New Entrepreneurial Business in Unforeseen Situations

Introduction

The process of commencing a company requires a greater level of commitment, while most often entrepreneurs do not appreciate the substantial amount of resources, energy, and time necessary for growth. This process entails comprehending issues such as sales and marketing, financing, legal dynamics, and human resources. Notably, individuals start businesses for various reasons, such as financial independence and career growth journey, among others. However, not all startups succeed; research shows that only two-thirds of new firms survive in the first two years, and in five years, only half of them prevail (Gregory, 2019). Since being a business owner comes with several challenges, especially when the entrepreneur decides to leave his or her job, it requires major decisions such as formulating visions and plans, introducing unique products, the ability to raise enough capital and sustain cash flow, hiring and firing employees, and one’s capability to work more than predicted.

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Various issues can arise in entrepreneurship, which might be immense, such as when the best-performing employee quits, or the emergence of a new competitor in the same industry, or minor issues, including a failed deadline due to technical issues (Johansson, 2017). Nonetheless, focusing on overcoming these barriers is vital for a businessperson, and it is the most demanding stage. Unpredicted hurdles, including hurricanes and pandemics, although not regularly experienced, can adversely affect established companies, especially when they are not addressed strategically. Starting a firm in the course of either a pandemic or a hurricane is challenging but worthwhile due to the impending benefits. Despite the risks involved during crises, a strategic approach to address sustainability in terms of expenses and profitability ensures that business thrives.

Considerations for Starting a Business during Uncertainties

Uncertainty in business calls for critical analysis of the industry’s future in which entrepreneurs have little or no probability at all. Establishing a startup is a complicated step in the presence of a pandemic and a multifaceted process (Kuckertz et al., 2020). Scholars argue that even though people might reason that it is not promising to chase entrepreneurship in such compromising situations, a business could thrive with different issues, as well as environmental factors being addressed.

Current Customers’ Needs

Consumer habits tend to shift significantly amid pandemics, hurricanes, or when family emergencies arise. Hence, it is essential to consider how the products and services are offered fit into a customer’s lifestyle. Time plays a significant role while launching a firm, and the external business world becomes a disturbance (Kuckertz et al., 2020). A major setback during a pandemic is how to bridge the gap between responding empathetically to the happenings and avoiding making fewer efforts. Getting closer to clients also helps build confidence since in the long term they require a brand they can trust and easily access.

Marketing Strategy

A solid marketing strategy helps a new business in times of uncertainty. Physical movement is not allowed during some pandemics as many avenues used to market brands may become unfeasible, and as a result, marketing might be challenging. Such cases require a digital approach that allows the firm to reach a larger population. As a principle, it builds consumer loyalty by communicating transparently and enabling a firm to stay true to its trademark.

Consumer Connection on Social Media

An entrepreneur should understand that besides making sales, the promotion of the business is essential. The institution should use social accounts to engage customers and inform them about the new brand since social media assists in gaining the trust of new clients, mainly through referrals from satisfied consumers. Besides, the physical appearance, location, and layout of the place can be posted on websites or social platforms with information such as operating hours, restrictions, available services, and operation modes attached to inform potential clients.

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Financial Planning

The business landscape changes seasonally, but a long-term plan that involves efficient financial planning ensures that a company remains through a crisis (Kuckertz et al., 2020). Monitoring expenses and cash inflow assists in planning a firm’s financial future and eliminates overspending. Additionally, to preserve financial stability and reduce spending, ways to increase sales should be identified while seeking alternative revenue-generating streams that expand clients’ base despite low sales.

Steps of Starting a Business during Uncertainties

During unpredicted scenarios, normal routines change significantly, for example, customers’ preferences shift since people prioritize health over convenience and cost, and thus the impact on retailers becomes tremendous. Ironically, investing in startups rises uncertainty for other businesses; however, it also stimulates them to adjust to keep pace. Conversely, some startups flourish after considerations of several factors discussed above. The following are steps for starting a business amidst the contravening circumstances affecting the business environment under varied circumstances.

