Although starting a business in the COVID-19 epidemic can be risky, depending on your business idea, it may also offer you some benefits. We have compiled a list of pros and cons that you should consider before making your final decision.
Businesses are experiencing
Businesses are experiencing a lot of uncertainty right now. Many are facing closure or in dire need of large bailouts. Others are also in the process of mass layoffs.
Businesses that are still in operation will need to pivot, adjust budgets and create new forecasts in order to maximise cash flow and minimize burn rate.
However, as millions of businesses reevaluate their business models and strategies they have few conversations that focus on what it is like to start your own business in this current environment.
You might have been thinking about starting a business for years. Or maybe you just got retrenched and are looking to find new opportunities. Or perhaps you’re trying to pivot your business in a different direction. Now is the time to decide how to get started.
Slack and WhatsApp were created from the recession. It’s not the best time to start your business. Pandemic or no, it is difficult to start one.
Let’s look closer at the pros and cons to starting a business in this time of pandemic.
1. It may be less expensive to start a business
One could open a business for as little as $100 after prolonged periods of economic decline.
The pandemic has made many things more affordable. Entrepreneurs might be able to rent less because of the shrinking demand for office space. The cost of office equipment and other necessities will likely be lower.
Keep an eye out for discounts in other areas of the business. In response to the pandemic, Facebook ads rates have dropped. These are essential tools that small business owners can use to reach a wider audience for a lower price.
2. More talent on the market
The pandemic has led to higher unemployment rates. The chief statistician for the Depart of Statistics shared that Malaysia’s unemployment rate rose by 3.9% to 610,000 people in June. This is the highest rate since June 2010, when it was 3.6%.
Although it may seem bleak, these numbers could be good news to entrepreneurs who are looking to start a business. The market is flooded with skilled and capable people looking for employment. This can only be good news for new businesses that are starting to grow their business.
This could be your chance to meet people who are looking for new business opportunities, as there are so many people out there currently unemployed or out of work.
3. The need for new solutions is heightened by the emergence of new issues
Recessions can be disruptive for the economy and force businesses to rapidly adapt to changing consumer demands. Businesses are forced to adapt and grow in response to the changing environment.
The Great Recession, for example, had prompted some resistance to excessively luxurious goods but also inspired minimalist trends in home decor and clothing.
This lesson shows that understanding the market is just as important as knowing when to open a business. You should list all the consumer needs, problems, and trends that have been caused by the economic downturn. Next, identify the relief and solutions your business can offer.
Capital raising may prove difficult due to economic fallout
Although bootstrapping is possible, most new businesses will require capital to get started. It may be challenging to secure traditional funding sources during recessions. You may have to demonstrate a track record.
Traditional lenders and funds for SMEs require that your business exists for at least one year before they will consider your application.
Remember that credit requirements and general qualifying criteria can be more stringent during recessions.
2.Expenses are being reduced, not the opposite
Most businesses will reduce their expenses when there is a recession. It’s the right thing to take, considering that consumer spending will most likely drop as well.
This reality will help you manage your business while building it.
Bottom line: Starting a business right away may not be a bad idea
It can seem extremely risky to start a business in a recession. It is important to remember to keep your costs low and your target market in mind. Your business plan should be solid.
BONUS – If you are an aspiring entrepreneur looking to start your business during this pandemic, these are some tips:
1. Find out why you are interested in this business.
Before you make any major life decisions, the big why will be a key factor. Consider why it is so important to start your business right away. Write down your thoughts and identify the milestones and goals you want to reach with your business. You will be able to better understand why the idea was born if you start with the end.
Perhaps the “why” is that you are passionate about selling plants. Your goal is to bring joy to your customers and add greenery to your community. Maybe you’ve always wanted to start your own agency after a long career in advertising. No matter what the purpose of your goal is, whether it’s personal or social, write it down and then filter them into specific categories.
Your timeline may vary depending on the goals you have. Some may be shorter than others. Beyond defining your business goals, consider what makes your business unique. Do your research on different business models and then create a business plan.
Although setting up a company is not the most difficult part of the process, it can be time-consuming. It takes more effort to consider the basics of starting a business, such as the objectives, resources, available funding, and the product/service.
After all that thinking is done, you can begin filling out forms on the Companies Commission of Malaysia website.
2. You must be very careful as every penny counts
You don’t have to spend a lot of money just because you have a budget.
Apple is one of the most important brands in the business world today. It was founded in Cupertino by Steve Jobs, one of its co-founders.
In 1976, he and Steve Wozniak developed the first Apple computer. They did this in the garage of Jobs parents. The Apple I was later sold as a motherboard to a local shop for RM2073. As they say, the rest is history.
It doesn’t have to be a bad thing to want to work for or sell cheaply. It can sometimes work in your favor and help you stand out from the rest. If you are a personal trainer, for example, you might be able to offer your services at a lower price and gradually educate people about pilates and yoga. Your services must be top-notch! Good service will earn customers a higher price.
3. Does your business serve a particular need?
The founder of most famous businesses was inspired to solve a specific need.
Grab was, for example, conceived differently from their ride-hailing competitors, Uber and Didi Ching. While both were focused on better matching demand and supply for rides, Grab wanted to improve rider safety.
As a safety precaution, passengers could share their ride progress with another person via the platform. According to CB Insights, today’s RM58 billion startup is serving people in eight countries.
Eric S. Yuan is the founder and CEO of Zoom, . He first imagined the company when he was a freshman at Chin College. He believed there was a better way to connect with his long-distance girlfriend (and wife), particularly as he hated the ten-hour train ride to visit her.
This story was the foundation for Zoom. Yuan saw the need for a video communication solution that would allow him to connect with others virtually and seamlessly.
We hope that you find this article useful and informative.