As the world prepares to face life under the “New Normal”, our news feed is packed with stories of companies closing down or streamlining costs by laying off their employees. And the number of people who lost their jobs because of the Covid-19 pandemic is quite staggering.
In the month of April alone, 20 million Americans were laid off. The U.S. unemployment rate hit 14.4%; the highest level since the Great Depression.
When the World Health Organization (WHO) declared the spread of the Covid-19 virus a global pandemic last March 11, businesses all over the world were forced to shut down as communities entered into a period of quarantine.
In a global economy, the effects of the community quarantine were immediate and devastating. According to Statista, the global economy lost more than US$3.5 Trillion during the shutdown.
Without a vaccine, many health experts believe there will be intermittent lockdowns throughout the next few months. Even if the world opens for business, not many share the opinion that the global economy will show signs of improvement.
So in view of the multiple “gloom and doom” scenarios discussed in various forums, why do we believe this is the best time to become an entrepreneur?
1. Radical Shift in Business Modeling
Throughout human history, crisis has become the chief catalyst for innovation. When the global equities market crashed in 2003, it spurred entrepreneurs to find ways to extract value from failing assets such as homes and vehicles. Thus, businesses such as Air B’n’B and Uber were founded.
With the threat of Covid-19 still in the air, business models will begin to shift and adapt to the conditions of the new normal. Business models that are rigid, inflexible, and restrictive will give way to processes that are flexible, mobile, and adaptable.
As an entrepreneur, you don’t have to spend money on a traditional brick-and-mortar office when you can run a business from home. No need to pay several months of deposits for security and advanced rent.
You don’t have to buy computers and workstations or accumulate recurring expenses for rent and office supplies. Your operating expenses for Internet services, telecommunications, and utilities will be much lower.
There are many digital platforms you can use to manage the key areas of your business and most of these tools and processes will not cost you a cent.
If you hire remote workers such as freelancers and virtual assistants for your team, they are accountable for their business expenses.
Under the period of the new normal, entrepreneurs may find it easier to fund their businesses. With lower operating costs and reduced capital expenditures, the opportunity to generate profit will be greater now than it has in previous years.
2. New Business Opportunities Have Opened
Scientists continue to study the origins of Covid-19 and how it is spread from person-to-person. Meanwhile, as we await the answers, several industries have suffered from the effects of Covid-19. Many have become casualties – of the economic kind.
If there is one thing we have learned from the Covid-19 pandemic is that businesses are also subject to the underlying principle of the Darwinian Theory of Survival of the Fittest:
Adapt or die – the species that evolve will survive.
A good example is the health and fitness industry. The commercial gym business has been severely impacted by Covid-19. They remain closed because gyms invite congregation and it is difficult to observe social distancing.
Some popular gym chains such as Gold’s Gym, Planet Fitness, and Crunch Fitness have either closed a few outlets, retrenched workers, or stopped collecting membership fees.
While the commercial gym business has gotten in bad shape, the predicament has given rise to a new market in the health and fitness sector – the home gym market.
Visit any e-commerce retailer of home gym equipment. The first 3 words that will greet you in their products page are “Out of Stock”.
Home gym equipment such as resistance bands, Bosu balls, jump ropes, stationary bikes, elliptical machines, full-body machines, kettlebells, dumbbells, and yoga mats, to name a few, are flying out of the warehouse.
People understand that without a vaccine, the best defense is a strong immune system. Along with a healthy diet, a good night’s sleep, and vitamins, regular exercise completes the cornerstone of a strong immune system.
So if you are a personal trainer, this is the time to start your online personal training business. People want to exercise – they just want to do their workouts at home.
3. Greater Innovations in Digital Technology
To overcome persistent difficulties, mankind resorts to the innovations created by digital technology. A good example of this is the video teleconferencing platform Zoom.
Before the coronavirus exploded into a global pandemic, not many people heard of Zoom. In terms of popularity, Zoom fell behind Skype and FaceTime as the preferred platform for video conferencing.
However, when the world entered into the quarantine period, Zoom reacted right away and lifted its 40-minute time limit on free subscriptions. The company did this to help schools conduct hour-long virtual classroom sessions for up to 100 students.
That decision has made Zoom the most popular video conferencing platform today. More than that, it raised the profile of the company as one with a keen sense of social awareness and responsibility.
As an entrepreneur, you can conduct virtual meetings with clients, conference calls with team members, and conduct training sessions with new employees via digital platforms like Zoom.
And the new wave of technological innovations won’t end with Zoom.
There are digital platforms with features that have blurred the distinction between virtual reality and shared space collaboration.
Learning Management Systems (LMS) have been around since the early part of the new millennium but have evolved to feature:
- Virtual classrooms/conference rooms
- A.I. component that functions as a virtual library by curating content based on search behavior.
- Built-in tools for performance evaluation, career assessment, time-keeping, and for preparing exams and quizzes.
