Starting a business is scary. It is even scarier to think of starting your business during a pandemic, especially in light of all of the companies that have had to recently scale back their operations, lay off some workers, or even shutter their doors for good. The economy is fragile right now, making starting a business in the current business climate a significant risk.
But if you consider it through a different lens, it could also be the perfect time to start your business, particularly if you have a solution that meets the evolving needs of people during and after the pandemic. Major events like pandemics and recessions often reveal weaknesses in the operational models of businesses and spur innovation. But even in an environment with ample room for innovation and new entrants, it’s always a good idea to properly assess the market. If you are considering opening a business amid the pandemic, one of the best moves you can make is contacting a startup business attorney to help you gauge risk and ensure the proper structure.
COVID-19 is no different than any other major economic event that forced change, and we are already seeing massive changes in how people choose to live, shop, and work. There has been a tremendous increase in remote working, delivery services, and e-commerce. Businesses that operated under traditional methods are scrambling to evolve to meet the demands of their customers and their employees. On top of that, there are increasing regulations to promote public safety and health in many areas. All of these changes mean that the needs, habits, and preferences of the markets are also shifting.
Rapid societal change often presents windows of opportunity for visionaries. Individuals who can think outside the box and develop solutions that meet the changing needs of people can find a high degree of success during normal market conditions. But when they can get their solution to the market during a time of increased need – such as a pandemic – they can skyrocket to success even more quickly. Startup business attorneys often have the knowledge and skills necessary to help you navigate all of these hurdles successfully so that your product or service hits the market at the most opportune time.
In addition to the current changing consumer preferences, there are also many financial benefits to starting a business during the pandemic. Interest rates are incredibly low, and there are many grants and low-interest loan opportunities right now. On top of that, many traditional businesses have given up their physical locations, meaning most markets have a slew of properties available for lease at reasonable prices. Your startup may also find that there is less competition for resources now too. For instance, it may be easier to find qualified employees simply because there have been so many other companies that have had to lay employees off recently.
But the key to starting a business successfully during COVID is understanding how the solution fits the market needs, both immediate and long-term. It would be best if you matched the solution to the problem. Many problems were revealed in the early days of the pandemic. Health care facilities faced supply shortages; many companies lacked the infrastructure needed to enable remote collaboration; there weren’t enough delivery services to meet demand. These are just a few of the large-scale problems that came up, and many innovators can likely dream up solutions to meet these challenges.
It’s crucial to remember, though, that your solution – whether it be a product or a service – must also meet long-term market demand. A study by CB Insights revealed that lack of market demand is the most common reason for a failed startup, and 42% of failed companies note that it is a contributing cause to their demise. Many founders of failed startups have realized that one of the biggest mistakes they made was to focus on the solution, product, or technology itself and not spend enough time considering what customers want and how the solution might be used in their life.
While there are some startups that will result in meeting a need caused by the pandemic, there are others that may not be directly related to it – but that doesn’t mean that these companies can’t find success in challenging market conditions too. It may require rethinking your business model and playing a more active role in identifying and reaching your target market. But if the solution meets current needs, there is a good chance that your startup will be successful.
Since COVID-19 first began to spread, it has sent shock waves through the global economy and impacted millions of families and individuals. By all accounts, we also likely face a long, slow, and difficult economic recovery period. While the pandemic has led many companies to financial ruin, it also presents opportunities for innovation. There will be businesses that thrive under the new normal. It’s simply a matter of having a solution that meets the market needs now – which are vastly different from what they were even a year ago.
There is no doubt that starting a business right now is incredibly risky. A reputable and knowledgeable startup business attorney can help you make sure that you start your business out on the right path.