The pros and cons of launching a startup
There are always going to be challenges when launching a startup, especially during these difficult times.
Success or failure can often depend on your business model and the sector your work falls into. If your startup is going to be providing an essential service and/or can identify a niche during the pandemic, you’ll most likely be successful.
Just look at the success of Amazon during this time, which has created more logistics-related business opportunities.
There are cons to consider, too – investors may be pickier, and budgets and funding might not be as readily available (but there are still opportunities, as you will see below).
You also have to assess your startup’s value proposition – if your startup has been created to solve an immediate problem, how can you sustain it post-pandemic?
Startup success during a pandemic
There are a number of examples of startup success during a global crisis. In the past, Microsoft, Burger King and FedEx have all been created amid challenging periods.
One recent example is Eco-Strat, a sustainable energy solutions micro firm set up in August 2020. It helps businesses and organisations to manage or utilise large spaces in order to reduce their energy consumption and carbon emissions.
They launched the startup during the pandemic, with ventilation and thermal comfort products being in considerable demand.
When launching a startup, it is important to ask yourself what makes sense now? What does the public need that your startup can provide?
At the moment, the most successful industries are financial technology, e-commerce, food delivery and businesses focused on sustainability.
Why? They all have unique value proposition, and provide an immediate service and/or unique products which resolve an immediate problem.
To elaborate, businesses in e-commerce and food delivery help people work around the current rules and restrictions.
Sustainability, particularly in the clothing industry, offers consumers the chance to avoid fast fashion and to sell on clothes that they’re no longer wearing (perhaps due to an extensive period of working from home).
For example, Manchester’s The Shirt Society used this niche, launched during the pandemic and have continued to thrive.
Should startups change for the pandemic?
When it comes to crises, it is important for startups to rapidly adapt their business models, marketing plan and financial model.
According to JP Morgan Chase Institute estimates, the average small business has just 27 days of cash in reserve. In other words, if a startup does not adapt quickly they will most likely not survive for more than one month.
Hence, new startups need to research and evaluate the likely impact of the pandemic, and adapt their business plan to fit the new reality.
However, that doesn’t mean achieving startup success comes from rapidly changing what your business offers. A startup should still focus on its core values and competence. Instead, it should look to extend and diversify its products and services.
For example, Bloom Energy is a startup based in Sunnyvale, California. The business normally focuses on producing fuel cells for electric vehicles.
In just a few weeks, however, Bloom Energy has repurposed its production line to repair and service ventilators. This has helped them achieve great success during a difficult time.
What small business support is available?
There are a range of platforms designed to help startups.
For example, Business Gateway provides support for startups and small businesses, including financial loan signposting, as well as mentoring and coaching for female, BAME and young entrepreneurs, and people with disabilities.
Startup is specifically providing financial support and advice in training grants, tax reliefs and soft loans. Moreover, loans to specific types of entrepreneurs are provided, such as business grants for women and people over 30.
BCU’s STEAMhouse Business Incubator offers startup advice, dedicated workstations, talks from specialists and much more.
BCU Advantage also provides extensive small business support for graduates.
The BSEEN business startup service will provide you with a business mentor, help perfecting your business plan, and access to grant and funding opportunities.
Looking for help in launching a startup? Get in touch today and we will provide you with extensive and experienced business support.