The events of 2020 make it feel like a bad time to pursue a business idea. However, there are many reasons the uncertainty makes this the best time to become an entrepreneur.
You’ve been thinking about starting your own business, and maybe you’ve run the idea past colleagues. Maybe you’re already pursuing it by writing a business plan and actively seeking funding. It has to be the right time and place, or you shouldn’t take the leap, especially considering the challenges faced by entrepreneurs — even in the best of times.
Then the unexpected happens. Months of uncertainty ensue. Long-established businesses struggle and the future is unknown. Everything seems to point to putting entrepreneurial pursuits on hold. Yet this past year could have been one of the best times to launch a business and become an entrepreneur. Here’s why:
1. Entrepreneurs are multiplying
The U.S. Census Bureau’s records of business applications for the third quarter of 2020 showed a 77.4% increase over the second quarter of 2020. Compared to 2019, 2020 business applications are nearly 38% higher.
That marked increase shows considerable confidence in the pursuit of entrepreneurship, even in the face of uncertainty. From gig workers and freelancers to small business owners and startup founders, entrepreneurship is growing.
2. A crisis yields opportunities
Numerous successful companies in the U.S. launched at what might have seemed like the worst possible time. Many even launched during major economic recessions.
Join the ranks of well-known firms: General Motors, Microsoft, Hyatt, Trader Joe’s, Airbnb, and Uber. They all saw an opportunity to launch and attract customers in the face of economic trouble or even a full-blown crisis.
3. The entrepreneurial mindset is designed for risk and uncertainty
A 2020 JustBusiness survey found that new and existing entrepreneurs are jumping at the chance to launch a business during the pandemic. Common characteristics of entrepreneurs include an appetite for risk and the ability to thrive in uncertainty. Risk actually motivates them to develop and launch businesses.
4. Innovation proves existing industries still have a chance
Smart entrepreneurs see the demand and recognize the opportunity to address new pain points or solve existing problems. This includes some industries hardest hit during the year, such as retail, arts, entertainment, food services, and accommodations.
That same JustBusiness survey found close to 70% of today’s entrepreneurs plan to include an in-person aspect for the business they are building. From drive-ins for movies and concerts to drive-through art exhibits, it’s clear that a little innovation can drive startup success in the face of adversity.
5. The emphasis on diversity and inclusion invites women entrepreneurs to step up
The ongoing civil unrest has heightened awareness of many issues related to diversity, inclusion, and equality. With so many feeling compelled to create greater opportunities for people of color, women, and others, it’s an ideal time for female entrepreneurs and those often passed over to step into the spotlight.
6. Social entrepreneurship is on the rise
World Economic Forum research suggests that social entrepreneurship could be one of the major driving forces that helps move communities and the world past the events of 2020.
Jumping in to solve the social ills from the pandemic and other ongoing issues such as poverty and pollution provides purpose and feel-good moments. From contact tracing and medical devices to mental health services and solutions that close the digital divide, this is the time to prove your ideas can change the world for the better.
7. You can help generate new jobs and stimulate the economy
The JustBusiness survey also found these entrepreneurs planned to hire employees. Nearly 70% had or were creating new jobs.
Starting a business now provides the vaccine for a sick economy. In a time where unemployment has hit a record high, these jobs are needed more than ever. Now, these workers have paychecks and are not seeking unemployment. They can pay their bills and purchase products and services, creating a positive economic ripple for businesses, people, and communities.
8. There are new problems to solve
As events illustrate, no one was prepared for the ongoing health crisis. People needed to figure out how to sustain businesses that had to close or minimize traditional operations, provide education in a virtual environment, contain a highly contagious disease, treat a formidable illness, and move entire businesses to remote environments — and they needed solutions fairly quickly.
All these problems have inspired new and existing entrepreneurs to come up with innovative products or services. If you have ideas that can alleviate these new problems, then launching your business could mean the difference for many people and businesses.
9. Investors want to fund innovative solutions
Research conducted by the Stanford Graduate School of Business found venture capitalists are mostly still fully funded and in a good cash position to continue investing in startup businesses that have a relevant product or service for the new business environment.
These investors noted that, unlike other economic recessions (such as the fallout from the dot-com implosion), they are busier than ever and continue to help support the business ideas that can assist with today’s business and social problems.
10. Accelerate your competitive advantage
Not everyone responds proactively to change. In fact, much of your competition may be complacent or at a loss for concrete, actionable ideas. This leaves you an opening to step in and gain a significant competitive advantage with a flexible, motivated business that is eager to win business quickly. While those around you struggle for winning response strategies, you can thrive in the chaotic environment.
11. Starting in lean times is beneficial
If you can launch and do well on a lean budget in the midst of a crisis, then imagine what you can do once the environment turns the corner and begins to grow again.
First, you will be in a good position to grow. Second, you will know how to operate with a skeleton crew, with a minuscule budget, and fewer resources. Contrast this lean responsiveness to a business that launched and operated with an inflated budget, one that may have learned bad habits like overspending.
12. Be a new business model native
Many companies have had to learn to work remotely, hold virtual meetings, leverage digital processes, and sell online. By launching in the midst of these new ways of working, you’ll be a native of those business models.
Working in these environments will be second nature to you. The result can be faster adoption than existing businesses, helping propel you further than if you had launched with a traditional business model.
13. You are in a dying industry
As an employee working in a traditional industry, you may have already lost your job, or perhaps you see the signs ahead that indicate significant changes are needed to sustain it. This could be your signal that it’s time to jump ship before it sinks and transition to a new industry or niche, where you can be a leader.
You will not only be an entrepreneur, but you will also become a pioneer. In the process, it could be easier to gain a thought leadership position and build credibility because your audience is eager to hear about something new and different. Doing so means you can provide hope for others that a positive future is on the horizon.
14. Creating a business in chaotic times provides valuable experience
Launching a business during good economic times is much like winning at anything. It may feel good to start, but you don’t actually learn hard lessons from it. Face adversity, failure, and barriers, and you’ll gain wisdom. If you build a business now, you may be able to learn how to become more resilient, handle greater risk, and address mistakes more efficiently.
Why you should launch in the new business environment
Even with many reasons to launch during this new business environment, you still need to take precautions and plan carefully to make it work. Be patient, don’t rush your decisions, and continue to use formal startup steps such as a business plan to guide your efforts.
With demand, opportunity, access to funding, and the desire to make a positive difference in the world, there is no better time to transition from employee to entrepreneur.