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Entrepreneurship during times of uncertainty

Economic downturns ignite entrepreneurship

Author: Zach Dilworth Thursday May 14, 2020
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Starting a Business During an Economic Downturn

With record unemployment numbers, job candidates are having a tough time getting job interviews for positions suited to their experience. In fact, it’s unlike any other period of time as job interviews are unlikely to take place in an office due the social distancing measures put in place to reduce the spread of Covid-19. As a result, employment options are limited, and the government stepped in to allow unemployment benefits for many of those who are not normally eligible such as contractors.

Think about it, if you had $2,400 coming in each month from the government and you have limited upside to looking for a job, it might just be a perfect scenario to start your own company.

This virus-related recession was self-inflicted so it has several variables that are uncommon to most economic downturns. But, if we look back at the previous recession, we’ll see how some people turned misfortune into profitable business ventures.

Economic downturns lead to new ventures

During the great recession, there were few job opportunities, and many people became an entrepreneur out of necessity. Sure, they could have taken positions lower than their previous roles but that leads to underemployment and dissatisfaction. Entrepreneurs who were born out of this situation started a business during a time where most businesses were failing. But how?

Similar to a side gig startup, their business models had a similar underlying foundation: a primary source of income. One could argue that $2,400 a month in unemployment benefits is not a livable salary, but it is a salary – a salary is a luxury that most entrepreneurs don’t have. Side gig entrepreneurs maintain their full-time jobs while building their businesses so while they have their full income, they have less time. Unemployed-born entrepreneurs have plenty of time to get started but less money. It’s a different approach, but there’s still a safety net in place.

Students Lose Faith in Big Business

The great recession was a sad time as many companies were forced to lay off longtime employees. Many of these companies were “too big to fail.” This didn’t sit well with those graduating in the years to follow. There were few opportunities for entry-level positions, and many students opted to work for start-ups as they did not trust the large corporations whose corruption led to the nation’s demise. As a result, entrepreneurs like Adam Wielier decided to take action. Adam started up his business, Sunken Stone as an import/export business from a coffee shop. His company later evolved into a digital marketing agency supporting businesses with ecommerce sales. As a new business, it was hard to prove legitimacy so he started gaining clients by offering performance-based payment models.

Freelancing Gigs Became a Thing

Since businesses were reluctant to add headcount, they offered contractor roles and consulting gigs to fill the gaps. Unemployed specialists become contractors and consultants. To make up lost wages, some of these contractors took on multiple gigs and eventually needed to hire additional support to deliver on their promises. This has become a common breeding ground for side gig startups who grow as their orders grow. Professional services companies exploded during the previous downturn.

Why Now is a Great Time to Start up

Starting up does not have to be difficult. Start with brainstorming ideas. What is in demand right now? Facemasks? Hand sanitizer? Sanitation companies? Delivery services? Certainly, there has been disruption to big business and retail. However, you can not only survive, but thrive off these new opportunities.

Times have changed. Covid-19 has impacted our world and led to tragedy, chaos, fear, and opportunity. Now that states are reopening, it’s more important than ever to provide these types of services. This is the new norm. This will have multiple waves, and masks, social distancing, and cleaning are the new norm. Could this be your opportunity for success?

On another note, companies have been forced to sell their goods and services online. Ecommerce marketing agencies and freelancers in the field are killing it right now. Their demand has multiplied. Needless to say, ecommerce platforms are also performing well.

Even if these opportunities aren’t the opportunity for you, now could still be an opportunity to plan out your business offerings. Take advantage of all of the resources around you such as Udemy, Lynda, and other online learning platforms with courses that often cost less than a tank of gas. I’ve learned HTML, SEO, Video Editing, and digital marketing all from these affordable online courses.