There's never a wrong time to start a business, and 2021 is no exception
To say that the year 2020 was tough for business is an understatement. The COVID-19 pandemic caused lengthy business interruptions and other disruptions and resulted in the permanent closing of some 200,000 small- and medium-sized businesses in the U.S.1 But every cloud has a silver lining.
The pandemic has prompted entrepreneurs to launch creative startups and develop new business models capable of surviving and thriving during these challenging times and beyond.
NOW Is as Good a Time as Any
A struggling economy is fertile ground for entrepreneurship. Interest rates are low. The labor market is full of people looking for jobs. And, most importantly, incumbent companies' vulnerabilities are exposed, offering an opportunity for savvy entrepreneurs to invent new, innovative solutions.
Many successful companies were launched during economic downturns.
- General Electric was founded in 1876 during the Long Depression that ran from 1873 through 1879 (or 1896, depending on the metrics used).
- Disney and Revlon took off in the 1930s, during The Great Depression.
- The first Hyatt hotel opened during the post-war 1957-1958 Eishenhower Recession.
- Microsoft was founded in the heels of the 1973 Oil Crisis.
- The Great Recession of 2007-2009 saw innovative startups such as Uber, Airbnb, Groupon and Slack.
There's never a wrong time to start a business. Whether now or later, entrepreneurs will face challenges such as obtaining financing, finding the right workers and outdoing the competition. Waiting for the "perfect" time to launch your startup may mean waiting forever.
6 Reasons Why Now is the Best Time
If you’re considering starting a new business, here are six reasons why now is the best time to do it.
1. You're Ready
During the past year, most of us have gone from not having enough time to having too much time on our hands. If you have been planning a new business for a while, you must have used some of this extra time to develop your idea, conduct market research, write a business plan and take other steps toward launching your startup.
2. Beneficial Regulations for Small Businesses
To help businesses, nonprofits and faith-based organizations during the pandemic, the Small Business Administration offers relief options such as its Paycheck Protection Program (PPP), Economic Injury Disaster Loan (EIDL), SBA debt relief, Shuttered Venue Operators Grant (SVOG) and Restaurant Revitalization Fund. SBA relief options are supported by the $2.2 trillion CARES Act of March 2020 and the $1.9 trillion American Rescue Plan Act of March 2021.
An online search will provide you with all the information you need. Here are several online resources:
- NVCA Response to COVID-19
- COVID–19 Resources for Startups
- Small Business Grants COVID-19 Relief: Where to Find Free Money in 2021
3. A Market Ripe for Innovation
Unlike large companies, startups have the speedy adaptability and ingenuity to fill market gaps that are emerging as a result of the pandemic. For example, quarantines and social distancing guidelines have fueled the need for convenient and affordable food delivery services. Today's consumers are more open to new ideas and new ways of doing things. They use mobile apps to get rides, manage their diets and invest their money. They work at home, meet virtually with coworkers and friends, watch TV on their phones and interact with brands on social media.
4. Access to Funding
In the early days of COVID-19, cautious investors withdrew their investments from entrepreneurs. Now, these investors are ready to invest again, which is good news for entrepreneurs seeking funding.
5. Availability of Talent
The pandemic displaced a lot of experienced workers who were let go or who had to resign to take care of kids at home because of social distancing mandates that closed schools and daycare centers. By June 2020, more than 45 million Americans had filed for unemployment. With so many people out of work, there's a larger pool of potential employees to choose from for your new business. In addition to good salaries and benefit packages, to attract quality job candidates employers are offering remote work opportunities, flexible work schedules and a safe work environments that provide adequate social distancing.
6. Access to Eager Consumers
In post-pandemic times, consumers are stuck to their smartphones and laptops more than ever, and e-commerce is at an all-time high. In 2020, consumers spent $861.12 billion in online purchases from U.S. retailers, up 44% from $598.02 billion in 2019, according to the U.S. Commerce Department's Digital Commerce 360 report. Online spending represented 21.3% of total retail sales in 2020, up from 15.8% the year prior.
Like workers, consumers have been displaced because of temporary or permanent business closings. As a result, consumers are hungry for new products and services that make life easier or better in "the new normal." Count them among your potential customers.
The COVID-19 pandemic upended almost every part of life, including the economy. However, with recovery on the horizon, now could be the perfect time to start a new business. If you have a good startup idea and the drive to bring it to life, there have never been more resources available to you – make it happen!