As Covid-19 takes hold of the UK and throws the world into economic uncertainty now might just be the time to start that business you have always dreamed about. Whilst it may seem counter-intuitive to start a business in an economic slump you should consider that this is also a time of great opportunity. There are a whole host of reasons why you should remain positive. Here are just a few:
Need for problem solvers
Covid-19 is already throwing up innumerable problems. How can we maintain strong relationships with family, friends and colleagues during isolation? How can we protect our elderly and ensure they have the help they need? How do our homes need to be adapted to make working from home possible for a prolonged period of time? The list of new problems is endless.
There is a solution to every problem and start-ups which provide innovative solutions to the issues being faced will have an advantage in the marketplace. It is also worth noting that there are going to be a lot of bored people in self-isolation and boredom breeds creativity!
It is natural for well established companies with good cash positions to seek to hold their position as they weather an economic storm. They are likely to be more conservative and so less likely to take risks during this time.
This could mean that the 'first mover advantage' will be more pronounced. In fact, you may find that more mature companies are unable or unwilling to compete with you during the coming months until the economy is stable again. This gives you time to establish yourself in the market and build your brand.
A talented job market
With the impact of Covid-19 on the UK economy it unfortunately looks inevitable that people are going to lose their jobs. As a consequence, there will be skilled candidates in the market looking for work. If you manage to grow your business during this time, this will be a major benefit as it is likely to be easier, and indeed cheaper, to find well qualified highly skilled workers than in normal conditions.
If you need to raise money in the early stages of your business, the people to rely on are the ones who know you, believe in you and have funds available to help. The reality of this is that you should first look for seed investment from family and friends. You should then explore other options as your business starts to grow.
Interestingly at the time of writing the interest rate is the lowest ever in the Bank of England's history. In the short term this could make borrowing cheap but it could be a risk to take on too much debt until you know how the business could perform.
For growing and really scaling your business you will need access to other sources of capital, including business angels, Venture Capital and Corporates, but during this time each will have their challenges. We will explore the likely impact of Covid-19 on these other sources of capital in a separate note, which is really the next stage of growth for your business.
These are just some of the great reasons why you should be positive about starting a business right now. Remember that an idea can only be a good idea if it is put into action. So if you are sat there in quarantine in your bedroom with an idea go for it!