With the COVID-19 pandemic continuing to have a major economic impact on countries around the world, thousands of entrepreneurs and aspiring business owners are wondering the same thing: is 2020 a good time to start a business? Is there any hope for my business in the midst of a recession?
Though it may seem counterintuitive, there are many reasons why this might be an excellent time to launch your business venture. Read on to learn why 2020 is a great time to start a business, as well as some ideas to inspire you.
Why a recession can be a great time to start a business
A crisis can be an opportunity. More companies are outsourcing functions that would previously have been undertaken in-house. As the job market declines, opportunities for freelancers, consultants, and small businesses rise to fill the gap.
The price of paid digital advertisement has also dropped significantly since COVID-19 as companies tighten their marketing budgets. As a startup, you can make the most of the lower advertising costs.
Necessity can also force you to take action. Take the example of Tim Chen, CEO, and Founder of NerdWallet. According to CNBC, Chen lost his job in the 2008-09 recession and was inspired to start his business when his sister asked for advice about credit cards. Simply put, the resource he would have wanted to share with her did not exist, so he decided to create it. When faced with instability in his career, Chen sought opportunity by leveraging his skills to meet a specific demand—essentially creating his own work and making himself invaluable.
It doesn’t have to cost thousands of dollars to start a business
The startup funding you’ll need will, of course, depend on the type of business you want to start. Some ambitious ventures require substantial financial investments, but you can always start smaller. It’s entirely possible to start an online business with little more than your laptop, a website, a few digital skills, and a lot of determination. Here are a few cost-effective, high-earning digital businesses that don’t necessarily require such hefty startup costs.
Affiliate marketing is a simple premise: you advertise products for another company (the merchant) and make a commission each time someone buys using your links.
Affiliate marketing has suffered from a poor reputation in recent years, due to bad behavior from a minority of affiliates and merchant companies. However, there are still numerous benefits to affiliate marketing.
At its best, affiliate marketing is about recommending products you genuinely love and getting paid for doing so. Moreover, affiliate marketing can be lucrative. The average commission rates can range between 10-30%. For some products and services, you can even earn recurring commissions.
In the course of my affiliate marketing career, I’ve managed programs and networks in some of the most competitive niches. You’ll need a website, social media accounts, and some good products or services to recommend to get started. Here are some of the best affiliate marketing programs to find relevant offers. Making your first sale takes time and strategy. However, if you take the time to perfect your marketing and work at it consistently, your revenue will grow.
Dropshipping is a type of e-commerce wherein the retailer sells products online but does not handle the physical stock. You sell products to your customers, but a central supplier sends the products out. Click here to see how it works.
Dropshipping is used by a lot of e-commerce stores that do not want to shoulder the costs of purchasing inventory and warehousing. As with affiliate marketing, you need significant website traffic if you want to be successful. However, every successful website starts with an idea.
An alternative to selling physical products is selling digital products. Digital products require no storage space and can be delivered free of charge.
Here are some digital product options to consider:
- Stock photography.
- Online courses (a great option if you have a skill to share).
- Graphics, such as templates, logos, etc.
- Digital art.
You’ll need a website and a suitable platform to sell through. You may choose to use a traditional e-commerce platform like Shopify, or go through a platform specifically designed for digital sales such as Sellwire or Easy Digital Downloads.
There are few upfront costs associated with providing services as a freelancer. You’ll need a computer, a strong internet connection, and a website. While some freelancers do paid advertising to attract clients, many find all their work through organic channels, freelancer networks or job boards, and word-of-mouth. Networking on LinkedIn, attending physical or virtual networking groups, and sending cold pitches directly to relevant businesses are just some of the ways you can find freelance clients.
The beauty of many freelance jobs is that you can work for clients anywhere in the world. So don’t be limited by geography – cast your net wide!
A final note
Difficult times can present opportunities for entrepreneurs to shine. I hope this guide has shown you that it’s possible to start your business and thrive even in the middle of a large-scale financial crisis.
Whichever route you go down, remember that most businesses do not achieve overnight success. You’ll need to be patient, try things out, and be prepared to put a lot of work in if you want to see results.
Laurent Malka is the Co-Founder of Anytrack, a startup developing a conversion tracking software for affiliate marketers. He was born and raised in Switzerland, and now lives and works in Israel. He is a serial entrepreneur with over 15 years of experience in marketing and business development. Laurent has been a panelist and speaker at numerous digital marketing events including SEMrush and IG Affiliates. He prides himself on his ability to connect the dots across disciplines, industries, and technologies to solve unique challenges.