The COVID-19 pandemic has created an uproar among entrepreneurs around the world. How will startup entrepreneurship change when this pandemic is over?
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4 min read
This story originally appeared on ValueWalk
The COVID-19 pandemic has created an uproar among entrepreneurs around the world. Companies that operated in a traditional office environment needed to develop a strategy for working from home. In fact, 42 percent of the US workforce now works full-time from home. Those who were personally dependent on service customers in some ways had to find a way to deliver or serve digitally. And of course, many entrepreneurs have had to completely rethink their budgets in response to the economic impact of the pandemic.
But how will startup entrepreneurship change when this pandemic is over? What does the world of entrepreneurship look like after COVID-19 and how will the pandemic have a lasting impact?
One of the most obvious transitions forced by the COVID-19 pandemic has been the transition from home to work. Companies that were considering the idea of working completely remotely have made the full transition to stop the spread of the coronavirus, and even companies that were strongly against the idea of working remotely have adopted a new model.
After this transition, millions of business owners and employees have discovered the benefits of remote working firsthand whether they like it or not. Employees benefit from the lack of commuting, more flexibility and free time, and more control over their work environment. They are more productive and have higher morale. Entrepreneurs save money on office bills and see their businesses thrive in these new conditions, even as they strive to take them over.
If you plan a startup to operate remotely from the beginning, you will see even more benefits as you have the benefit of planning things in advance. Accordingly, more startup entrepreneurs will create a completely removed model by default, hoping to see the benefits from day one.
Another lasting effect of the pandemic will be trust in digital marketing – both for new startups and for existing companies. The pandemic has shown that the best way to reach customers isn't through traditional marketing like print or direct mail, but rather email, retargeting ads, PPC ads, SEO, and dozens of other digital marketing strategies.
The digital marketing industry has grown significantly over the past 20 years, but the pandemic is set to spur further growth. This will spur further spending on developing online presence and ad placement, and inspire new MarTech startups to develop new marketing technologies to meet demand. This could create a feedback loop that encourages new marketing tactics to emerge and evolve.
The COVID-19 pandemic has shown us how fragile most companies that operate with low margins and capital are. If an emergency strikes and a company can't make money like it used to, it may not survive long. For example, it is estimated that 60 percent of “temporary” store closures due to the pandemic are permanent.
Granted, much of this data comes from restaurants and other local businesses rather than startups, but start-up entrepreneurs can still learn from these lessons. It will be more important to have adequate funding, cash, positive cash flow, and a strict budget in order to remain financially stable.
Fail safes and backup plans
Similarly, start-up entrepreneurs will be more interested in implementing fail-safes and backup plans. When one mode of operation or one element of the business fails, other elements should be used to replace it.
This could manifest itself in having multiple revenue lines for the company operating at the same time. If your business has four different ways to make money, it doesn't matter if one (or even two) are suddenly no longer available. You can temporarily redirect resources from these eliminated paths to more reliable paths.
In fact, entire business plans may be moved to accommodate more backup plans. Is there a convenient way to pan business if the main idea behind the business fails or suddenly becomes less feasible? Business owners are thinking more than ever about these emergency protocols.
The lasting effect
Regardless of how you look at it, there is a practical certainty that the COVID-19 pandemic will have a lasting impact on entrepreneurship and corporate governance for years if not decades. Entrepreneurs have been forced to make many unexpected and transformative changes in order to survive these emergencies, and the lessons learned have not been ignored. Expect a fundamental change in the types of entrepreneurs and startups in the years to come.