The COVID-19 pandemic has had a significant impact on all of our lives, and few would deny that 2020 has not been the best of years. Whilst countries across the world have dealt with a variety of lockdowns and social distancing measures, it seems that the tide of economic problems has yet to fully come in.
Although financial data supplied by the UK’s Office for National Statistics (ONS) shows that the country’s economy rebounded to leave recession during 2020’s Q3, analysts remain concerned that the economy could shrink significantly as lockdown measures are renewed.
With this uncertainty in mind, it might not seem like an appropriate time to start a new business – yet in reality it could be among one of the best. Here we look at some of the reasons why this year’s drama could make 2020 an ideal time to start a new venture.
1. There is less competition
Recessions are tough on established businesses, that much is for sure. During 2020 alone, UK high street stalwarts such as Arcadia Group, Debenhams, Edinburgh Woollen Mill and the UK’s arm of lingerie retailer Victoria’s Secret have all fallen into administration – proving that size is no defence to financial problems.
Of course, business failure is bad news, but it presents opportunities to those new businesses that can innovate and circumvent the problems faced by their better-established competitors. Making a market entrance at a time when other comparable businesses are firefighting could give your own venture a real boost.
2. We need innovation
Desperate times call for desperate measures, as illustrated by the rapid research process conducted by Oxford University and the likes of big pharma companies such as Pfizer to develop a COVID-19 vaccine.
When a problem presents itself, the business community is often among the first to rise to the challenge and attempt to solve it. This has certainly proven true during the pandemic, with firms offering local food deliveries in place of supermarket shopping, and others innovating by creating online content and resources for those working and learning from home.
Perhaps the most compelling reason to start a business during a crisis is that the world needs ingenuity. This pandemic has positioned new and unprecedented hurdles in our society, and if you or your business can cross them, then you stand to do very well indeed.
3. You can still equip your business for success
When considering starting up a new business, entrepreneurs often make the mistake of thinking that the time is not right since they won’t be able to access the infrastructure and support they need. In reality, a recession or even a global pandemic won’t stop you from equipping your business to succeed – provided you choose the right partners.
For one thing, you need to choose your suppliers or clients carefully – and make certain that your payment terms are robust enough to protect your fledgling business in the event that they succumb to the pressures of an economic downturn. Even with them sorted, you’ll still need to find a reliable payment solutions provider such as UTP Group and their full complement of eCommerce payment processors and in-store card machines.
With the right combination of supply, demand, and business solutions, you could be doing your bit to beat the recession!
4. Your business will be more resilient
Another good reason to go for your business goals during tough times is that doing so will strengthen your company. Firms that are established during a downturn are generally resilient, and better prepared to face down issues in the future than their good-times competitors.
Trial by fire sounds scary, but it makes a lot of sense in the business world. If you start your firm during a recession, you’ll have to be both bold and careful in equal measure to make a success of yourself. From financing to sales and aftercare, if you can make it work during the very worst periods, you’ll thrive when better times come back around.
5. Inspiration from companies that started in a recession
As it happens, some of the world’s best-known brands started during recessions. They went on to generate billions in revenue, giving away precious little about their humble beginnings. Arguably recessions create an appetite for change, and these businesses capitalised on that trend to their substantial benefit.
- Uber and Airbnb both set up shop during the global financial crisis of 2007 to 2009. Their offering of cheaper travel in comparison to better established taxi and hotel providers appealed to consumers with reduced spending power – showing that a recession is an opportune time to start doing things differently.
- Microsoft started out in 1975, during a period of high unemployment and stagnant economic activity throughout the US. Whilst its initial phase did not see a mass market home computing solution, it’s foundations in a period of economic uncertainty saw the company create leading products at affordable price points.
- FedEx began as a university project during the 1969-1971 recession, providing a fast turnaround delivery service that blossomed into a business with yearly revenues exceeding $60 billion.
- General Motors didn’t start during a recession, but they did use the collapse of the early 1900s to support their grand expansion plans. With economic uncertainty driving many players out of the market, GM bought up struggling manufacturers to strengthen their own production roster.
6. Make the best of a bad situation
Outside of the doom and gloom of 2020, there are opportunities to be exploited and business milestones that can be achieved. Start-ups built during tough times are leaner, meaner, and more efficient than comparative businesses whose foundations aren’t rooted in such challenging circumstances.
If your aim is to start a new business, if you’ve had an idea about how to improve on a product or service that’s fallen victim to COVID-19, or if you want to expand your existing venture, now might be the best time to do it. Business in 2020 takes tenacity, motivation, and a strong complement of reliable partners – but it is possible. The economy, consumers, and indeed the world need renewed economic activity right now, could you be part of it?
