COVID-19 has forced businesses, new and old, to be creative about how they operate and how they offer goods and services. The companies that have been able to adjust quickly are seeing business inclines, or at least the declines have not been as sharp. Some businesses that cannot adapt their business model have been forced to temporarily close their doors and hope that they can reopen soon.
It is difficult for business owners, but it is still possible to thrive during this challenging time. Creative entrepreneurs can make adjustments and create companies that may be viable for years to come.
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Is it a good time to start a business during COVID-19?
Entrepreneurs who have started businesses during the pandemic credit the disruption with the opportunity to rethink their lives and what they want for the future. Shedding the 9-to-5 grind for more independence, autonomy, and decision-making authority was the right move for those who ventured out on their own last year.
Employee Identification Number (EIN) application rates were higher in 2020 than they were in 2019. The Wall Street Journal has reported that Americans are starting new businesses right now faster than in the past decade. That type of shift could signify that employees who may have lost their jobs or been temporarily laid off are taking this opportunity to finally start the business they have been considering for some time.
For those who see some of the problems of COVID-19 as opportunities, now might be the perfect time to pursue a business venture that you have been considering.
Are there advantages to starting a business during the pandemic?
Economic downturns are often generally good times to start a business if you can get what you need to get started. First, there is lower competition for resources, which can work to your advantage. Second, with the changing economy comes changing customer needs. If you can find a changed customer need that you can fulfill, then your business is more likely to survive and thrive through the pandemic and beyond.
Some of the most prosperous businesses known today started during economic downturns, including Disney, General Motors, Hewlett-Packard, Uber, Venmo, Airbnb, and Microsoft. Being successful in tough times often means that you can do very well when the economy is on the upswing, too.
Interest rates are very low right now. That means that if your business venture needs some initial funds to get started, now might be a great time to use those resources at a lower cost.
What challenges are new businesses facing during COVID-19?
Starting a business at any time can be difficult, but COVID-19 has created some new challenges for those who want to start a company now. Some of the most obvious challenges include:
- Cash flow and money management issues. As no one really knows how COVID-19 will affect specific types of businesses, ensuring that you have enough to get started and then to maintain reserves can be a significant challenge.
- Adjusting to client needs. Your customers may not need the same things that they did pre-pandemic. For example, creating a sit-down restaurant right now may not be an option.
- Offering services in a safe way. Customer confidence in safety is lower right now in many areas. How can you offer your goods or services in a way that will provide customers confidence that they can be safe while enjoying what your business has to offer?
Legal issues are also a challenge right now. The Rocket Lawyer COVID-19 Legal Center can help you address these concerns as you get your business off the ground.
What types of businesses are doing well during COVID-19?
Not every business is struggling during this time. COVID-19 has served as the “jumping-off point” for some industries. Examples of industries that are thriving include the following:
As people are starting to better understand how COVID-19 spreads and the importance of maintaining a clean workplace and home, they are increasingly turning to cleaning services for help.
More people want things delivered today than in previous years. Delivery services of any kind help allow people to stay safely in their homes.
As gyms close, use of home fitness equipment and classes are on the rise.
Landscaping and Home Remodeling
Many people are using this time to spruce up their yards and their home space. As they are staying home more, they realize projects that need to be done.
Starting a business during COVID-19 means that you need to cater to customer needs both during and after COVID-19. Preparing well with a Business Plan and thinking about both today and over the long-term will help set your business up nicely for the future.
Still have questions? Ask a Rocket Lawyer On Call® attorney about your specific situation for fast and affordable legal advice.
This article contains general legal information and does not contain legal advice. Rocket Lawyer is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.