Should an aspiring entrepreneur’s dream remain on hold until COVID-19 has ended? With 3.3 million U.S. small businesses failing from February to April 2020 alone, one might ask if now is the right time to take the leap of faith into business ownership. The best answer we can offer is – it depends.
It depends on a variety of variables that are as fundamental as your business structure and as complex as consumer behavior.
One of the first things that an entrepreneur should consider is his or her own products or services, and the “needs matrix” that surrounds them. How essential is your product or service to life and/or the quality or improvement of it?
As history has shown in the 2008-09 economic downturn and the more recent coronavirus pandemic, when people’s pockets change, so do their spending habits. This tightening of consumer’s financial belt is by force, of course, not choice. It does not mean that your goods and/or services hold no value; it only means that your customers may not have the expendable income to purchase what may seem like a luxury.
A prime example is the high-end gown/clothing rental company, “Rent the Runway.” What a creative concept and a booming business that was largely untapped before two suitably-ambitious businesswomen pursued and created it! For so long, their burgeoning business led to more business, as they were able to grow and scale the company beyond what they may have ever imagined. Their customers – who were largely (but not solely) women – flocked to rent expensive clothing for that special occasion – brands they may have been unable to afford otherwise. Somewhere in this company’s Business or Marketing Plan should have been the line “The perfect solution to your evening out.”
But what happens when the “evening out” is canceled, tabled, or postponed indefinitely due to an unforeseen pandemic? Customers’ sentiments toward the company have not changed, but their socioeconomic status may have. So, the company and its employees become gravely affected.
On the other hand, companies that produce alcohol-based hand sanitizer, disposable gloves, germ-fighting cleansers or sprays, masks or other personal protective equipment (even toilet tissue) have undoubtedly seen immeasurable increases. Businesses that specialize in the virtual space (i.e. social media, video calling/chatting, livestreaming platforms) are also fairing well in sales and revenue, possibly gathering more big data than they know what to do with.
Why is this? -Because of changes in society and a noticeable switch from “wants” to “needs” or simply, consumers choosing the necessities to live. So, in essence, it may not be time to launch a new clothing line – unless items are affordable, inspirational, comical or somehow feed the “needs” of consumers.
While there are many considerations an aspiring entrepreneur should ponder (or pray about), it is always a good practice to conduct market research prior to launching your business. Identify your target market, and develop surveys, questionnaires, etc. to gauge your potential customers’ interest.
These few steps will help to inform your decision and will move your company forward, in the right direction.