Starting a small business during a crisis is challenging. Still, one advantage new companies are finding in the current climate is the ability to tailor business models to pandemic life and consumer behavior.
While existing businesses have been forced to shift operations on the fly, new businesses can take what's happened into account and start from there. By staying agile with their pre-pandemic expectations, startups are finding success even in an economic slowdown.
A Lower Cost of Entry
For Robert Hurlston, co-founder and chief engineer at Fidelis Engineering Associates, a Detroit-area engineering consultancy, the cost of starting the business was significantly lower with no office building (and all of the contents) to pay for.
"Essentially, the product is ourselves and our services," he says. "What we really needed to buy was some computers and some software, and that's about it. Working remotely was like second nature. We started off working remotely, so nothing changed."
Shifting Targets Out of the Gate
Many businesses starting in this time have been in the works for several years. Scrapping plans and looking at the current market has removed potential obstacles.
Located outside of Detroit, the automotive industry was Hurlston's original target.
"Automotive is still a huge part of what we do, but we turned our attention more to medical, which made a lot of sense given we're in the middle of a pandemic," he says. "We were also going to have a staffing division, but since no one needed [automotive] services, we made the decision to leave that for a while and focus on our core competencies."
Starting a Business in a Virtual World
In addition to shifting audiences, the pandemic has required businesses to rethink how they connect with customers.
Leadership development and career strategist Lee Crockett of Lee Crockett Consulting says her original vision for her business involved speaking in front of large groups.
"I had ideas for my business for several years before I actually started it," she says. "And part of that included retreats and in-person workshops, but when I launched, none of that was on the table."
Her current business model includes the same one-on-one coaching, group coaching, and speaking engagements—they're just virtual. "From a business perspective, that's all I've known. (Virtual) has given me a much larger reach ... Because of COVID, the whole world is my backyard." says Crockett.
Talibah Bayles, founder and owner of TMB Tax and Financial Services, also had a different vision for what kind of company she would start.
"Being primarily a tax and accounting service, my clients would be used to being able to walk into a brick-and-mortar and experience a face-to-face tax preparation." What she wound up creating was a business model that allowed for virtual consultation.
Less Overhead Allows for More Aggressive Marketing
Having lower than expected expenses attached to infrastructure gives new companies extra dollars for marketing.
"Having a smaller payroll meant that we could take money that was set aside for payroll and use it to our advantage," says Hurlston. He and his partner repurposed the money and spent it on marketing on Google and LinkedIn.
Bayles has also pivoted to finding clients on social media. "That's something that tax and accounting companies were gradually getting into (pre-pandemic)," she says. "I've been doing a lot of market research in the past year and I'm seeing more of us trying to make it fun to talk about taxes and accounting."
Bayles has even begun promoting herself on Instagram. "I have certainly garnered a lot of clients from Instagram posts because I do a lot of webinars." She's secured a media specialist to help her tout her webinars with 10-minute segments on Instagram.
If there is an upside to the pandemic, it's that businesses have been forced to innovate and develop creative strategies that can succeed during these unusual times.
Serial entrepreneur and founder of ThermoGears.com, Julien Raby, made innovation his strategy for success.
"One of the best ways to lead your newly established business toward the path to success is by constantly innovating." he says. "Crisis brings forward opportunities, which, if used correctly, can flip your game around."