Although COVID-19 has disrupted the world economy in unprecedented ways, that doesn’t mean all hope is lost. Great fortunes are made in times of crisis. The economy will eventually recover. If you take this time to lay the groundwork, you may be able to embrace the new world with a profitable business.
True entrepreneurs embrace adversity. If you’re serious about starting a business, think of this time as the ultimate test of your endurance. It may not be easy, but if you can survive in uncharted waters, you’ll have a much greater chance of making it once things begin to normalize.
It’s prudent to be cautious and not risk more than you can afford to lose. But if you have the time and stability, why not invest it in creating a new income stream or opportunity. Here are a few examples of it’s a good time to strike if you’ve been thinking about starting a business.
Low-Interest Rates
In an effort to stabilize the economy, the Federal Reserve has cut interest rates on loans to historic lows. Although this rate cut won’t last forever, it will likely take some time to fully rebound.
Following the 2008 Housing crisis, the Fed took the same action. Although they eventually made a rebound from zero, they never fully recovered. In 2006 interest rates were over 6%. In 2009 rates were cut to 0.5% and since they have not gone above 3%.
Although it’s difficult to predict what will happen next because the current situation is both an economic catastrophe and a health crisis, it’s reasonable to predict that the interest rates will remain low until the economy stabilizes.
This means there will be a window of time where you can get cheap loans. It may be tougher to qualify, and you’ll need the patience to predict the right moment. For now, most big banks are swamped with loan requests. If you’re just starting a business, it may be wise to wait until the dust settles.
But at some point, the pent-up demand will force banks and financial institutions to issue loans to rebuild businesses that were decimated by COVID-19. The federal fund rate is unlikely to increase until the economy stabilizes leaving a window of time where cheap loans will be available.
If you’re prepared, you could catch this wave and secure working capital that may be considerably cheaper than it would have been last year or will be in the next few years.
Leveled Playing Field
Change is inevitable. The world will not look the same after coronavirus. Something may change for the better and some for the worse, but what’s clear is that things will be different.
Many businesses and even entire industries will be reshaped. If you’re starting from scratch, it may be easier for you to adapt than a competing business that has been doing things a certain way for years. It’s like learning a language when you’re a child vs learning it as an adult – children tend to learn quicker because their brains are still malleable and receptive to new information.
Although small businesses will likely suffer more than large corporations, everyone is hurting in this crisis (except maybe Netflix and Amazon). When the world reopens, there will be gaps in the market everywhere created by the devastation caused by COVID-19.
Nearly every industry will need fresh ideas once the dust settles and if you have any, now is the time to step up. Healthcare, retail, hospitality, politics, sports, and education are all industries impacted by COVID-19. They will need talented entrepreneurs to help rebuild them.
No one knows what’s coming next – So your guess is as good as any. If you can learn to embrace the uncertainty, you have a good chance of succeeding.
Content Demand
The quarantine has forced all of our lives onto the internet. For the next few months, most of the world’s attention will be to the computer screen. The sudden shift may be jarring but it has some advantages.
People are consuming intense amounts of digital content and are continuously hungry for more. If you have writing skills or the ability to create informative videos, now is the time to start creating.
If you’re eager to start a business but hesitant to spend money during a recession, creating content is a cost-effective way to market your ideas. Start a blog about problems facing your industry or another related topic or a YouTube channel centered around your business.
Content production is a good way to build a fanbase. It’s also great for connecting with other thought leaders in your field. Before you know it, you may have enough followers to launch a website or build an email list. Then once society begins to readjust to the sunlight, you’ll have an impressive contact list to leverage.
COVID-19 is an unprecedented disaster. These suggestions are not to make light of the tragedy or suggest that starting a business during a world crisis is easy. But there is a silver lining in every situation. If you look for the opportunity, rather than the downside, you’ll be one step closer to realizing your dreams of being an entrepreneur.
