Written by CMG News Contributor, Doug Carleton
Even though it may seem somewhat counter-intuitive, if you have been thinking about starting a new business, this might be a good time to start looking around the landscape to see what opportunities might be out there.
Just consider a few things:
There may be less competition for scarce resources.
Whatever changes we face now and in the coming months are going to create new customer needs.
If you need to hire someone, all the layoffs that have occurred recently may allow greater access to some top talent.
Interest rates are extremely low.
If you need equipment, there may be a lot more on the market now as businesses sell off equipment.
In many types of real estate, landlords are facing more and more vacancies as companies fail or shut down. This means that lease rates and terms may become considerably more favorable.
There are and will be so many challenges and opportunities that a creative entrepreneur may see a new way to solve a challenge or problem that didn’t exist three months ago.
One great example:
Jim McKelvey was, among other things, a glassblower. He had a former intern named Jack Dorsey. McKelvey lost a sale of one of his artworks because he couldn’t accept American Express credit cards. His frustration led him and Mr. Dorsey – neither of whom knew much about the world of credit card transactions, to try to solve it. A new company was born. Square – now valued at approximately $30 billion. It was near the bottom of the 2008 recession. People told him and Mr. Dorsey (now CEO of Square and Twitter) that they were crazy. But Mr. McKelvey pointed out that space was cheap – New York gave them free rent, and it was much easier to hire programmers because so many had lost their jobs.
A few cautions:
If there is one thing to keep uppermost in your mind, it is that people are scared. Customers may not come back as fast as you would like and if they don’t perceive that they will be safe, they probably won’t come at all.
Don’t set your expectations too high to start with. Be smart about spending money. Keep your overhead low; lean and mean to start with could save you down the road. It’s much easier (and more fun) to increase your spending as you start to grow rather than having to cut back.
The media is not your friend. This is not intended as a criticism, but the media has lots of space to fill and ads that need to be sold every day, so logically, they will continue to write about the virus – often about how it is affecting the economy, which may cause your customers to be cautious for a longer period.
In times of crisis, established institutions and businesses are set in their ways tending to make them averse to taking chances. In that vacuum lies opportunity. Periods of prosperity often favor the incumbents but hard times can bring forth the upstarts who will help fuel the next boom.
This blog entry is a slightly edited excerpt from Doug Carleton's 'The Daily Life Of A Small Business Owner' series. Doug is a mentor with SCORE, Startup Virginia, and Lighthouse Labs, and has 25+ years of experience in small business finance including 12 years in SBA lending. To contact Doug directly, please email him at email@example.com.