Written by: Guest | Best Company Editorial Team
Last Updated: December 3rd, 2020
Guest Post by Ty Kiisel
If you’re like many people, right now you’re thinking about what you really want out of your life and career. Maybe you lost your job because of COVID-19 or simply realize it isn’t what you want to do long-term. Maybe you’re dreaming about a business you’d love to start.
Starting a business in the middle of a global pandemic and national recession might seem foolhardy on the surface, but in reality, it might be your best opportunity to realize your dreams of entrepreneurship.
Why? First of all, people are being cautious, which means they aren’t taking the kinds of risks that lead to financial success right now. That leaves an opportunity for you. Also, if you can create a thriving business in the middle of global upheaval, it’s going to be even easier to succeed when times are good.
Still, this isn’t going to be an easy endeavor. Here are some tips to help you succeed:
1. Start small
This might not be the time to execute your full dream of opening a chain of retail stores, given the economic climate and the fact that some states are still shutting down certain types of businesses to combat the pandemic.
But that doesn’t mean you can’t get started on a smaller scale. If you want to open a retail business, maybe you start selling online first. Online sales have, after all, increased 55 percent year over year, and experts don’t expect them to stall out too much as brick and mortar stores open back up.
If you’re still working, you could start a business that you can run, at least initially, part-time while you continue to bring home a steady paycheck.
You can create a plan to scale that allows you to start with a lower budget for equipment, marketing, staff, etc., that you can grow once you start bringing in revenue.
2. Look for unique opportunities
Before you jump into launching a new business, look around to see what’s happening in that industry. The global pandemic has forever changed many types of businesses. Take restaurants, for example. Many have struggled with fluctuating rules about dine-in services in many states. Does that mean you shouldn’t open a restaurant? Not necessarily.
The key is seeing where the opportunities lie. If you’re interested in opening a restaurant, it might do best as a take-out and delivery option only. You’d also cut down on your restaurant footprint and cost for commercial real estate if you don’t have a dine-in option.
Where else are there opportunities right now? The world of virtual offices, communications, and healthcare are all areas that are rapidly changing and presenting a wealth of business opportunities you can capitalize on.
3. Buy used equipment
You may like the idea of buying a $1,000 Herman Miller office chair for your new enterprise or upgrading your old laptop for something sleek and faster, but ask yourself: Is it really necessary? The first months of your new business will bleed money, so any unnecessary expense should be tabled until you’re profitable.
One way to do that is to buy used equipment on sites like Craigslist, NextDoor, or Facebook. And now’s a great time to find deals because, unfortunately, so many businesses are closing up shop. Their misfortune could be your cost-saving grace.
4. Think about financing ASAP
Even if you plan to bootstrap your business, it’s still a good idea to consider what financing you could qualify for down the road if you want to, for example, hire employees, rent office space, or buy more inventory.
If you’ve got great personal and business credit, you may qualify for a low-interest SBA or bank loan. If not, you’ll have to look at alternative financing options like merchant cash advances. Better yet, look for ways to build your business credit and improve your personal credit. It won’t happen overnight, but if you start working on it now, you’ll be in a better position for a loan down the road.
Being aware of all financing tools available to you before you need them, as well as what each requires to qualify, can help you position your company from the start to be appealing to lenders. You can build your business credit by opening a business credit card or tradeline with a vendor and meeting all your financial obligations on time — that’s the single biggest thing you can do to build a strong business credit profile.
Whether you think you need financing right now or not, it may be a good time to apply for a line of credit so that you can lock in low-interest rates and have access to cash when you need it later.
5. Consider your actual staffing needs
You may dream of commanding an entire office of employees, but the reality is that you may not be able to afford to hire full-time employees from the start. Still, there are options that will get you the help you need without the big spend.
One option is hiring freelancers or contractors. Because you pay them per hour or per project and aren’t required to provide employee benefits, you can save a significant amount of money on staffing.
Another option is to hire part-time help if your needs are small. With either staffing option, you have the benefit of getting to know how an individual works, and if you like what they do, you can offer them a more permanent, full-time role down the road.
Most entrepreneurs take on the bulk of the workload themselves at the start, then hire gradually as revenues and profits permit.
Starting a business right now is not without its challenges, but it’s also got plenty of potential for long-term success if you plan ahead.
Ty Kiisel has been writing about small business and the business finance topics that impact a business's bottom line for almost 20 years. With over 35 years in the trenches as a Main Street business evangelist, author, and marketing veteran, he makes the maze of small business finance accessible by weaving personal experiences and other anecdotes into a regular discussion of some of the biggest challenges facing small business owners today.