Starting a new business during the pandemic: crisis or opportunity?

Cicely Fraser making homemade earrings. Photo: Cicely’s Instagram (Cic3lys-drip)

Covid-19 has had a profound impact on businesses around the world, from forcing some to shut down to boosting others. Nonetheless, new businesses still found a way to put themselves on the market and attempt to rise to the challenge.

From selling handmade products on social media to working online to provide assistance, new businesses come in all shapes and forms. All that is needed is hard work, a laptop and a decent Wi-Fi connection. “Obviously it is not quick money, but it is therapeutic and a nice way to pass the time” says Cicely Fraser, a British resident who during the pandemic started selling earrings on Instagram.

“In a way, the pandemic gave the opportunity and idea for my business,” says Noah Dettmann, a German business student in Amsterdam who recently started his own company with a few classmates. “With the big shift to online learning for all types of education, it made sense to create a platform that makes the online education experience more engaging and fun.”

Dettman also speaks about the negative side of it. “Although it does keep me busy, starting a business now comes with quite a few downsides” says Dettmann. He found communication between team members to be quite difficult, especially when ideas were not aligned.

Chart 2 shows that in 2019 and the first three months of 2020, application growth was essentially flat for general businesses, businesses with planned wages, and corporations. In late March 2020, application growth declined sharply for all three business types. Since late spring, growth for all three business types has exceeded both their initial drop in March as well as their levels one year ago, with the strongest growth in general businesses.
U.S. Business Application Growth Surges in Second Half of 2020. Source: U.S. Census Bureau and NBER (Haver Analytics)

The sedentary lifestyle of this past year has pushed people to get creative and be productive with their time.  Research has shown that in the US, the general business applications has increased throughout 2020. Jason P. Brown, Research and Policy Officer says: “People who lost employment due to the pandemic and associated shutdowns may have tried to create their own opportunities by starting a business, although it is not the first cause of such economic trend”.

After he was fired from his job at an advertising agency at the beginning of 2020, Wesley Altuna started selling Filipino food over Instagram .“After being laid off, I started cooking and re-discovered my passion” says Filipino-Canadian Wesley Altuna . Gaining popularity with around 13k followers on Instagram and over 2 million views on YouTube, Altuna says “I don’t know what the world or restaurant scene will look like after Covid-19, or if I’ll be able to open my own brick-and-mortar business, but for now I am able to support myself.”

Wesley Altuna’s delivery restaurant

Starting a business during the pandemic can be a dangerous game, but it can also provide an activity and inspiration to keep oneself busy and to be able to bounce back.

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