Impact of COVID-19 on entrepreneurship and businesses
The COVID-19 pandemic has followed by social distancing, and the lock-down has hit the business market so hard. Even the well-established ones need to re-look how they manage and operate their business to keep the financial wheel turning.
Unfortunately, the startups and small businesses impacted brutally, as they have scarcer funds to manage crises. However, some say that great companies often come out during market downturns. Many innovative entrepreneurs have stepped up to help with some old or new techniques and products.
With the sudden change in the market due to COVID-19, the businesses needed to change their perspective on entrepreneurship. While some businesses have come to a standstill, there are a few opportunities that have knocked our doors. Investors are showing interest in funding potential COVID-19 solutions and also in industries that could thrive in the post-pandemic world.
So, which industries are blossoming during this critical period?
As the medical need is growing and people are staying indoors, industries like healthcare, education, entertainment, and basic day-to-day necessities are booming. Quarantine is forcing companies to push their services online that has led to a massive elevation of the technology department.
When we talk about healthcare, there are a lot of people who are in need to consult doctors. Keeping that in mind healthcare at your fingertips is in high demand. Using wearable, data, and VR, one can make care more accessible and convenient at the comfort of their homes.
As the COVID-19 situation has not resided completely; people prefer to buy either local or online. Easy access to groceries on e-commerce platforms with safe delivery assurance is the major go during and even post COVID.
With virtual reality and virtual events, the ‘real world’ goes online. Though OOT platforms like Netflix and Prime were gaining popularity before the crises, the demand has gone up more than the expectation. Besides, with the venues shut down, people are finding peace at virtual stimulation of these entertainment events.
Although the world economy has crashed drastically and the purchasing power of the consumer has reduced, they are still spending to survive and keep their mind at peace in quarantine. That is where you can hit the nail and target the needs of the consumer.
All the previously mentioned industries are some of the best ideas to invest in current scenarios. However, they need to be trustworthy and act fast! Even if you start your venture today, what you can do to make it stand stronger in current days and the future.
Here’s what you need to keep in mind:
- Your idea is addressing the long-term problem or not?
In such critical times, your idea should cater to specific, urgent, and sizable problems. For instance, you can supply masks for the health care providers, use the idle production facilities, and workers needed jobs. Hence, you could address all the three problems by training workers to produce masks with underused production facilities.
But, will the demand remain the same or even exist after five years from now?
Some demands like; patient monitoring using AI in healthcare have amplified during the pandemic. But, even post the crises, we will need easy access and efficient healthcare supplies. On the other hand, some organizations raised by providing solutions to the urgent needs might not be as critical after the situation gets normal.
To determine in which category your business falls, carry a market-opportunity analysis using data from earlier years. Was the problem existed back then, and at what scale? Also, what changes emerged in that with Covid-19.
- The balance between funding and investment
If you have received the required funding or even parts of it, make sure you use the monetary resources consciously. The key to build and sustain your business is to deeply analyze the fixed and variable cost elements for better financial management.
- Focusing on qualitative growth
Many startups measure their growth in terms of numbers, but we are in a time where the focus is on sustainability and fundamental economics. Now, businesses do need to pay heed to where the next financial support will come.
If you believe in some idea and were looking forward to it, now is the time to work on it. Focus on the quality as it will convert into better unit economics. So, when people start recognizing and using your product, you can win their hearts and loyalty in post-COVID.
- Preparing for the post-COVID market
Amidst this critical period, the next few months bring the major challenge for the businesses is cost rationalization and fund-raise. Currently, people are focusing more on saving and fulfilling their necessities at least in the short term. But, after the situation stabilizes, the aspiration to spend more on traveling, upgrading phones, etc. will be at the forefront. Moreover, using this time to build your digital presence will be a smart move to lead your business towards growth.
Many startups might not stand the test of this critical time, but pandemic has given rise to more entrepreneurial activity. So, you need to be extra cautious at every step you take from idea to execution.
Furthermore, the major dilemma here is how this will impact us in the future and what can we do to ensure that we are moving in the right direction. Will this critical time enhance the entrepreneurial and diversify our economies? Or will it further shake-up the global system? We can just wait and work on calculated assumptions.