COVID-19 has left a severe dent in the global economy. Millions of small businesses started and closed down. But despite alarming statistics that paint a bleak picture for entrepreneurs, applications for new businesses have still been on a high.
In a situation like this, one may question what inspires these young entrepreneurs to try their luck with entrepreneurship during such challenging times?
A study recently revealed that 27% of these founders got laid off from their jobs, while 51% found a unique business opportunity thanks to COVID-19. Moments of crisis inspire true innovation, and this may be the perfect time for you to try your own luck.
The following considerations will help you transform uncertainty into opportunity in the existing economic climate.
Decide How You’re Going to Operate
One of the foremost decisions you need to make is how you’ll structure your start-up. The options you have are:
- A Limited company,
- A Partnership, or
- You could operate as a Sole Trader
Each of these business structures has pros and cons, so this decision is purely circumstantial. Moreover, it is also based on what you plan to achieve. It’s always a good idea to get advice from a solicitor on the several options you have to decide which one is the best. They can help you through the necessary steps you need to take to create a structure.
It’s also essential to decide how your business will operate on a daily. Where is your team going to operate from? How will you communicate with your customers? How many resources will you need?
Given the current situation, it would be best to decide how you’ll function during the pandemic and how your team will fully transition to the workplace once the threat of the virus has subsided.
Since there’s so much uncertainty right now, deciding how to run a business can be a stressful ordeal. Because of this, it would be a great idea to be certain of a few things right now. One of the best ways to do this is to have clear contracts with suppliers and customers. This can let you predict costs and revenue promptly, which will also give your business financial security in the long run.
Commercial agreements can be complicated, and they must reflect your business’s needs accurately. Even though there are templates that you can use, they will not be tailored for your needs. If you have the choice, choose a bespoke agreement.
Prioritize Digital Marketing
An effective digital marketing strategy can bolster your business to new heights during the pandemic because COVID-19 has made several marketing channels irrelevant. Channels like out-of-the-home (billboards), radios (people mostly listen to radios when they’re driving), and direct marketing are no longer effective. Businesses that still rely on these channels have seen a large drop in brand recall.
On the other hand, brands that focus on digital marketing from the get-go have made it clear to their customer base that they’re in the game for the long haul. Online marketing can ensure your customers know about you if you’re starting a business during the pandemic.
Improve Cyber Security to Safeguard Against Hackers
Several organizations worldwide have shifted employees from on-site to remote work. This has increased the chances of data breaches. As a business owner, you will have to ask employees to participate in data and information protection. Encourage your employees to avoid using their personal laptops for work since they don’t have the necessary security protections.
Ensure every resource has a strong 16 character random password; moreover, ask your team members to lock their computers when they’re AFK.
Create a Recession-Proof Business Plan
If there’s one thing that the pandemic has taught us, it’s that life is unpredictable.
Creating a business model that can adapt to the current conditions is imperative. That also means that you keep an eye on your expenses and avoid overspending. Bootstrap your business, and secure at least six months’ worth of operational costs in your savings. If you lose your sales funnel, you should still have enough money to pay the people who work for you.
Carefully curate every supplier and vendor agreement and negotiate terms that extend your cash flow. Discussing concessions can be helpful during challenging times like these. Most suppliers are likely to be flexible, particularly if they want a business relationship for the long run.
And lastly, one of the best ways you can recession-proof your business is by diversifying. If you post reviews of smartphones on your blog, it’s never too late to post a Mitsubishi outlander review. Broaden your offerings and keep expanding your customer base.
Limit Your Risk
There’s a certain amount of risk every entrepreneur must accept when they’re starting a business. But by all means, limit the risk you have to take on as much as you can. You can do this by setting up a limited company, which means you won’t be personally liable for the business’s debts. You can also fund the business by acquiring a bank loan or opt for third-party financing.
Moreover, you should also limit the legal risk you take on. Get a solicitor to draw up the terms and conditions for your business so you can minimize the chance of legal action from your customers if anything goes wrong. It is always a good idea to get advice about any legislation that you need to comply with.
Stay the Course
The existing financial climate can cause high anxiety levels since several people are struggling to make ends meet. However, one must also remember that the market will eventually recover – it always has. Try not to think short-term and instead focus on your long-term entrepreneurship goals.
The year 2021 and possibly the year 2022 will go down in history for being the most challenging. Now is the time to prove your mettle and to steer clear from the 9-to-5 trap. Plan rigorously and execute to bring your entrepreneurship dreams to life. The year 2021 can prove to be generous, depending on the business model you follow.
The question is, are you ready to take on the challenge?
Main Photo by Monstera.