Developing an entrepreneurial venture in times of crisis may seem difficult. However, we may find ourselves in front of a window of opportunity for those who are willing to take risks by offering innovative solutions.
Entrepreneurship in times of crisis can have some advantages such as lower start-up costs, greater flexibility, less competition and room for learning and growth.
In fact, there are experts who claim that companies created in a crisis have a higher survival rate.
In recent years we have been changing many basic aspects of our daily lives, as the digital transformation has accelerated by up to five years. Tasks such as teleworking, online shopping or video calls have gone from being anecdotal or a minority to having a much higher level of social use.
Therefore, digitization has proven to be one of the great opportunities for launching new projects, with sectors such as training, consulting or online commerce as great exponents of a world that has changed by leaps and bounds and in which users have also substantially changed their habits.
Why undertake in times of crisis
As for the reasons why it is convenient to start a business in times of crisis, here we can find a few:
- Lower initial costs. In periods of crisis, many companies reduce prices, which can imply that the initial costs to start a business are lower. This is an opportunity for entrepreneurs, investing less money, to have chances of success.
- Greater flexibility. With entrepreneurship, there may be a greater ability to offer customers customized solutions with a higher degree of flexibility by adjusting to the specific needs of users.
- Changing consumer habits. These changes result in new needs that open the doors to entrepreneurship, being attentive both to what customers may be demanding and detecting new needs that may exist.
- Less competition. At times when other companies have to reduce their structures (or even in some cases disappear), the gap can be used by entrepreneurs to occupy that space, establishing themselves and having greater possibilities for growth.
- Room for further learning and growth. Without excluding the fact that the project undertaken may or may not be successful, doing so in a period of crisis also serves to learn and grow as an entrepreneur, taking advantage of the opportunity to develop leadership skills, resilience, and the ability to develop a new business model.
Recommendations for entrepreneurship in times of crisis
Having analyzed the reasons why it is a good idea to start a business in a period of crisis, we are going to see a series of recommendations on how to do it:
It is not easy to think carefully and in detail about how to do something different, and this can be especially relevant to achieve long-term success.
In this phase is where we can ask ourselves a series of questions such as what the value proposition is and what it solves, if there is already some kind of solution to that problem and how the product improves on the competition’s (if any).
Planning and training
Regardless of whether the venture takes place in a moment of crisis or not, it is necessary to have a monitoring and strategy based on trial and error, without the venture being the mere development of the idea and waiting with arms folded to see what happens.
In order to structure the action plan, a series of questions must also be asked (from the form of financing to what will be the monetization, including how to develop the market research or how long the research phase will take), knowing which tools will be used and knowing who will be part of the project.
On an ongoing basis, constant training is crucial since it is impossible to have knowledge of all subjects. This continuous training is not exclusive, even if you may be surrounded by a good team or even have some kind of external consultancy.
Management and financing
It is very important to know what the day-to-day running of the new business should be and how decisions will affect the future of the company.
It is also essential to be able to count on financing to achieve results and to be able to move forward with the business and avoid economic obstacles.
Although it is not always easy to convince investors, if the idea is good it will end up attracting attention, without losing sight of the fact that being able to develop modifications and variations helps to implement improvements on the original proposal.
Thus, and although at first it may seem contradictory, times of crisis or recession are suitable for entrepreneurship, despite the fact that instinct may tell us otherwise, due to an inertia to reduce risks and expenses to a minimum while waiting for the situation to recover.