Guest Post by Derek Goodman, Inbizability
Small businesses are buckling under the weight of COVID-19. Not only have nearly 100,000 businesses permanently closed since the onset of the pandemic, but 62 percent of small businesses fear the worst is yet to come.
Under these conditions, it’s clearly a bad time to start a business. Or is it?
Why Start a Business in a Pandemic?
There’s no denying the pandemic has been hard on industries like restaurants, traditional retail, hospitality, tourism, and travel. However, that’s not the full picture of COVID-19’s economic impact. Here are three reasons it’s far from foolish to start a business right now.
1. Demand is high
While businesses that rely on walk-in traffic and on-site services struggled to get by, other industries found themselves overwhelmed by surging demand. Beyond PPE, face masks, and hand sanitizer, these industries saw an uptick in 2020:
- Logistics and delivery.
- Grocery stores.
- Subscription services.
- Home improvement and hardware.
- Home fitness.
- Game makers.
- Distance education.
Despite their best efforts, many of these industries are struggling to keep up. That presents an opportunity for aspiring entrepreneurs.
2. Affordable startup options abound
Many of the businesses thriving right now are businesses you can run from home. Whether you’re developing a new software app, building an online store, starting a home remodeling business, or offering virtual counseling, tutoring, or personal training services, you can start your business at home to reduce operating expenses. Home businesses avoid the high costs of commercial real estate while offering certain tax deductions to small business owners.
Startup business owners can also save money on capital expenditures by purchasing used equipment. Whether you’re buying office computers, commercial kitchen appliances, or construction equipment, there’s a good chance you can find it secondhand at auctions, liquidation sales, or online. Before buying used equipment, research the model’s specs and market value and thoroughly assess its condition. Done right, buying used can save 25-50 percent without sacrificing quality.
One thing you shouldn’t skimp on is setting up your business. While you may be eager to dive in, registering a legal business entity and applying for a business bank account before your first major purchase ensures you maintain the corporate veil business requires. Without structuring your business as an LLC or corporation and maintaining separate finances, you could be held personally liable for business debts.
3. Financing is still possible
There is one drawback to starting a business right now: lending is more challenging in industries subject to Covid-19-related restrictions. However, even if you can’t get traditional funding through a Microloan or other SBA program, you can still start a business using peer-to-peer lending, equipment financing, crowdfunding, or 0% interest business credit cards. There are numerous ways to get it done if you know where to look.
Entrepreneurs in high-dollar industries can turn to venture capital and angel investors for funding, although the early-stage investment landscape is highly competitive at the moment. Startups need a clear market opportunity and plan to scale if they’re going to attract the attention of investors.
Now you know why this is a great time to start a business as long as you have a marketable idea and a strong plan. However, there’s a lot of work to do to bring your business idea to fruition. You need to write a business plan, find funding, brand your business, and more if you want your great idea to thrive.
For help getting your business started, visit OneClickAdvisor often to learn how we can help you find your path to success!