By Lisa Crocco
Starting a business during a pandemic and economic downturn may not be at the top of everyone’s mind. But if you have always wanted to start a business, now may be the right time.
According to CNBC, Index Ventures Partner Jan Hammer said, “If history gives us a good precedent, out of the last crisis — which was the great financial crisis of 2008 to 2010 — a cohort of extremely resilient businesses have emerged.”
History may be on the side of entrepreneurs building their businesses at a time of adversity. The coronavirus could after all incentivize “purpose-driven” people to launch small businesses focused on various verticals, especially health care, medicine and delivery services.
While new business applications have overall decreased in 2020, Forbes reports an uptick in applications for the end of April and beginning of May. This slow, but hopeful, rebound shows that U.S. entrepreneurs are still moving forward with starting new businesses.
If you have been furloughed, laid off, had your hours reduced, are working at home now and have more time on hand or would like to benefit society in your own way, starting a business can be a smart move. What better time to flesh out the business idea you have always dreamed about but never had the time to devote to?
Why You Should Start a Business During a Pandemic
Here are some great reasons and motivators for you to start a business during a pandemic.
Opportunity to Create Jobs and Help the Economy
Over 43 million people are unemployed due to COVID-19. People need jobs now more than ever. Launching a business can potentially open the door for others to become employed by you.
Despite certain changes as the current environment continues on, pre-COVID-19 stats for business owners providing jobs were positive, with the SBA reporting: “The number of small business employer firms (fewer than 500 employees) grew above the pre-Great Recession peak four years ago and steadily increased through 2019. Entrepreneurs created nearly 500,000 more new employers compared to the nadir in 2010.”
New Opportunities Waiting to be Explored
There are particular business ideas and needs during this pandemic that are more highly desired now. Some examples include: cleaning services, face masks, medical equipment, delivery services and remote fitness instruction. These are all services and products people are leaning on during this time. Starting your business to meet a current need during the pandemic can be a way to gain fast sales and customers.
However, this is not to say your business idea doesn’t weigh if it doesn’t fall into any of these categories. You can carve out your idea further to make it into something that will benefit the world from a broader perspective. Isn’t that killing two birds with one stone?
Easy Access to Small Business Funding
Now is a great time to receive small business loans and funding. The Small Business Administration (SBA) provides a number of loan resources for small businesses to utilize when operating their business.
Even though our nation’s small businesses are facing an unprecedented economic disruption due to the coronavirus outbreak, the President signed into law the CARES Act, which contains $376 billion in relief for American workers and small businesses. Interest rates have also been slashed to nearly 0 percent by the Federal Reserve, making interest on credit cards and loans lower.
Innovation, Agility and Income
Starting your own business, based on the premise of innovation and agility, is what the world needs right now. Apart from bringing you additional income — according to PayScale the average income for a small business owner is around $68,000 a year — it also feeds into the “necessity-driven” business need of the hour.
There are surely some gaps that big businesses and Silicon Valley have left, making a great opportunity for small businesses to strike with the right solutions the world needs right now, more than ever.
Tax Benefits and Write-Offs
With owning a business there are certain tax benefits that you now become eligible for. One of the biggest benefits includes the fact that you can write off your business expenses, such as office space, accounting software, office equipment and devices, your internet bill and more.
And forming your business as a limited liability company (LLC) may be the most helpful for a business owner come tax time. An LLC combines the pass-through taxation of a partnership or sole proprietorship with the limited liability of a corporation. You will pay taxes on your personal tax return, rather than paying taxes as a corporation. This means you will not pay taxes twice (as a corporation and as an individual), but rather only as an individual.
Types of Businesses to Start During the Pandemic
Eager and inspired to start a business during this pandemic, while you’re stuck indoors? Here are some great business ideas for you to consider:
- Business Consultant
- Online Fitness Instructor
- Ecommerce Business
- Cleaning Service
- Delivery Service
- Freelance Writer/Copywriter
- Social Media Strategist
- Online Tutor/Virtual Trainer
- Website Designer
- Career Coach
It might also be reasonable to ask yourself these questions before you take the first step in that direction:
- Does my business idea align with the possible problems the crisis might have evoked?
- Can I offer better solutions than what’s currently available, if at all?
- Do I have access to the loans and funding I might need to get started?
- Am I eligible for these loans and funding?
- Do I want to form an LLC, a corporation or start as a sole proprietor?
- Can I create jobs and benefit the bigger pool of talent that might not have the option to start their own business and are looking for work?
Start Your Business Today
According to the U.S. Small Business Administration, there were 30.7 million small businesses in the U.S. in 2019. If you start a business, even now during the pandemic, , you can join all of the small business entrepreneurs who also made the decision to one day craft their business plan and take the leap. So don’t let this “bonus” time while stuck indoors go wasted — start your small business today and finally make your dreams become a reality.