How Has the Covid-19 Pandemic Affected the Future of Start-Up Businesses
During this unprecedented time, we are hearing the stories of the economic impact of the virus as well as the huge number of losses that we have obtained when it comes to the impact on human life. All of which is a challenge that has to be dealt with accordingly. But with the economic impacts suspected to last for the next few decades, it could be the aftermath for small businesses that are the real issue. In this article, we will be looking into the future of start-up businesses as the covid-19 pandemic continues.
One of the biggest effects that Covid-19 has had on the future of start-ups is the limited budget. As many of the world’s population remain in some form of lockdown measure, no one is spending any money. This is because several businesses have had to close a store or limit the services that they are proving. This has, therefore, meant that revenue is significantly lower than before.
This has meant that budgets for start-up businesses are significantly lower than they would be in a thriving economy. This has, therefore, meant that the growth of smaller businesses has therefore suffered at a result. This uncertain time has meant that several smaller businesses have had to make cuts, this is evident in 43% of businesses completely stopping online advertising.
Forced Innovation in Order to Compete
In addition to the reduced budget, it is important to note that many start-ups are having to innovate and reach new heights with their products to stand out to the customer. Whether this is a new makeup range or brand-new technology and games, companies are having to do more in order to get the current customer base to part with their money. This is evident in start-up businesses such as Monzo and Espresso Games that have single handily led a gaming revolution with their innovative online games. It is these successful companies that are leading the charge with their innovation at this time. This is going to become the new norm for small businesses at this time as they will have to do more to stand out in a market where other companies are struggling to breakthrough.
A Huge Step Back for Recruitment
Not only will start-ups have to do more to replicate the success they would have achieved before the Covid-19 outbreak, but there is also the potential for growth and expansions of businesses to be affected. This is because budgets may not be able to permit the growth of the company at this time. This is a common issue that several companies are feeling at this time that has therefore led to the sharpest drop in recruitment since 2009.
However, this is slightly different from the last recession that we found ourselves in as companies are wishing to recruit new people, however, with the lockdown measures, these have had to be out on hold as people are unable to travel to interviews and begin the job as quickly as companies would like. This has, therefore, meant that a majority of companies have either paused or completely stopped during this unprecedented time.
The Effect on The Supply Chain
The supply chain is the last major issue for start-ups at this time as lockdown measures in multiple countries has meant that businesses are unable to produce products and have them shipped from abroad. This has, therefore, meant that production is significantly higher than in previous years and can have the potential to delay launches and have a knock-on effect on marketing. Though this is not a problem for every business it is important to note that it can still have an impact.
With this in mind, there are several businesses out there at this time that are set to struggle following the lifting of the restrictions across the globe. However, with careful planning and consideration at every step, a business can thrive at this time.