The Covid-19 Pandemic Just Might Be The Right Time To Start A New Business
By Michel Ouellette JMD, ll.l., ll.m.
Previous financial crises gave rise to high-profile companies. The spread of the coronavirus challenges entrepreneurs to meet new needs.
In March, as small businesses across the country were shutting down amid the spreading coronavirus pandemic, some creative entrepreneurs were about to open some. Their timing could not have been better.
One of these businesses, MD Ally, allows 911 dispatchers and other responders to route non emergency calls and patients to virtual doctors, to help local governments improve their emergency response systems. While it may sound crazy to start a business during an economic collapse. Though at a significantly slower rate than before, like MD Ally, new businesses are forming despite the pandemic.
Downturns or challenging times are seen as good times to start a business for two reasons:
One is, there is less competition for resources; the second reason is that whatever changes we face, positive or negative, bring up new customer needs. And customer needs are at the core of any business. For others, the timing can mean low interest rates for borrowing start-up capital, cheaper equipment as businesses sell off inventory or lower lease rates as landlords scramble to fill empty spaces.
There are going to be industries that are winners, and others that are going to be losers.
In the best of times, twenty percent of new businesses do not survive their first year. Furthermore, a restaurant or bookstore opening on a busy street faces very different risks from those of a new firm whose employees can work from home and whose customers do not need to gather. I certainly do not recommend opening a business right now that caters to business travelers, but I would certainly recommend a business that helps enable telemedicine.
Determining what customers need now, rather than before the pandemic, is crucial.
If you can find innovative ways for people to feed themselves right now, if you can see opportunities in offering solutions to the challenges that people now face, that might make sense. You just have to address these needs, whatever they may be: educating their children, working from home, managing supply chains, getting a haircut or the house cleaned, seeing doctors and therapists, entertaining themselves.
Even new restaurants might be successful if they consider the future of customer service rather than recreate old systems. Figuring out how to open “The Food Hall of The Future” may be the opportunities with the most potential to be successful.
I like to be optimistic and hope for the best.
You want to start a business now? Ask yourself these five questions first:
Have I identified a new need that customers have as a result of the current crisis? Can I serve this need in a way that is substantially better than the current alternatives? Am I qualified to solve this customer problem? If I don’t have the experience, can I hire others or find a co-founder to help me? Do I have access to funding that can tide me over until my business is profitable?
If your answer is “YES” to these five questions, do not hesitate. Open your business now.
This is the best possible time.
Michel Ouellette JMD, ll.l., ll.m.
Systemic Strategic Planning, Crisis & Reputation Management