Starting a company in times of COVID-19: What to know

If opening any type of business is never an easy task and failure in many cases is considered common, starting a business in times of a pandemic carries added risks.

Experts believe that at a juncture in which part of the business fabric is destroyed as a result of the economic ravages derived from the health emergency caused by COVID-19, whoever really sets out to start a company in these times should exercise extreme caution. And they offer some advice.

starting a company COVID-19

They know that the temptation of many people to become their own bosses and start their own company will not disappear suddenly, despite the progression of the COVID-19 and the social and economic crisis. It would be unlikely, in a country in which, this year, six out of 10 startup owners had been it before, and 44% of them had launched more than two projects before their current signing.

In parallel, the chances of these serial entrepreneurs crashing diminish as they start businesses. To minimize risk during COVID-19, or in any context, it is necessary that all the elements that make up the analysis prior to starting a company – expenses, income, marketing, and financing, among others. Although we must always carefully study all aspects of the company, the problem boils down to seeing the return on investment and profitability in the generation of profits.

Business planning has to be realistic, especially in the financial and cash flow aspects, knowing that in the first stages of the opening there will be more costs than income and that the lack of liquidity and indebtedness generates interest and surcharges in the tax obligations that are not usually contemplated in the forecasts. These can all lead to failure even when a company is started. This is an interesting examples of a launch in 2020.

Sometimes it is taken for granted that someone needs a product or a service provided in a certain way and it is not like that. Not incurring high structural costs at the beginning of the activity is also essential, as well as being correctly advised in the administrative process of registering as an entrepreneur.

Look for help

It’s recommended to highlight some more emotional aspects of entrepreneurship in its initial phase. The important thing is to have the will, a good idea, and not stop working to achieve your goals. One of the hopes of this as many other entrepreneurs is to access some type of help specially planned to face the crisis.

In fact, one of the greatest demands of “amateur” entrepreneurs is to have greater access to finance and fewer tax obstacles. Even so, at a time as difficult as the current one, there have been important rounds of financing raised by new startups.

Be flexible

The most important thing in the face of the difficulties posed by the pandemic is to adapt, and that is done thanks to innovation. If it is true that in these months some startups have disappeared and the forecasts of many SME owners for the coming months are dark, others have not only managed to modify their business model, but also achieve greater success.

This is due to one of the main characteristics of startups, that is, their flexibility and their rapid ability to adapt to changes at an almost unthinkable pace. Furthermore, the teleworking modality imposed on forced marches has not been a big problem for them due to its own structure and methodology, and because digitization is inscribed in their DNA.