Have you ever heard of a black swan event? Hint: we’re not talking about the psychological thriller starring Natalie Portman.
COVID-19 was a black swan: an unforecasted event that has caused serious upheaval. No one could have known the impact this pandemic would have on people or the economy, and we’re still trying to understand what this crisis will mean for the future.
But in the midst of this unprecedented uncertainty and volatility, there are people like you. People who have a fire inside them that just won’t quit. You have an idea for a business, even though the world has thrown a huge red flag in the way. What looked like a straight, smooth path now feels like a step off a cliff while wearing a blindfold.
You’re probably wondering if your business would survive if you launched it today. You might even be tempted to put your dream back on a shelf until the right time comes along. But as you’re about to find out, “the right time” to start a business isn’t so easy to nail down; for example, some businesses can thrive even during a crisis. So let’s equip you with the knowledge to decide for yourself when it’s time to take the leap.
Is it a good time to start your business?
While there isn’t one right time to start a business, there are some basic questions you should think about before you get in too deep:
1. Are you ready to run your own business?
What’s your business plan? Where’s the money coming from? If you’re serious about striking out on your own, it’s time to dig into the details and see if you have what it takes to get a new business off the ground.
We rounded up all the nitty-gritty details here, and it’s a good place to start: 17 Steps to Starting a Business
If the steps in that list don’t melt your brain, you’re probably ready to do the work it takes to start your own business.
2. Can you afford to work for free?
Every new business is different, but one thing is pretty common across the board: unless you’re the darling of Silicon Valley and have investors throwing money at you, chances are good that you won’t cut yourself a check for the first few years.
It’s a better time to start your business if your savings are in good shape, or you’re prepared to downsize and simplify your life to make this new venture happen.
3. Is there demand for what you’re selling?
Does your idea have wide, popular appeal, or at least the potential for a smaller, enthusiastic following? The thing about businesses is that they have to make money to stay open. At the end of the day, your concept is only viable if people understand it and are excited enough about it to give you their money.
Does that sound like your idea? Be honest with yourself. If you think your current idea falls short, that doesn’t mean it’s a no-go. It just means it’s time to do a little more research and find the niche where your business idea can make a difference with a few adjustments.
4. How will you set your business apart from the competition?
Too often, people launch a business without considering the competition: not just how many competitors there are in the market, but also how they can differentiate themselves from these competitors.
Customers today are overwhelmingly shopping for an experience more than a price tag. In what creative ways can your business offer them an experience like no other in your market?
remote-ready business in 10 steps
Is there a right time of year to start a business?
Besides considering market health and your own stamina, another important decision to make is the season in which you want to launch your business.
We won’t tell you there’s a magic month that is most successful; that’s sadly not the case. Instead, think about the nature of your business, and human nature altogether, when it comes time to decide when to open. When are people most going to need what you’re selling? For example, if you’re a clam shack in the U.S., you better be slinging tartar sauce by Memorial Day if you want to stay in the game. On the flip side, opening a ski shop in July might not be your best bet.
If your schtick isn’t seasonal, think about the vibe of your business and when people will most be excited for what you have to offer. A lot of new businesses start in the spring, after taking the first few months of the year to get things up and running. It’s not a bad idea to launch at a time when there’s fresh new energy in the air and people are looking for something to invigorate their lives after winter… but will your business be negatively affected by everyone going on summer vacation?
We wish we had a simple, straightforward answer for you here, but as you can see, it really depends on your idea and the customers you plan to serve. Be sure to give this some serious thought as you set up your business plan, so you start off on the right foot.
6 recession-proof businesses
There are some industries that remain steady no matter what the markets are doing. If your business idea falls into one of these categories, it might just have the wherewithal to weather a run-of-the-mill economic downturn:
1. Grocery stores
It’s simple; people always need to eat. Preparing your food at home is often much more affordable than eating out, which is why restaurants are one of the first sacrifices people tend to make when a recession hits. Grocery stores, in turn, pick up that slack and often see an increase in revenue during recessions.
2. Dollar and discount shops
Bargains become the holy grail in a recession. In fact, when an economic downturn looms, investors know to start eyeing and buying up the stocks of dollar stores, because they always pay off, literally.
Thrift and consignment shops also do well in a recession. People like to sell off their old, unworn clothes for a few extra bucks and feel the rush of digging through the racks without spending a fortune.
As long as parents have to work, there needs to be a place for kids to go. Whether it’s actual childcare centers or daycares run out of someone’s home, this is a service that is usually recession-proof.
