Our Tips For Starting a Business Post COVID-19

14 January 2021|Related :

Despite the uncertainty surrounding the times ahead of us, there is no reason why you can’t consider starting up a new business following the coronavirus pandemic. In fact, some of the most successful businesses today were launched in the aftermath of hard times and economic crises. 

US companies such as Whastapp, Uber, AirBnb, Groupon and Slack were started right after the 2008 global economic crisis. UK companies Pure Gym and MVF are other examples of post-crisis startups that became incredibly successful. Pure Gym was set up in 2008, and reached nearly £100m in sales by 2015. MVF was founded in 2009, and had a revenue of £39m in 2016.

The coronavirus pandemic has had a significant impact on almost all industries, creating challenges that some businesses could not overcome, resulting in tens of thousands of businesses failing. This is why diligent research, planning and preparation is essential before starting your new business. Here are our top tips for starting a business post COVID-19.

Ask Yourself This: Why is My Product or Service Relevant Now?

Good ideas can come at any time, but with the economic and physical effects of coronavirus likely to last at least for another 6 months, you need to think realistically. Ask yourself if the service or product you’re hoping to sell will work in the next 6 months, 12 months, 5 years and so on…

There is no point starting a business now that won’t work for another year until things are back to normal in the same way that there isn’t much point starting a business that will only work during the pandemic and will likely fail thereafter. 

A crisis such as coronavirus increases consumer needs for some things and decreases need for others. For example, orders for home fitness equipment soared by 5813% between March and July, whilst gyms have seen a 37% loss in revenue. Understanding what the market needs and what it doesn’t can help you to judge whether or not your product or service is relevant now and if it will continue to be so post crisis.

It may also be worth considering if your business can adapt for when the situation changes. For example, security software company Athena Security usually produces software that allows security cameras to detect firearms in real-time, however, since the pandemic, they adapted their services to produce thermal cameras that can detect when someone has a high temperature (one of the symptoms of coronavirus).

Use Social Media to Your Advantage

Even before the coronavirus crisis began, social media was one of the best ways to raise awareness and market your business. According to the Digital 2020 report, over 3.8 billion people use social media worldwide (over half of the total population), and with people spending more time online instead of going out, this is the time to get your business out there. Not only do you have access to a wide audience, but social media can be a relatively inexpensive tool which is great for companies starting out with a lower budget.

Put Yourself in the Shoes of the Investors You Meet

Understanding the way in which investors are currently thinking can work to your advantage. There are two types of investors during a crisis: one will be reluctant to hand out cash and will limit or pause their investments, the other will be a risk-taker, looking for good opportunities with low valuations to invest in.

Knowing or judging which type of investor you’re approaching can help you to know just how reassuring and persuasive you’ll need to be. Whilst the latter may not need much persuasion, the former is more conservative and will therefore require detailed information about your recovery strategy should things not go to plan. 

Being fully transparent with investors is the key to success here. If there are any challenges you’ll likely face, make them aware and let them know what you plan to do to address them. These challenges could include changes to the market you’re working in or anything you need but don’t yet have.

By explaining all of this to them, they are given an idea of how you would handle situations when times get tough and whether you have the ability to make good decisions. This will either increase or decrease their confidence in you, so it’s important to do plenty of planning and research beforehand to make sure you can answer any difficult questions they may have.

Get Professional Advice

Getting advice from a chartered accountant is worthwhile for any startup, not just one in or following a financial crisis. Many people who decide to start a business do so because they have a great idea, not because they’re experts in the legal, financial and fiscal aspects of running a business. Thankfully, you don’t need to be an expert in these fields to succeed, you just need the support of a team such as ours at Ryans Chartered Accountants.

We can help you to decide on the best structure for your business (sole trader, partnership or limited company) and create a business plan which is essential to helping you achieve your short and long-term objectives whilst also reassuring investors. We’re constantly looking out for changes to the laws and any financial news, meaning we can give you the most up-to-date and relevant advice.

Manage Your Growth

Before you go ahead with any plans to make your business grow, consult your accountant. They can advise you on the positives and the potential downfalls to your plan. Not only can an accountant help you with your own plan for growth, but they can also identify where your business can grow in other areas and guide you when there may be unexpected growths, as these can be just as problematic as large declines, without the right preparation, after all, your business has the potential to become just as successful as Whastapp, Uber and Groupon.

At Ryans, it’s our job to help you understand all of the necessary steps involved in starting up a business, as well as the ones that will help your business grow. If you’re looking to start a business post coronavirus crisis, get in touch with the team at Ryans who will be happy to help and answer any questions you may have.

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