Life is all about striking a balance. It’s always a matter of weighing consequences and determining the benefits of a decision, along with whether or not we can accept the outcomes.
The COVID-19 pandemic has struck a major blow to the economy, forcing many businesses to close or lay off a significant number of employees. In a situation that has seen the worst recorded unemployment rate, is it prudent to start a business? What are the pros and cons of starting a new venture in today’s climate?
There Are a Lot of Job Opportunities
Closures and layoffs do not necessarily mean that there is a lack of work to be done. Larger companies simply do this to ensure that their company can survive for as long as possible, especially when one key characteristic of economic downturns is that the future is uncertain.
This is where the gig economy comes in handy, where companies aren’t burdened to pay employee benefits to contractors. There is a lot of work to be done if you’re able to find it. You may even be able to provide job opportunities to workers who were recently laid off. You have a chance to hire skilled workers, especially with the assistance of an HR solutions company like GNA Partners to help businesses with recruitment and effective job placement.
New Problems Create a Need for New Solutions
Another big reason why starting a business during a recession is a good thing is that recessions come with new problems. This is especially true during a pandemic, where the lives of people have been uprooted, with real need to adjust to the new normal.
This need to adapt creates a space in the market for new solutions. Services such as grocery and food deliveries have been especially popular during the pandemic because of the fact that people have been asked to stay home. Businesses that are able to introduce an effective solution to the problems of their target market will almost always grow.
The Cons of Starting a Business
The issue that’s likely to cause problems with starting a business during a recession is that people are set to hunker down and stretch their resources to the limit. This means that investors are less likely to shell out money to fund a business. Even self-funded businesses may have difficulty in growing from customer revenue because of the general mindset that they need to reduce spending.
Recession-bred startups also have a unique disadvantage in terms of branding and marketing, where it’s going to take a lot of time to establish inbound interest.
This recession is unique in that the parameters created by the pandemic signifies that internet traffic is particularly high during these times, which means that novel businesses actually have a chance to establish an online presence at a quicker rate. Keep these factors in mind when considering whether or not to launch your new venture.