Are You Considering Opening a New Business in 2020? Take These Tips into Consideration

by Edgar R. Olivo

Is being a business owner something you want to do this year?

Did you have to close a business during the pandemic and now you are thinking of starting over?

Are you thinking about leaving the corporate world to start your entrepreneurial journey?

If you answered yes to any of these questions, please read the following considerations before making this big decision.

Starting a business in the current economic climate is a mixed bag — there is a global pandemic threatening our public health, social unrest for the injustices committed in our colored communities, record unemployment rates and daily business closures. This does not sound like the fertile grounds for a small business, but the world is ever-changing, and the truth is, it may never feel like the right time to start a business.

But there are opportunities to seize. How to seize them and which opportunities to seize are the real questions. The key is to study the past, observe the present, and think about the future.

If you find yourself in a situation where you are seriously considering investing in a small business, answer this question first: What problem are you solving?

In a world full of problems, the business models that are doing the best in this current economic climate are the ones solving important problems. I can prove this simply by mentioning a few products — like toilet paper, masks, hand sanitizer and disinfectant.

But, even suppliers of basic necessities struggled to keep their supply chains stable, as we all saw and experienced in the empty shelves at our nearest retailer at the start of the shutdowns.

Here is your first consideration: Try to solve a supply chain problem. Investing in manufacturing is not necessarily the first move a small-business owner will make, but consider this: Can you make any products at home? Many small-business owners have already outgrown their garage by making products like personalized masks and organic soaps. If you can solve a problem by making a product, do your market research and consider exploring this as an option.

Aside from making products, specialty services are also on the rise. Do you have an expertise that can help people or businesses? Do you have any special skills that other businesses need, such as writing, designing, selling or teaching?

Here is your second consideration: Try setting up a service you can do virtually or with very limited personal contact. Virtual platforms such as Zoom can provide an excellent vehicle for generating revenue for you as a new entrepreneur. In addition, you can work from home and avoid paying rent at an office. Make sure to create a sharp online presence to give your future clients the impression you are professional. Make sure to study your market to understand what your clients need and how your competitors are filling this gap.

Finally, your third consideration and the most important one: Your own mental and financial strength. What is your own tolerance to risk? Can you afford to start a business? How much are you willing to invest? How much time do you have? Is it something that will make you happy doing it?

To start a business during a pandemic will require you to be visionary, resilient and informed to succeed. You need to visualize success for yourself and your customers, be resilient to overcome any market shifts, and informed to make the best decisions for the long run.

Registering a business is relatively simple. You pay $50 to incorporate your LLC with the state, $0 to register your EIN with the IRS, and then open a business account at your bank. For less than the amount you would spend on a road trip or an expensive dinner, you could be the owner of a legal entity.

Starting and growing a business is a different story.

Start by drafting your business idea on a simple business plan and test your idea with your most trusted friends or relatives. Get their input and gather testimonials from people around you. This will give you a sense of what you can expect when you launch your idea and whether or not it is something you still want to do. Make sure to do research online or talk to a business advisor before starting.

It is great if you have an idea that can solve a problem, and it is really great when a visionary person decides to act on it. Remember, starting a business is not just a financial investment; it is also a time and energy investment. You want to make sure you align your decision to what satisfies you the most and solves a problem at the same time. Alignment in those areas is what I call the “sweet spot.”

EDGAR RAFAEL OLIVO is a bilingual business educator, economic advisor and contributor for several media outlets. He’s a nonprofit executive who is passionate about education. He is certified in finance and data analytics and holds a business degree from Arizona State University.

Para la versión en inglés de este artículo, haga clic aquí.

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