There is Never a Bad Time to Start a Business
Securing the money needed to start, run or save a business is never easy. It’s never impossible, but economic, political and societal factors can often determine how easy funding is to find and secure. Anyone with an eye on the financial markets will know that 2020 has been a turbulent year. In times of uncertainty, people often retreat and hunker down. That’s a natural instinct. As humans, we often think about self-preservation before all else. However, in business, that’s not always the best way to be.
Ask an investor like Warren Buffet what they do when everyone is selling and his answer will almost always be “buying”. In his words, “bad news is an investor’s best friend”. This doesn’t mean you have to be reckless and take unnecessary risks. However, if you want to get ahead of the pack, there’s value in making moves while everyone is standing still. With that being true, the financial woes of 2020 or, for that matter, any other year, shouldn’t be a barrier to entry.
Don’t Let the Headlines Deter You
If you want to start a business, don’t be put off by what the headlines say or how interest rates are being set. If others are stagnant, don’t be afraid to make moves. 2020 provides a perfect example of this concept. With COVID-19 restrictions ravaging businesses, most people were focused on surviving. At these moments, making use of government-backed initiatives is imperative. As explained by Funding Options, the Coronavirus Business Interruption Loan Scheme (CBILS) is a scheme designed to get lenders lending and struggling small and medium companies borrowing.
CBILS provides finance to businesses impacted by COVID-19. The main incentive for lenders and borrowers is that the government provides a Business Interruption Payment to cover the first 12 months of fees and interest. The guarantee is good for ten years, with the idea being the CBILS makes it easier for businesses to borrow and stay on top of their repayments. To put it another way, it’s a financing option that can keep businesses alive and, moreover, give them the means to innovate and adapt to life after COVID-19.
The need for a scheme like this links to the idea that there’s money to be made if you’re willing to move when others aren’t. As we’ll discuss in a moment, Uber started during the financial crisis. So, while 2020 may not seem like a great time to launch a new venture, it brings us back to the idea of not being put off by the headlines and actually examining the current situation. By understanding what your options are, you can get a much better perspective on what’s possible in business.
Outside of CBILS, looking specifically at business overdrafts, it breaks down the alternatives to traditional funding options. Working under the premise that it’s “harder to get traditional business overdrafts” than it once was, Funding Options offers an overview of revolving credit, cash advances and other financing methods. Of course, money is only one part of the business equation.
If you’re not offering something of worth, all the funding in the world won’t keep you afloat. Perhaps the most overlooked benefit of a lull in global business is opportunity. When things are going well and everyone is thriving, it can be hard to spot an opportunity. In times of plenty, you can’t see where the gaps are or what people need but don’t have. During a recession, the opportunities are much more obvious. For example, Uber launched in 2009 and expanded internationally during the 2011 financial dip.
Times of Crisis Create Opportunities
However, while others were failing, Garrett Camp and Travis Kalanick spotted an opportunity. With technology improving and people wanting a cheaper alternative to taxis (because the general population’s disposable income was lower), Uber was born. Today, the company makes upwards of $14 billion/£10 billion each year because its founders spotted a gap in the market. The recession not only created a demand for cheaper travel, but it also exposed a cultural desire. People wanted more convenience. Uber allowed people to book, pay for and track their journeys via an app, thus reducing waiting times and uncertainty.
Then, of course, it also created jobs. Virtually anyone with a car could become an Uber driver and earn money. During a problematic time, Uber identified a concern, seized an opportunity and offered a solution. That’s the key to creating a successful business not only during a recession but at any time. However, when everyone else is hiding under the duvet, it’s those who put their heads above the parapet that spot opportunities. Providing you have the right idea, understand how to manage your finances and work hard, there’s never a bad time to start a business.