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Pundits regularly hail the benefits of starting a business during a downturn and many are now claiming it’s just as true during a pandemic.
Fortunately for entrepreneurs, a recession is already underway that may last until a vaccine for COVID-19 is found and distributed.
The often-told benefits of starting a business during a downturn include less competition, access to a wider pool of talent and cost savings on everything from financing to construction, rent and hires. Publicity is also easier to find as news outlets are hungry for feel-good stories.
Many also believe innovation is stoked because the challenges driving the hard times present opportunities to provide solutions.
Wrote Heidi Zak, co-founder and co-CEO, Thirdlove, the online bra upstart, in an article for INC., “If anything, global crises are what highlight the next generation of problems the world needs to solve to move forward — which gives rise to dozens and dozens of new companies, new markets, and new industries.”
On the downside, the pandemic packs a high level of uncertainty and is causing radical life alterations, from remote working to social distancing protocols. Linda Darragh, executive director of Kellogg Innovation and Entrepreneurship Initiative, said in a recent webinar from Kellogg Executive Education, that it’s important for new ventures to address changes in long-term behaviors over short-term shifts.
She said, “A crisis creates a change of behavior, which generates new opportunities.”
In a Q&A on Auburn University’s website, Franz Lohrke, professor of management at the university’s Harbert College of Business, said entrepreneurs can “always take calculated risks and, if they successfully tap into an important, enduring customer need, they can be extremely successful.”
Yet potential customers will be spending cautiously with the pandemic’s many unknowns. Prof. Lohrke added, “Even during a strong economy, startups need support from several sources, including customers willing to spend money, employees ready to work, and, in many cases, organizations prepared to fund the business. During the pandemic, these challenges have become magnified.”
- Why, Yes, You Can Start a Business Right Now – INC
- Covid-19’s Impact On Startups: Assessing The First Few Months – Forbes
- Amid the Pandemic, Entrepreneurs Can Still Find Opportunity – KelloggInsight
- The pandemic is a great time to start a business. Here are 3 things to do now – Fast Company
- Should Entrepreneurs Wait Out the Pandemic or Forge Ahead? –Knowledge@wharton