Tips to Starting a Small Business in 2023
Thanks to the COVID-19 pandemic shaking up the way people do business, most people around the globe have been forced to find new ways to make money and put food on their tables.
While many big businesses have floundered in this new world, some industries have come through it stronger than before. Some people, especially those with an entrepreneurial spirit, have come to see the pandemic as the potential catalyst for change, making it a prime time to start a new business.
That said, I’ll be sharing with you some important tips to starting a small business during a pandemic or economic difficulties. Read on…
Why Start a Small Business Now?
While the pandemic has had a huge impact on business the world over, it has not had the same effect on every industry. Some businesses have seen an upswing in their revenue and have come out of the pandemic stronger than before. So, while it may be a daunting time for many people, there are opportunities for a savvy business person to make the most of the changing global economy and thrive.
For your small business to be successful, there are a number of things you should keep in mind.
Choose the Right Industry
In a study by Forbes, it was found that start-ups that focus on the following have seen continued growth in revenue since the start of the pandemic and many have seen an upswing in new customers since February:
- Public cloud
- Media and gaming
- Health technology
- Video conferencing
- Software as a service (SaaS)
- Companies that specialize in collaboration software
Most of these industries rely on world-embracing technologies to facilitate business with the pandemic proving to be a key enabler in making people accept new ways to do business.
In addition to these sectors, small businesses that have adapted their offerings to devise new ways to respond to the existing or emerging needs of the public have also seen a surge in popularity. Examples of this include small clothing start-ups who have changed their offering to specialize in producing and selling face masks and shields, e-hailing services who have expanded their delivery options to include grocery deliveries, and small-scale farmers who have opened up their own farm stalls to sell produce they grow locally instead of shipping it to neighboring states.
As people see the need to change their outlook on traditional business models and embrace technology, the start-up scene should continue to grow as people start to fill gaps in the market created by the economic effects of the pandemic.
Know What Help is Available
There are several resources available to owners of currently existing small businesses as well as new start-ups that can assist with the financial strain of running a business.
In many states, small business owners can apply for financial assistance through state grants, but there is also a range of federally-funded initiatives that can help. In April 2020, The Chamber of Commerce Foundation opened a Save Small Business Fund to assist small businesses and award grants to struggling start-ups.
Due to the pandemic being classified as a nationwide emergency, businesses can apply for financial relief through an Economic Injury Disaster Loan (or EIDL). These loans are different from traditional bank loans in various ways. Some advantages include that they are not subject to prepayment fees, they have lower interest rates than bank loans, and amounts under $200,000 can be approved without a personal guarantee.
There are many options available to small businesses, so be sure to do your research to find out what federal and state-specific options are available to your business.
Plan Ahead for Your Future
While times are tough, it may be tempting for new start-up owners to save some money on aspects of the business that may not pay immediate dividends. This could include things like making sure that there is a pension plan in place to ensure that a business owner can afford to retire one day. However, starting a pension fund as early as possible will give a business owner more time to save for their eventual retirement and ensure that they do not need to continue working once they reach retirement age.
For many self-employed people, choosing to contribute towards a defined benefit plan can offer peace of mind as well as a number of other advantages. As Saber Pension explains, a Defined Benefit Plan is a powerful tool for the self-employed as they not only give the self-employed a higher contribution limit than other retirement options but also give business owners flexibility in their contributions. Financial experts can help business owners achieve their retirement and business objectives by helping them realize massive tax savings each year, leaving more money for the business owner to spend on other important aspects of running a business.
Starting a business at any time comes with its fair share of challenges; however, with the right attitude and a good business plan, a resourceful entrepreneur can thrive in even the most difficult of times.