Yes, due to cosmically inept handling of a major pandemic, most of the economy is tanking. Yes, businesses with less than 500 employees are going belly-up at twice the rate of larger firms. And, yes, traditional “mom and pop” businesses are disappearing by the thousands every day.
Nevertheless, this is the best time to start a small business, for five reasons:
1. There are unmet needs everywhere.
A famous entrepreneur once told me that every time you hear a person swearing when using a product or service, it’s an opportunity to sell them something better. Or, put another way, misery loves companies.
While there are some products (like smartphones) that satisfy needs that people didn’t know they had, most successful products fulfill needs of which people (i.e. potential customers) are painfully aware.
There’s plenty of pain out there right now (and plenty of swearing) which means there are endless opportunities to create sustainable businesses that help people cope with this perfect storm of disruptions.
2. There’s a huge pool of available talent.
When businesses and industries collapse unemployment grows. While government bailouts have kept the economy from sinking entirely, it looks inevitable that the economy is going to take a major hit, which means even more people out of work.
In the past, small businesses–the very businesses taking the brunt of a bumbling government–have employed about half of U.S. workers. Millions of valued, experienced, hard-working employees are in the market for a new job.
Under these circumstances, creating a business that hires people is a good deed on its own merits. And with so much talent to choose from, you should be able to assemble a team that can take on any challenge.
3. Marketing has never been cheaper.
As businesses fold up shop, they naturally stop advertising, which inevitably means that ad rates go down. This means that it won’t cost your startup all that much to achieve local, national or even international visibility.
4. Potential competitors are in disarray.
Some large companies, like Amazon or Zoom, lucked out because they provided a product or service that exactly matched a major need resulting from the pandemic. Large companies, however, find it difficult to change even under normal circumstances and thost that haven’t lucked out have been caught flat-footed.
This means that you can start a company even in a market that has dominant players without worrying about them squishing you like a bug because, frankly, they’ve got bigger fish to fry. (Apologies for the mixed metaphors.)
5. The post-COVID recovery is inevitable.
As awful as things are today, there will inevitably come a time when the pandemic and resulting depression will be over. Companies that will have adapted to thrive in these troubled times will be perfectly positioned to take off when the nightmare is over.
Companies founded during hard times in the past include General Electric, General Motors, IBM, Disney, HP, Hyatt, Trader Joe’s, Fedex, and Microsoft. A lousy economy didn’t stop their founders. Don’t let today’s lousy economy stop you.