Do you have a dream of becoming independent, owning a business, and becoming financially free? Are you willing to put the time in and make all the sacrifices to go from 0 to your first client? Or do you just like the idea of the thing and will never actually get the nerve to just go do it? These are all questions that many of us would be entrepreneurs grapple with. However, with the world shutting down all of this deliberation got put on hold. So all things considered is it still a good idea to try to create a business in the eventual post COVID world?
Well if you’re like many out there out of a job now is really the best time (as long as you can continue to pay your bills). I’ve spent some time asking people around me for their general thoughts and concerns which I’ll elaborate on in the below.
Is it still worth the risk? With capital gains tax increase legislation pending some that I’ve spoken with are concerned that changes could be a disincentive to starting a business. Why go through the pain and effort of starting something from the ground up if the outcome is the same as staying in relative safety of full time employment. I think for myself the allurer is the control to do whatever I want. While the rewards may end up comparatively less than it once was being able to set my own rules and work at my own pace would be worth it.
But I have too much to lose!! I’ve felt this concern many times and others that I’ve spoken to have shared similar worries. I feel like that is why most break out entrepreneurs or artists start out when they are young or just don’t have much going for them at the time when they start. Weighing the opportunity cost after about 10 years in career progress can make starting a business from scratch seem like a step backwards financially at least initially in the early stages. The obvious answer is to not quit your day job until you’re making enough to at least have you basic expenses covered, but working a day job and trying to get a business going on your own is basically impossible frankly. Therefore, save up enough money to where you feel comfortable and then move forward with your idea. Just taking a leap of faith and figuring out each step incrementally can be the only way to break out of over thinking risk of failure.
Can I still enjoy my life? Maybe not at the beginning depending on the type of work you pick. So this is fairly trite advise but you’d better enjoy what you are doing. That said, you’ll know you’ve picked the right thing because you’re obsessed about it and it doesn’t feel difficult to wake up every day to do it. The reality though is that when you first start you won’t have vacations or discretionary income. However, sacrifice often times is the best motivator. You’d be surprised how adaptable you can be once committing to a direction and not giving yourself a choice to get out of it.
Keep it simple or challenge myself? While it seems like a good idea initially to shoot for the highest possible target the reality is that if you want to take anything off the ground it can be best to start small and specific. Although ego can draw you in competition is the last thing you want to have. Focus on the initial steps and get great at serving the basics better than the competition. Nimbleness and customer services should be your main focus to win over and keep your first few clients.
Options are nice but I can’t eat with them! As a new entrepreneur you’ll most likely start with a lower salary that you make compared to working full time for someone else. This can be a non starter for most people. However, once you get past the hard part eventually the sky is the limit with your earning potential. Focus on just getting a little better daily and don’t worry about having everything altogether at once. It is true that you can’t live off of your company’s options so ensure that you’re at least making enough to live off of and have enough emergency savings before going all in on your venture. That said, if you’re passionate enough about what you are doing you will be able to make the sacrifices necessary to live a leaner lifestyle required for the early startup days.
I don’t have a good idea. The idea is definitely less important than the execution as far as I can tell. Anything can work as long as you find a problem and have a better solution than what is currently available for most people most of the time. In that sense then don’t go looking for ideas but rather problems and the people that have them who want to spend money to solve them. That means though that you won’t figure it out in the shower or sitting on your couch watching tv. Get out there and meet people be a good listener and be curious around their thoughts. That’s the only way to find the problem to solve that you can turn into a product or service. You’ll be surprised how much people are willing to open up and tell you about their problems in explicit detail if you give them the runway to talk.
I don’t have the time. Everyone has the same amount of time but different priorities; a reality that explains the different outcomes. Every time I tell myself that I don’t have enough time to work on a project it is almost always an excuse. If you allow distractions to impede you from your goals its due to priority not time. If I make my highest priority the first task I do in my day it pretty much always gets done. Think about your day. If you’re spending more than 1 hour watching TV or drinking in the evening than you have the time to start a business. Figure out what is really important to you. For some just having fun living leisurely life is great, but if you want to take a different path then make choices that get you closer to your goals and minimize passive activity not related to starting a business.
But I can’t pay anyone yet? Try trading services or merge with an equally ambitious person with similar goals / product idea. Providing great training and referrals for recent college grads can be a good way to bring in affordable resources. Although experience is important, I’ve found that someone who is a good fit for a role will be able to pickup the skills and become competent in a role 6 months to a year of doing it. Therefore, a smart and ambitious person will succeed regardless of age of years of experience.
Environment Risks to Post COVID Startup
Aside from the general concerns to starting a business the unique situation that COVID has put the economy in could create a risk to starting a venture.
Inflation could be a challenge. As cost of goods sold increases it may cost more to sell products as a consequence may be difficult to get a good margin depending on the type of product that you are trying to sell. This could be a barrier to entry.
People are out of a job so people may be looking to save money instead of spend money now.
Changes in government regulation in direct response to COVID could throw your plans sideways.
People’s anxiety about going back out into the world post COVID could make things difficult. Even though the country may be open again it may take longer for people to feel comfortable again.
Getting supplies is already difficult for those businesses that have established supply chains. If you’re a new entry the delay in supply chain could be a non starter.
Depending on the state another COVID strand could prompt a lockdown and prevent successful new ventures.
How could the Post COVID world be a great opportunity?
Even though there are risks look at the pros as well. There will be risks to investing in any asset class and frankly it could be more risky to put your faith in full time employment. So, although humans are wired for risk let’s look at the positives here.
Since many businesses have gone bankrupt there could be gaps in the market for your product or service could fill. For a similar reason it could be a good time now to buy a business. Find likeminded people who aren’t happy with the returns they are currently making in the stock market or just have cash that they don’t know what to do with. Since inflation is coming anyone with cash will want to get that into assets fast!
New needs arise due to environmental changes. There are more remote workers post than pre COVID and more other precautions as a result of COVID fears which could require new or improved products and services.
Since many people want to save money now, if you can enter into the market with a penetration pricing strategy with value superior to competitors or similar value compared to competitors then it may be easier to convert existing users with an incrementally improved solution.
Since some are out of a job finding help on your venture may be easier.
If you spent your time thinking of ideas to start a business then you should have a plan ready post COVID
Starting a business is undoubtedly a lot of risk up front but if you can get past the entry stages and get a few customers than it becomes less and less of a risk to the point where it can run itself. That said, be prepared for the stress and long hours of early start up life and ensure that you have a healthy lifestyle and mind set as if you’re not working then nothing else will be. Regardless if it is now or in the future dipping your toe into the water of a side business can be a great first step to independence. Don’t be afraid to give it a try – you can do it!