Why start a business now?
When the pandemic’s dust settles, some new business owners will look back at 2021 and feel they seized on the perfect time to start their venture. Here are a few reasons why.
Supply is low, demand is up
Both struggling and closed businesses have created a void. Forbes reports that nearly half of all small businesses may close permanently as the second and third wave of Covid-19 cases and subsequent restrictions take hold.
Source: Alignable via Forbes
Sadly, no one knows how long the pain will last for these small businesses. A new poll conducted by the U.S. Chamber of Commerce and MetLife found that 62% of business owners believe the worst is still coming.
“We are sorry that we had to close,” laments the owners of Nook & Cranny gift shop in Islip, New York. “But with all the chaos going on in the world these days, it has been the best decision.”
Meanwhile, consumers still crave services like haircuts, food prep, lawn care, house maintenance, beauty treatments, exercise, and entertainment. Entrepreneurs have seen the need and are stepping up to meet it. They’re addressing the unfilled consumer demand as well as brand-new consumer needs that have arisen out of the pandemic. And, admirably, they’re launching businesses to replace or supplement their own impacted income.
For example, Ian Oestreich from Wisconsin was laid off early in the global health crisis. So, in March 2020, he started Curbside Bicycles, a mobile bike-repair shop, tuning neighbors’ bikes for less money (and hassle) than local brick-and-mortar establishments. In no time, he’d landed hundreds of jobs, hired employees, and partnered with other local businesses to continue scaling up.
Others are using Foodnome, a marketplace helping home cooks prepare and sell their unique meals to local foodies. Home cook Vija V. is one of them, whipping up soul food for locals in Moreno Valley, California.
“OMG the FLAVORS!” gushes one of her customers in an online review. “I love Vija the owner she brings a smile to my face I love her energy and her recipes.”
Foodnome has seen a 59% MoM growth consistently throughout 2020 and shows no signs of slowing as more people learn how to find — or provide — certified home-cooked meals.
Having a safety net is so important, and starting a business is one good reason why. When things go sideways, you can provide for yourself and others.
Consumers are “revenge spending”
Yes, some folks — around 39% of Americans — saved their stimulus checks. But others are partaking in what some experts call "revenge spending." New businesses can cash in on this trend.
Consumers want retail therapy — a counterbalance to the doom and gloom. China and South Korea luxury retail has rebounded, indicating people representing the “top arm” of the K-shaped recovery may save now and splurge soon, when going out becomes safer.
McKinsey calls this “exuberant consumerism.” Whatever you choose to call it, you’ll operate at an advantage if your envisioned business model serves this segment.
Be the captain of your fate
Some un- and underemployed people have voluntarily begun a new life as a business owner, over the uncertainty of employer instability.
Among workers, 68% said that general (perceived) employer mistreatment during the pandemic had incited them to consider leaving their job.
Trader Joe’s leaders experienced this firsthand. In April 2020, the grocer made headlines — and not the good kind. The brand made subpar efforts to protect its frontline workers from the novel coronavirus, drawing criticism. Quickly, the company turned things around and, within two months, had earned a spot among the top three retailers on Ipsos’ Consumer Health & Safety Index. Sadly, the fumble had cost the retailer valuable, talented employees.
Instead of despairing, many of these trailblazers became business owners. Nick Wolny is a prime example of this, quitting his job mid-pandemic and selling his knowledge online. And so is Fortune magazine’s (now former) editor Polina Marinova, who bid adieu to her powerful, high-profile gig in the spring of 2020 to start her own thing.
These fearless leaders make up the next generation of employer firms. According to The Economist, the 2008 recession prompted a decline in high-propensity business applications (that is, formations of entities likely to become employers). By contrast, this year’s entrepreneurs are starting ventures that appear to be future employers:
Source: The Economist
Starting a business now lets you determine your own trajectory and establish your own corporate culture from the start. You’ll be the captain of your own fate.
Tip: Be sure to include “bravery” among your corporate values, because it’s true.
(Back to Top)