A 2018 study conducted by Vistaprint showed that 62% of Americans want to start their own business. You might be one of them. However, with COVID-19 causing a challenging economic environment and supply-chain issues that loom large over everyone’s lives, it can feel hopeless trying to figure out how to launch a startup in 2021. It doesn’t have to be hopeless though. Believe it or not, there can be substantial benefits to launching a successful business right now.
Hardship Creates Resiliency
It may seem impossible that a recession could strengthen a startup business, but there are successful and enduring businesses that began their startup journey during or right before an economic downturn. Examples include Uber, Slack, Square, WhatsApp, and Instagram enduring the 2008 recession; and General Motors, IBM, and Disney which came right before the Great Depression. This follows a very simple principle that being able to withstand hard times puts a startup founder’s business in a better position to reap the benefits of the future economic uptick. If your business is able to survive during a pandemic, it is likely to thrive under normal economic conditions and you will learn a lot along the way about how to weather the next storm.
Starting a business in the current economic downturn also forces a budding entrepreneur to start small and grow slowly. If you’ve wanted to start a business for a while but it just hasn’t come to fruition, it’s likely that you kept being discouraged by the sheer amount of research, fundraising, and work it took on top of your current day job. However, COVID-19 has drastically changed a lot of our work habits. So, if you’re working from home and you have a lot more time and energy on your hands, now is the time to make meaningful progress with your business idea. Still, this doesn’t mean that your startup business will or should blossom quickly. The opposite is true. Use the slowness of being at home all day to set small, achievable goals. To that end, consider what’s absolutely crucial to your business and forego anything else. Some tips for a successful startup include:
- Run your business out of your home, rather than getting a storefront right away.
- Build up a local clientele through word of mouth, online advertising, content marketing, and social media.
- Spend as little money as possible.
- Build slowly and take sustainable baby steps.
Speaking of baby steps, economic downturn gives a business several opportunities to keep costs low. This makes sense because start-up costs during a recession are significantly lower than they would be during a boon. Many of the fixed costs associated with starting a business—real estate, advertising and marketing, and salaries—have substantially decreased. So, the barrier of entry is lowest during a recession. CEO and co-founder of $500 million NerdWallet, reflects that his experience of launching a business was made possible partly because of the economic conditions of 2008.
Access to More Talented Workers
COVID-19 has caused several businesses to let go of their employees. This leaves a vast market of talented and qualified people looking for work. Nearly half of workers in the United States are employed by small businesses. Your business could be an important source of job creation in your community. Moreover, locally owned businesses tend to create a better working environment for employees. Studies showing that workers at locally owned businesses are more committed to their job than workers at bigger companies suggest that small businesses contribute significantly to community building and employee satisfaction.
Small businesses are also better able to adapt to changes in the economy, leaving them with less formidable competition in a downturn. While bigger companies are bogged down with restructuring and laying people off to respond to the economy, businesses like yours will be in a league of their own (and poised to take their pick from a new pool of laid-off people).
Take Control of Your Career
For so many people, the economic fallout from COVID-19 has been a wake-up call about the instability of the jobs we may consider extremely stable. When large companies must adapt to an economic downturn, the employees are the first to go because their operational costs are harder to quickly manipulate. Launching a startup company certainly isn’t a foolproof way of avoiding job loss, but if you’re an aspiring entrepreneur, let this recession motivate you to take control of your own employment.
A good way to pursue owning a business while reducing risk is to buy a franchise. This is especially useful for aspiring business owners with little experience in an industry.
What is Franchising?
A franchise is a joint venture between a franchisor (the original business) and a franchisee (the buyer of the franchise). Under this agreement, the franchisor will sell the right to use its name, ideas, and business model to sell its products through individually-owned franchises. This is a good way for a new business owner to enter a competitive industry while the original business is able to expand its reach.
Benefits of Franchising
These are the ways that buying a franchise is beneficial to you, a new business owner:
- Training – Your franchisor will offer you training on how to operate your business and consistently provide your goods and services.
- Pre-opening support – Franchisors help you select your site and offer accounting, software, and other operational needs.
- Post-launch support – After the launch of your startup, you are coached through processes like service and personnel changes.
- Group advertising opportunities – Under a franchisor, you have access to professional promotional material that is difficult for most small businesses to attain.
- Personal growth – By owning a franchise with a proven business model, you develop your own business skills by learning as you go.
Perhaps the most valuable thing you gain from owning a franchise is being able to benefit from the established reputation of a larger company while operating on a local and flexible scale. This makes the franchise model of business ownership especially resilient in times of economic downturn. Franchise Direct calls franchising “a strong choice for a pandemic business world.”
Home Improvement is Thriving During COVID-19
Consumer interest in home improvement grew 140% under quarantine according to online searches for the topic. It makes sense. COVID-19 has forced people to spend more time at home and given people more time to think about the various home improvement projects they may have otherwise put off.
The Glass Industry
A corner of the home improvement industry is the glass industry. It is a “sleeper industry” that, despite its large net earnings potential, is traditionally closed off. Entering an industry like this one would be very beneficial to a new business owner. Franchising under an established company is an effective way to do this. The Glass Guru Franchise Systems, Inc. has been a leader in this industry since 2007. The Glass Guru is one of the fastest-growing brands in window restoration, repair, and replacement.
Looking Ahead: The Glass is Half Full
One way or another, we are going to make it out of this pandemic. Now is the time to establish a small, steady startup company that will come out on the other side with a dedicated workforce, a loyal customer base, and a resilient foothold in the community. Sources: Vistaprint Newsroom. Expectations vs. Reality: What’s it Really Like to Go it Alone? https://news.vistaprint.com/expectations-vs-reality Forbes. Starting a Business: Now’s the Time to Do It. https://www.forbes.com/sites/forbesbusinessdevelopmentcouncil/2020/08/03/starting-a-business-nows-the-time-to-do-it/?sh=8f7de17f1887 Bench. Fixed Costs: Everything You Need to Know. https://bench.co/blog/accounting/fixed-costs/ Inc. Why, Yes, You Can Start a Business Right Now. https://www.inc.com/heidi-zak/why-yes-you-can-start-a-business-right-now.html Inc. 5 Reasons Now is the Best Time to Start Your Own Business. https://www.inc.com/geoffrey-james/5-reasons-now-is-best-time-to-start-your-own-business.html Entrepreneur. Why Right Now is the Best Time Ever to Start a Business. https://www.entrepreneur.com/article/357003 CNBC. Why Now is a Great Time to Start a Business. https://www.cnbc.com/2020/04/15/why-now-is-a-great-time-to-start-a-business-nerdwallet-ceo-tim-chen.html Small Business Trends. Small Business Statistics. https://smallbiztrends.com/small-business-statistics Fundera. Local Shopping Statistics. https://www.fundera.com/resources/local-shopping-statistics Investopedia. What is a Franchise? https://www.investopedia.com/terms/f/franchise.asp#:~:text=A%20franchise%20is%20a%20business,that%20grants%20licenses%20to%20franchisees. Franchise Direct. Franchising is a Strong Choice for a Pandemic Business World. https://www.franchisedirect.com/blog/franchising-is-a-strong-choice-for-a-pandemic-business-world CNBC. Here Are the New Businesses to Start During the Coronavirus Recession. https://www.cnbc.com/2020/05/12/here-are-the-new-businesses-to-start-during-the-coronavirus-recession.html The Glass Guru Franchise. Get to Know Us. https://theglassgurufranchise.com/about-us/