Identification of a business idea

Initially, the goal is to find an exciting opportunity that is viable, fits the current situation, and strikes a balance with reality. A validation process will be required to prove if the suggested proposal can fulfill a market’s need, which is identified through research or questionnaires to a niche (Gregory, 2019). A valid corporate idea should create a current need for the company’s projected product, recognize who needs it, no other businesses that offer similar products, what they are like, and lastly, how the business will be suitable to the market. This step is essential as it helps avoid time and cost wastage on a plan that would fail.

Make a Business Plan

A business plan is mandatory for a firm from its establishment through its growth since this document outlines the fundamentals of the company, its products, target market, goals set, and the mechanism to achieve them. A traditional business plan is a long formal document with vast information divided into sections, including executive summary, products or services, market analysis, marketing strategy, management summary, and financial analysis. Alternatively, a one-page business plan is brief, and it highlights the vision, mission, objectives, strategies, starting capital, expected expenses, and the action plan.

Financial Plan

At this stage, the entrepreneur estimates the total costs of starting the company, given the pandemic constraints, for instance, licenses and permits, legal compliance, legal fees, insurance, market research expense equipment, and leases, among others. Running costs as well should be included, including rent, supplies, advertising cost, production, and employee’s salary (Gregory, 2019). Startups can acquire loans, ensure minimum expenses, and consider a partnership, crowdfunding, or business grants mainly from private groups.

Selection of a Business Structure

During a crisis, it is vital to choose carefully the type of business that one wants to set up since it has an impact on the name, the business liability, and the method of file taxation. At first, a firm owner may select a preliminary structure, then reevaluate it over time, but they can decide to alter it based on changes in needs and the company’s growth. It could be designed as either a sole proprietorship, which is controlled by one individual, or a partnership owned and managed by two or more people. It could also be a limited liability company or a corporation that has a list of shareholders who can appoint directors to run it.

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Registration and Licensing

A sole proprietorship must register the business with their county clerk or state, while partnerships, corporations, or limited liability companies should register on completion of formation files. Attention is required while selecting a name to determine if it is in use or trademarked. According to Johansson (2017), it is also important to register a domain name for website creation. Once a firm is confirmed to be compliant with safety procedures after inspection, it is approved and granted a license to show that it has the permission to begin operating.

Conclusion

Unforeseen situations shift consumer behavior and affect business models, impacting economic changes. Amidst the emerging pandemics and uncertainties, startups realize that the crisis response of a company is related to its resilience and depends on its flexibility to handle and endure improvisation. For entrepreneurs, failure and uncertainty are common in business, suggesting that new companies are better equipped in prevailing through the crisis since they exhibit flexibility in adapting business models.

Nonetheless, business continuity is essential for all economies, and the already established and existing companies in the market could help the new entrepreneurial firms and managers, especially in the presence of unpredicted uncertainties, such as pandemics, family emergencies, or hurricanes. Besides, financial support and technical guidance would assist the startups in restructuring their ways of operating. Even as the upcoming organizations are reinforced, they should be aware of the new vendors and clients amidst the changes and simplify their workflows to accommodate necessary measures.

References

Gregory, A. (2019). 10 steps to start a small business. Web.

Johansson, A. (2017). 5 steps to handle any unforeseen challenges. Web.

Kuckertz, A., Brändle, L., Gaudig, A., Hinderer, S., Reyes, C. A. M., Prochotta, A.,… Berger, E. S. (2020). Startups in times of crisis–A rapid response to the COVID-19 pandemic. Journal of Business Venturing Insights, e00169.

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NerdyRoo. (2022, February 23). New Entrepreneurial Business in Unforeseen Situations. Retrieved from https://nerdyroo.com/new-entrepreneurial-business-in-unforeseen-situations/

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"New Entrepreneurial Business in Unforeseen Situations." NerdyRoo, 23 Feb. 2022, nerdyroo.com/new-entrepreneurial-business-in-unforeseen-situations/.

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NerdyRoo. 2022. "New Entrepreneurial Business in Unforeseen Situations." February 23, 2022. https://nerdyroo.com/new-entrepreneurial-business-in-unforeseen-situations/.

References

NerdyRoo. (2022) 'New Entrepreneurial Business in Unforeseen Situations'. 23 February.

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