(As you might have already guessed, daycares weren’t safe from our current black swan event, but more on that later.)
If eating out seems like a luxury to people in a recession, a brand-new car is a total extravagance. And because consumers are less likely to buy cars in a recession, and more likely to travel by car than other modes of transportation, mechanics often see an uptick in business as people bring in their older models for maintenance.
5. Home repair services
Toilets, furnaces, and roofs don’t know what a recession is, so you can count on them to act like it’s business as usual in an economic downturn. That’s why the businesses that help maintain these essentials—plumbers, roofers, and the like—see steady revenue no matter what the markets do.
People still need to pay their taxes when the economy takes a turn. Plus, business owners and other folks with assets to protect often search for ways to cut costs and protect themselves when money gets tight. If you can help people look after their cash flow, that’s a pretty recession-proof skill to have.
5 industries that are booming in 2020
Now, take everything we’ve said about recessions and the businesses who thrive during them and throw it all away.
Okay, not exactly. But thanks to COVID-19, 2020 has been no ordinary recession. Places that seemed bulletproof have suffered due to massive unemployment and strict stay-at-home orders, like daycares and mechanic shops and even longtime local restaurants. Meanwhile, other businesses have made serious comebacks during this period, to everyone’s surprise.
Let’s see who’s doing well, even during such an unexpected event:
The stay-at-home orders trapped us all in our houses, with not much to do but worry about the three meals a day we had to cook for ourselves. And that got old… really, really fast.
This was good news for local restaurants who were able to pivot to offering take-out and delivery services. In fact, thanks in part to COVID-19, the trend of ghost kitchens has exploded nationwide. As restaurants shift from sit-down to 100% delivery, there’s no longer a need for a real storefront with seating—an industrial kitchen with a fleet of delivery drivers will do. Given the increasingly busy lives of Americans and the lingering effects of this pandemic, ghost kitchens on a larger scale could be here to stay.
And don’t forget the alcohol; the spirits-delivery app Drizly saw a 300% spike in sales in March of 2020 alone.
2. Local farms
Here’s one no one saw coming: if you told an economist that small family farms were going to make a massive come back in 2020, they probably wouldn’t have believed you. But it’s true!
Across the United States, when grocery stores went dry of meat, eggs, and fresh vegetables, the short supply chain of local farms became a godsend. One-off purchases and CSA farm-share subscriptions have both skyrocketed, from Austin to Boston.
And with a little food insecurity plus lots of time at home, more and more people are looking for ways to put everything they need in their own backyard. That means an increase in people starting their own vegetable gardens, and some chicken breeders have seen a 200% increase in their sales.
3. Drive-in movies
You read that right. With cinemas shuttered across the country and reopening dates uncertain, the summer of 2020 has seen a resurgence in drive-in movie theatres: a blast from the past that just so happens to be pandemic compliant.
As the safety measures wear on, people are craving a communal experience more and more. Drive-in movies offer a combination of social distancing and nostalgia for some— and for others, a totally new experience—that shakes off the cobwebs of shelter-in-place.
Drive-ins. Who knew?
4. Hobby shops
Americans decided to get crafty when the stay-at-home orders rolled in. Whether it was knitting, painting, or doing puzzles, stores stocking these pastimes saw a real uptick in revenue.
Arts and crafts live in a sweet spot of offering an escape, coupled with physically creating something from scratch. It’s no wonder that folks have gravitated toward these hobbies that lend them a sense of accomplishment, control, and creativity during such an uncertain time.
5. Remote work services
According to a recent Gartner survey, 74% of companies plan to leave at least some of their employees remote even after we’re in the clear:
This statistic will undoubtedly change the face of office work, and creates an increased need for services and technologies that support remote workers. Whether it’s the communications systems a business uses or even a consultant who can advise on best practices for distributed teams, the future appears to be wide open for businesses who offer services in the remote-working sphere.
Knowing when to start a business
The nature of a black swan event is that it’s impossible to see coming. There will never be a perfect time to start a business, but if you have a good idea in an in-demand market, it might be the right moment to take the leap.
The businesses that have done the best in this crisis have one thing in common: they had a strong yet agile foundation that made them ready for anything and able to pivot on a dime. Keep this in mind as you start mapping out your own business plan.
It might not be a pandemic that blows through the economy next time; it could be something we haven’t even imagined just yet. That’s what a black swan event is all about. So while you can’t anticipate the event itself, you can study the overall lessons that businesses are learning right now—about agility and customer retention through a crisis—and bake them into your big idea.
Does the time feel right? Keep reading for a step-by-step guide on writing a business plan.