The pandemic has been bad for employees and businesses alike. Millions of people have lost their jobs, while many companies have either shut down or overhauled their operations at cost.
As we enter this recession, things look bleak for everybody. But it’s the business owners that have a better chance of successfully weathering the storm. Here’s why you can share this positive outlook by starting your own business now.
Breaking out of the decline
There’s no doubt the pandemic has had a severe negative impact on our economy. And many employees would be in a much better position if the crisis could somehow have been averted, or its effects mitigated. But was the outlook prior to Covid-19 really looking good in the long term?
Just months prior to the outbreak, it was reported that the American middle class was slowly dwindling. Studies have shown that with each new generation, the percentage of people from middle-income households was getting lower.
Among the contributing factors are increases in the cost of housing and education, with which the median middle-class income hasn’t kept pace. Some families have managed to move up a bracket, but others find themselves slipping into the lower class.
These are long-term trends of decline, mirrored elsewhere among OECD countries. And the implication is that even if you could somehow turn back time and prevent the pandemic, aspiring to the American middle-class dream would probably not have been sustainable.
People from the upper-income brackets have relatively little to worry about in this situation. It’s those in the middle and below who face a lot of uncertainty, both immediately and in the future. The model of steady employment is only likely to end up with you living paycheck to paycheck. If you want to break out of this pattern, starting a business is the way forward.
The path of the entrepreneur has always been fraught with risk, even in the best economic times. Starting a business in the current climate is not only intimidating but seemingly impossible. Yet while many businesses are struggling, there are others that have managed to sustain their operations, or even flourish.
Many businesses are going through difficult times now because they were built on old assumptions. For many years, it proved sensible to take advantage of global supply chains and constantly look for ways to improve efficiency and cut costs. Companies wouldn’t hesitate to outsource their manufacturing and other operations to countries with cheap labor, for instance.
The pandemic upended those assumptions. A few businesses never relied on them to begin with; others were quick to retool and adapt. They have continued to thrive despite the disruption. And by entering the scene armed with that knowledge, you can prepare to succeed.
Funding will be available if you look around with the same diligence as someone searching for the best mortgage company to buy their dream home. Venture capitalists may be hesitant to invest during a recession, but there are other options.
The government’s Small Business Administration now offers forgivable loans to eligible businesses. You can also explore alternative sources with credit institutions, state and local resources, or crowdfunding. The risks and challenges will be there, but they can be mitigated with the right approach.
Setting up for success
There’s no question that you can start a business, even during this period of downturn and uncertainty. But you’re doing this to break out of the declining fortunes associated with the typical employment model. And for that to actually work, your business must be a success.
Every business idea has to solve problems. Although the pandemic has created a host of new problems for people to overcome, that doesn’t mean your concept has to address them directly. Instead, you could provide a product or service that helps the companies and people that are trying to solve issues related to healthcare, or improving remote work.
With your first foray into these unique times, it’s imperative that you build trust and a strong perception of your brand, both with consumers and employees. Where other businesses had to rework their organizations, you can launch fully prepared to take advantage of remote work. You can assure consumers of your safety practices and engage with them as a vital source of actionable feedback.
Above all, you should never stop learning. Every experience running a business presents an opportunity to better understand what’s going on and change in response. Investors turned you down? Find out what they didn’t like, and improve upon it. Networking with veteran entrepreneurs? Listen to their stories about attempting to pivot amid chaos.
There’s no guarantee of success in business, but you’ll always have a shot at getting it right and moving up. Even in this turbulent situation, that’s better than locking yourself into the increasingly mediocre outcomes of employment.