Starting a business in general has its own threats and challenges. Moreover, doing so when the economy is far from stable is scarier for newbies. But weighing the pros and cons and analysing the required factors could help one achieve a great deal.
Starting a business may seem daunting to someone who just wants to make money, but not to someone who aims to make a difference. The now successful entrepreneurs would have most definitely faced their own doubts and fears. But they were determined enough to chase their vision and fortunately, money followed them. Now that we are in extraordinary times, entrepreneurs should resort to extraordinary measures. The post-COVID period is giving a tough battle to the slouching economy. Several established businesses are finding it challenging to survive in tight credit markets, let alone budding entrepreneurs.
To crack the tough nut, businesses should have a clear-cut plan of cash projections and lay down a solid financial plan. They must also have a blueprint that clearly identifies their financial goals and the measures to be taken to achieve them same.
Starting a Business in Tough Times
There is no right time or wrong time to do the right thing. The world has witnessed quite a number of economic depressions, and even several bouts of deadly pandemics. But none of it kept us from progressing ahead. Businesses have always evolved and stabilized by using the right strategies even in grueling times.
It is said that the recession has already started hitting hard in the West. When this happens businesses and employees go through untold suffering as cash reserves start to diminish. Credit markets stiffen up and banks lay tougher restrictions for lending loans. Given the current scenario, it might make budding entrepreneurs think twice before stepping into a new venture.
The predominant characteristic of an entrepreneur is to weigh the pros and cons of the situation analyze the market and then launch the business. Let’s say, one wants to start a boutique business, then one should first research thoroughly the boutique business plan before proceeding further. Choosing the right kind of business that would thrive in this situation would be a classy move. A business person should understand that these tough times could actually give a huge push to the right kind of business for the following reasons:
- The competition would be relatively less in times such as this. Not many of them would enter a new business venture when the economy is struggling and a brilliant entrepreneur would definitely take advantage of this circumstance
- Not many third parties would join hands with businesses and hence the profits can remain with the sole entrepreneur and needn’t be shared
- Once a business gains customers, they are more likely to stick with the business for a longer time even after the economy improves
- Established businesses might downplay during a recession. A new venture has nothing to lose and can take make a grand entry and try its luck while the business tycoons are resting
- The cost of starting a business is much cheaper now, like the rent, furniture and other things which add to the overhead costs are given at many negotiable rates.
Although the pandemic made it difficult to get ahead with business ventures, now that we are in the recovery period, one should make use of it. The following strategies can be kept in mind before commencing a new business in the post covid era. For example, going forward with a petrol pump business plan during a lockdown isn’t an attractive option.
The first step in a business is to get the required funds. But before reaching out for funds, it is necessary to run a check over the business plan with trusted friends or business advisors. The plan should not miss out on any critical requisite or include any inaccurate assumption. The business owner can reach out both to reputed banks and to credit unions and choose the one that offers lower interest rates.
In challenging times like this, it is prudent to have a backup financial plan, just in case, the business fails to propel as expected. There should be adequate cash reserves to live decently for a period of six to 12 months in case the business fails to make any revenue or even worse lands in debt or liabilities.
It takes a lot of creativity and originality to launch a business when the market is volatile. The only key to win this race is to employ smart marketing strategies. To give the business its best chance, one has to have a clear idea regarding the products or services of the business and their respective prices, the target audience, the corresponding niche, and an exact road map to promote the business. It is also important to know the potential competitors and their marketing gimmicks. Learning this could help the business re-strategise the plans if required.
Keep it Low Key:
The adage ‘One step at a time’ goes well for first-time entrepreneurs. It is prudent to start the business small, evaluate its prospects, and then expand it further. For instance, most businesses have now gone virtual and prefer their employees to work from their own spaces. This could save them the rent for the office space. Hiring freelancers as and when required rather than employing professionals full-time is yet another way to implement cost-cutting in a new business.
Social media is at its peak now and it would be sheer injustice not to use it for marketing. Furthermore, this can be done from the comfort of one’s home without having to spend a million bucks. Also, Search Engine Optimization ensures that the particular business gains adequate visibility when customers search for products or services related to the said business.
Employing methods such as email marketing, and introducing podcasts or webinars related to the business can also work miracles to leverage the profit of the business. One can even exploit technology in a super market business which would help one in reaching their end goal.
An entrepreneur cannot set up a business by staying quiet behind closed doors. The actual business happens outside that door. It is therefore crucial to go out and network with like-minded people, potential customers, or even competitors. Taking part in various conferences related to the business, or joining social media groups such as Facebook groups can be of great help.
Save the Business:
An entrepreneur has to expect the unexpected. After having put in all the hard work and hard-earned money into the business, the next thing to do is to protect all that. This can be done by availing of appropriate insurance schemes like general liability insurance, data breach coverage, property insurance, fire insurance, etc. If any untoward event should occur, in the absence of insurance coverage, the business is sure to land in a bottomless pit. Therefore, due care has to be taken by the business owner.
It is true that the economy has suffered and is now recovering slowly. Instead of waiting for the times to turn good, it is sensible to take a big leap of faith and embark on the dream business. But while doing so care has to be taken to perform the necessary due diligence. After all, no one said it is going to be easy, but sure it is going to be worth it… or so we should believe!