By Lexie Lu
Starting a business at any time is a challenge. There are many different parts to juggle. Getting off on the wrong footing can harm your reputation, and the last thing you want to do is lose money without seeing any returns. Opening a new company during a global pandemic presents pros and cons outside the norm of running an organization.
McKinsey & Company surveyed 1,000 small business owners to gauge how they’re feeling during the COVID-19 crisis. When asked if the pandemic affected their businesses, about 56% of owners stated it had, and another 54% indicated their income was negatively impacted. However, some companies thrive during difficult times, such as essential brands. If you own a grocery store, delivery service or medical protective supplies company, you’re probably ahead of the game.
Based on what most business owners are feeling, should you wait to start your business or go ahead? There are some pros and cons to both choices.
The Pros of Starting a Business During a Pandemic
If you’re looking to start now, your business’s chances of success may be better than you anticipate. Here are some positive aspects you can expect:
1. Reach More People
More people are working from home and avoiding unnecessary outings. Your online marketing efforts will likely reach a wider audience than ever before because the time consumers spend on the internet has increased accordingly. Now is an excellent time to test the waters without spending a lot on advertising.
2. Start with the Right Model
No matter what type of product or service you sell, begin with a model that makes your customers feel safe. Your new business can thrive during a pandemic if you consider your audience’s emotions. Some people are scared to enter stores, so offering curbside pickup or delivery may put you ahead of competitors who don’t usually operate on that model.
3. Tell a Story
People love it when you entertain them. If you tell them a story, you distract them from their current concerns. Even if you slate the company’s grand opening for later, you can start sharing snippets of why you’re going into business now. Use social media platforms to spread the word about your new business. Ask friends to share your company on Instagram and Facebook and facilitate word-of-mouth marketing.
4. Control Your Destiny
When governments force business shutdowns, employers have to make tough choices, such as laying off workers or reducing hours. Many employees find themselves floundering and unable to get through to unemployment offices for help. Starting your own business allows you to control your income to an extent.
If one technique isn’t working, you have other creative outlets to bring in revenue. You can work as many hours as you want rather than suffering from an employer cutting your time. You also never have to worry about someone laying you off and doing what’s best for them rather than what’s best for you.
5. Test Your Resilience
If you can survive during a global pandemic, your business can survive anything. Starting your business now allows you to test its strength and make improvements to help you survive in the long-term.
The Cons of Starting a Business During Challenging Times
As with any major endeavor, there are some cons to starting a business during a global pandemic. Explore what you might be up against if you go ahead with your plan:
1. People May Not Be Buying
When people face primal fears, they often turn to essential things to help them feel secure. Maslow’s hierarchy of needs indicates people need to have their physiological and safety needs met first. They’ll concern themselves with food, shelter and water before worrying about other items. If your product doesn’t fit into the lower level of Maslow’s pyramid, there may not be a market for what you’re selling. You should adjust what you offer to meet current necessities.
2. There’ll Be Reduced Financial Options
Many businesses flounder during a pandemic. They may have already tapped out investors, bank loans and other financial resources. There may be limited funding for new startups, and angel investors may feel a bit gun-shy. If their established businesses couldn’t make it, how can a new company? Create a solid business plan and explain how you’ll thrive during this difficult time to sway them toward loaning you money.
3. You’ll Face Added Regulations
If your business is a physical storefront, you’ll have to consider all the added regulations for your area. Your staff may need to wear masks, and you may have to limit the number of people in your store at one time. If you want your customers to feel safe, you’ll need to take on some additional cleaning tasks, and you may need to operate on reduced hours.
Open Now or Wait?
Should you go ahead and open your business in the middle of a pandemic? Starting a new company at any time can be a gamble. Not every startup survives past the five-year mark. However, if you have a viable idea and think you can overcome the challenges, you’ll walk away with a business set up to withstand any future catastrophe.
Lexie is a digital nomad and graphic designer. She enjoys hiking with her goldendoodle and creating new cookie recipes. Visit her design blog, Design Roast, and connect with her on Twitter @lexieludesigner.