Entrepreneurs like to start businesses when the economy is doing well, as they see opportunity and less risk during a time when most everyone is flourishing.
If the past year has taught us anything, it is that life is unpredictable. At the beginning of 2020, we were excited about starting a new decade and had high hopes for our future. Then a worldwide pandemic hit, shutting down much of the country — businesses, schools, and entire communities.
Now, we are seeing signs that we will be able to get ahead of the pandemic in 2021, and things might be getting back to “normal.” However, there is still uncertainty as to what the future will bring, and many are craving security and comfort.
That does not mean it is a bad time to start a new business. Many successful companies have been launched in the wake of a recession, including Airbnb and Uber, which both started in 2009. In fact, 2021 could be the ideal year to make your dreams a reality. Look for opportunities that have come out of the crisis. This year is going to look a lot different from 2019, and some trends have emerged during the past year that can help your new business be a success.
Rise of e-commerce
Online sales have been through the roof since the start of the pandemic. E-commerce sales were up 32% in 2020 over 2019, as more retailers moved online as their stores closed or customers feared contracting the virus. Grocery sales jumped 100% year-over-year — especially in curbside pickup and delivery. Other top growth categories include toys and hobbies, consumer electronics, hardware, and home improvement. Now that more consumers have embraced the convenience of purchasing online, fewer of them will be returning to their previous buying habits.
Additionally, everyone has been glued to their mobile and electronic devices for the past year. This can make it easier to find and market to your ideal customer online.
Access to talent
During 2020, as thousands of employees were sent home, employers discovered their staff could be just as productive working from home as in an office. Zoom, Teams, and Webex meetings are now mainstream. And, like it or not, these video-based tools are here to stay. As a new entrepreneur, this means you are not limited geographically when hiring employees for your company. Additionally, with the current unemployment rate, there are some great people currently available and looking for jobs.
Pent-up customer demand
As the economy starts to open and more people are vaccinated, your potential customers are going to come out in droves, ready to spend money on goods, services, and experiences.
Additionally, due to pandemic spending restrictions and stimulus payments, U.S. households have more than doubled their average savings. While online sales are still expected to be high, consumers cannot wait to travel, shop, and eat out with friends and family. They are also looking at purchasing big-ticket items, such as homes, cars, and electronics.
Unfortunately, many businesses shut down during the pandemic. Others have stayed afloat but have been weakened by the economic conditions caused by the pandemic. And there are fewer entrepreneurs who are willing to start a new business in uncertain times. Less competition means a lower barrier of entry for entrepreneurs bold enough to start their businesses this year.
What are you waiting for?
Most likely, in the past year, you have had more time on your hands than ever before; time at home to think and reflect, try new things, and do the things you love. If part of that introspection has led you to the decision to start your own business, trust yourself and start planning for a better future. Your first step is to connect with your local SBDC office
and use the free resources available to new and existing small businesses.