There are tools for recruitment that use a behavioral-based algorithm to test and identify candidates according to right-fit qualifications. Why is this important?
If you’re working with a remote team, you need to know who you’re working with. If you’re thinking about putting up a telecommuting program, you need to know if you’re assigning the right people to work from home.
- Are they the right people for my company?
- Can I trust them to perform even if they work remotely?
- Can our personalities bridge the gap of cultural differences?
The answers to these questions cannot be found in a resume because these focused on soft skills – the attributes that best define the personality of the individual.
You can rest be assured that software development companies will be looking for digital-based solutions to support businesses coming up as a result of the new normal.
4. Fewer Competitors in the Industry
A crisis situation such as the one brought down by the Covid-19 global pandemic can create massive disruption in the economy.
As we have read from various media reports, companies have been shutting down; unable to cope with the slowdown in business activity in their industry.
The pandemic has the same effect as a crash in the equities market – weeding out investors and participants who don’t have the resources to maintain their positions in the market.
Once the smoke has cleared, there will be fewer competitors in the market – in your industry. Your next move will depend on your answer to the following philosophical question:
“Do you see the glass half-empty or half-full?”
If you see the glass half-empty, chances are you will step back, assess the situation, and retrench to look for clearer signs of opportunity.
If you see the glass half-full, then you understand why now is the best time to become an entrepreneur.
Yes, the economy has been hit. Consumers are scaling back on expenses and focusing on the essentials. But here’s the truth:
The demand for products and services remains.
You just have to find out how the pandemic has changed the consumers’ purchasing habits and decision-making process.
Once you do, then, it becomes a matter of adopting a business model that conforms to the changes in behavior and thought processes. With fewer competitors in the industry, you have the opportunity to grab a larger slice of the pie.
As we discussed in the previous section, the use of digital technology – its tools and platforms – will lower your costs of starting and running your business.
Therefore, your risks measured as the amount of money you spend to fund your business will be much lower.
Create a feasibility study that includes financial projections. Study your projected cash flow – how many months can you sustain the business without digging deep into your savings?
Identify your tolerance level and if your business reaches that point, then you can make a decision whether or not to continue or to shut down. If you choose to close the business, at the very least, your losses will be minimal.
5. Consumer Behavioral Patterns Will Change
The coronavirus has changed the behavioral patterns of consumers. Talk to your friends. Even with the lockdown lifted, we’re sure many will prefer shopping online than risking their health at public markets.
In some countries such as the Philippines which is one of the most heavily-hit by Covid-19, malls have implemented guidelines that have altered the shopping experience of Filipinos.
These new measures include limiting the number of people inside a supermarket. Once the quota of customers has been attained, entry is prohibited and would-be shoppers have to wait outside for their turn.
Another measure is to implement “directional arrows” that instruct the shopper where to pass and walk-through. Customers aren’t allowed to “counter-flow”. Even if your destination point is a stone’s throw to your left, you won’t be allowed to cut through the directional arrow.
All restaurants are only allowed to offer take-out and delivery service. Dine-in is prohibited. You can’t enter the premises without a face mask.
These changes are cumbersome but necessary to maintain social distancing. Other parts of the world will have their own measures in place.
While it’s nice to go out and circulate in society, it’s better to stay home most of the time. It’s safer and more convenient to do things from your home.
Entrepreneurial ventures that address these changes in consumer behavior will be highly feasible.
We’ve cited examples earlier in this article such as online fitness training, virtual classrooms, and online instruction. There are other ideas you can develop that address the changing needs of consumers in your industry.
Sit down with your friends and brainstorm on these ideas. Come up with a short list then, using a process of elimination, identify the best venture to pursue.
Remember that changes in behavior will open up new opportunities because demand for those products and services will always be there. It will just evolve and adapt to conform to the current situation.
Conclusion – Entrepreneurship Is A Must
“Follow your passion.”
“Do what you love to do.”
“Be a doer – not a dreamer.”
We’ve often received these types of advice when discussing our plans to start a business.
Today, it may no longer be a matter of if but when you become an entrepreneur. We may be at a point where we’re no longer asking ourselves whether we should become entrepreneurs but instead accept the current reality that we must become entrepreneurs.
With so much uncertainty, you cannot solely depend on your employer to keep your stream of income flowing.
Business conditions can change rapidly. Your boss is an entrepreneur. He will be doing the things we discussed in this article: finding new opportunities, reviewing his business model, and streamlining costs.
Those plans may not include you.
Thus, now is the best time to become an entrepreneur because you have to take control of your future and become responsible for your financial independence. The conditions are in place to help you succeed: Better technology and fewer competitors.
Finally, the economy – your country – needs you. As an entrepreneur, you are the country’s most powerful engine of economic growth. Your success and those of other entrepreneurs will set the course for the country’s recovery.