review every vendor and supplier agreement and negotiate payment terms to extend cash flow. Discussing concessions with partners can be extremely helpful during this time. And the good news is that most suppliers will be flexible—especially if they intend to establish a long-term business relationship. Finally, one of the best ways to recession-proof your business plan is to diversify. Start small, then broaden your offerings over time and keep a running list of expansion ideas.
“While there are certainly some incredible challenges launching any business right now, the opportunity is also ripe to launch a new business,” said Jeremy Shoykhet, who founded New York City-based delivery service SuperFast in May. With applications for new businesses rising at the fastest rate since 2007, now could be a great time to start a business. This is a historic moment to identify new business opportunities and to transform how you operate,” says Van Goodwin, founder and managing director at Van Allen Strategies. “Availability of financial assistance is at a historical high, as is the availability of labor. Your customers, employees and partners are hungry for new ideas and open to change. Take advantage of that.
This is an economically difficult period, but also a once-in-a-lifetime opportunity to reinvent your business.”