With so much up in the air due to the coronavirus, you may wonder whether it’s even a good time to go through with your startup idea. Entrepreneurial spirit will certainly be advantageous as the economy changes and, eventually, kicks up again. But how long will that be, and what effects will COVID have on different industries? These questions aren’t able to be answered easily, leaving many business owners, startup hopefuls and entrepreneurs in the dark. Although no one can predict the future, we can look at the current state of things in the United States and give you some key points of reflection to decide whether you should put your business ambitions on hold for the coming year.
Operations Have Changed
The safety regulations that went into effect will likely stay in place for all of 2021, possibly even forever. Preventing the immediate spread of the coronavirus is just one of its main goals; the other is to stop the spread of future outbreaks or other viruses that could emerge. What impact will this have on business? It depends on what industry you specialize in. Establishments that are rooted in large gatherings have taken the greatest hit; thousands of restaurants in the U.S. had permanently closed due to the pandemic. That number will continue to rise as many owners find themselves unable to make up for the losses they suffered during quarantine.
Launching a food startup now would be a major risk, especially if your target audience is the restaurant industry or bars. You would be better off looking for ways to accommodate the necessary change of distance dining and delivery services. These are two facets of food service that are going to need serious support in the coming months.
Consider Your Own Needs
What are you reasonably able to accomplish with the confines placed on you by COVID? Your work hours have likely changed, and you may be struggling with unemployment or reduced hours. Even those who are able to work full-time online have found themselves struggling to make ends meet as the cost of living increases. Your startup idea might seem like a golden ticket, but is it a practical investment right now?
There are, luckily, ways you can save money in your personal life that may help you bolster the cost of your startup. Getting your own finances secure frees up the headspace you need to focus more on your business and less on paying your own bills. One way you can start to save is by refinancing your auto loan. Using a calculator, you can see how much you will save on monthly payments and total interest on a 60-month or 72-month loan. Saving money on your own will also help you consider whether the cost of launching a startup right now is worth it. Timing is everything when it comes to business; there are so many brilliant ideas that never take off because their creators were ill-prepared, impatient or inexperienced. Even though waiting to launch might not be ideal, it could wind up being the best decision you make for your company.
The Effects of COVID on Startups
The global economy is expected to shrink over the next year. The world faces a recession worse than the Great Depression. From temporarily closures to layoffs, companies and corporations have had to find ways to save money without going under. A startup that knows how to meet a growing demand may do well, but it could also struggle to acquire adequate funding and take off. People are going to become increasingly conscientious about how they spend, and if your startup doesn’t provide something they see imminent value in, you could wind up losing everything.
What Industries Are Thriving?
Major events like the coronavirus create new demands, ones that smart entrepreneurs will tap into. If your current idea doesn’t seem to have a big chance of succeeding, consider exploring alternatives. The trending industries for startups right now are in ecommerce, remote work, cybersecurity, health technology and cloud storage. Companies that provided these services prior to lockdowns experienced a major boom; video-conferencing platform Zoom has exploded, and it is now a staple in post-COVID communication.
Moving forward, it would be wise for entrepreneurs to consider launching startups that facilitate digital communication and health technology; this could be done on the personal front, or you could develop a service that operates solely B2B and essentially mitigates this new era of remote work and distance education. Whichever direction you decide to go, prioritize your own financial stability over quick cash grabs. With so much still up in the air, it’s never been more important for startup CEOs to tread lightly. Forecasting will be a challenge, but taking the time to plot your course rather than take a hopeful risk will be worth it.