How to start a business during the Covid-19 pandemic
Updated: Oct 16, 2021
Starting a business in normal times can be one of the most challenging things you do let alone during a pandemic and economic crisis. At a time where startups and established companies alike are failing left right and centre who in their right minds would decide to dip their toe in the water, let alone jump in the deep end? Stay with me, the pandemic has created an extremely unique market environment and for those that are savvy enough to take advantage of it, it could mean the start of an extremely profitable business. In this post, we’re going to go over the DOs and DON’Ts of starting a business during the Covid-19 pandemic as well as some useful tips.
Pick the right market
2020 has opened up tones of different opportunities for entrepreneurs to take advantage of. When forming a startup company it’s important to remember that the pandemic won’t last forever. If your new company provides a product or a service that is only going to be in high demand during these challenging times then as soon as all of this is over, your newfound company will be as well. The key is LONG TERM SUSTAINABLE GROWTH. Selling designer face masks might be extremely lucrative today but your revenue will all but vanish once there is no longer a need for them. Here are the questions you should be asking yourself;
Are you passionate about the industry?
Was there a high demand for the product/service BEFORE the pandemic?
Will people still need to buy your products/service AFTER the pandemic?
Take advantage of gaps in the market
Now that you have made sure you are not ‘buying into the hype’ and setting yourself up for short term success and long term failure let’s look at what you should actually be looking for;
Due to the sheer amount of businesses that have shut their doors during the pandemic saturated markets that were once near impossible to break have suddenly become a lot more inviting. Things like the travel and tourism industries experienced huge declines. As the world slowly scales back lockdowns and vaccines are gradually rolled out it’s only a matter of time before we are all back on planes on our way to our favourite holiday destinations.
The current downtime in the market would let you set up, let’s say, an adventure travel company, allow you to take the time to build a brand, advertise, and take pre-bookings. It’s almost as though your competitors are hitting pause, allowing you to set up well and come out of the gates swinging when the time finally comes.
Take the time to plan
If you followed our previous two steps you are setting yourself up for long term success. That means that you have chosen an industry that is going to blow up AFTER the pandemic and not fizzle into nothing once it’s over. That means that you can take the time now to plan, set up and be ready for success.
Take the time to start building an online presence, focus on developing a website with strong SEO and building a large customer base through a plethora of passive inbound marketing campaigns. When the time comes for you to launch you will already have loyal customers or better yet, pre-orders or bookings. Once your business does launch your momentum will allow you to take a larger market share more easily and faster than you would have if you were trying to focus on the setup while running your business.
Take advantage of other struggling manufacturers
According to the Oxford Business Group, manufacturing saw a 41% decrease in demand in 2020. This coupled with a shortage of raw materials and workforce meant that a lot of manufacturers experienced a significant decrease in revenue. This is good news for anyone starting a business, it opens up the doors to negotiate better deals with otherwise inaccessible manufacturing and distribution solutions for small startups.
Obviously, this still requires some business savvy, sometimes its easier to find a business development manager or firm to negotiate these deals on your behalf. It goes without saying but getting your products manufactured and distributed cheaper than you would normally be able to, is GOOD NEWS!
Build solid long term relationships
So you have a sustainable idea, you invested in the right fields, you have a plan, you’re ready to attack the market head-on and you have global manufacturing and distribution for cents on the dollar, now let’s ensure you hold that position for years to come.
Business relationships are a two-way street. Sure, you can take advantage of someone’s weakness for a short term advantage but if you have been paying attention up until this point you know we are all about long term growth. When negotiating deals make sure that at face value, it's the other party that is going to get the majority of the benefit. Don’t be the person that does nothing but demand, rather, be the person that presents opportunities, you’ll have other business owners opening doors for you in no time.
When you are structuring your new deals take the opportunity to make a larger established company excited to work with you for years to come rather than feel like they need to, just to survive.
Learn from others’ mistakes
Lockdowns around the world have devastated a lot of businesses and resulted in liquidations left right and centre. Obviously, this is sad, but it also provides us with great learning opportunities, we can look at what types of businesses failed, and more importantly, why.
It’s easy to blame the pandemic for failing companies, spend some time around any business owner these days and you’ll inevitably hear something along the lines of,
“The only reason I had to close my doors was the lockdown”
“2020 was going to be my year”
“My business would have succeeded if it wasn’t for the pandemic”
It’s time to drop some truth bombs now, businesses that failed during the pandemic, were set to fail anyway.
Let’s say that again;
If a business failed during the pandemic it was probably going to fail regardless.
Take retail for example; brick and mortar retail was one of the hardest-hit across the globe. Does that mean that you can’t buy anything anymore? Absolutely not. Businesses that succeeded during the pandemic were able to adapt to the market environment quickly establishing e-commerce branches and diversifying out of brick and mortar by investing heavily in marketing and brand awareness campaigns.
The lesson here is that you need to be able to constantly adapt, otherwise you’ll be left behind very quickly, pandemic or not, markets evolve constantly and being aware of new trends is the key to success. The world suddenly became more digital than ever before and it’s going to stay that way. Any new business is going to have to make significant investments in its online presence.
Let’s recap our recipe for success;
Aim for long term growth, don’t look for ‘quick cash’
Look for markets that are slow right now but will explode soon after the pandemic
Take the time to make a plan
Build a solid foundation and set yourself up for a big launch
Look for cost-saving opportunities with sectors that are losing revenue
Network yourself and build strong relationships
Look at others failures and don’t make the same mistakes
Follow these simple steps and you are sure to succeed. Remember Cosmos is here every step of the way.