When life throws lemons, make lemonade.
They say every crisis offers an opportunity. What opportunity does this Covid-19 pandemic offer to people with ambition?
The Current Market
The rapid spread of Covid-19 has wiped out millions of dollars from markets around the globe. While the full economic consequences of this black swan event are still unclear, we know that the effects that the virus—and the drastic measures being taken to contain it—are already precipitating change across industries.
The Opportunity
The COVID-19 pandemic is spreading rapidly, with new updates flying in every minute. As the situation evolves, many entrepreneurs are unsure of what steps to take to mitigate the damage caused by COVID-19. While most cities of the world are under lockdown, it is perhaps the best time to work on startup ideas which many of us couldn’t pursue because of busy schedules. Having a clear thought process is important in order to plan for startups. Below are the few important points to consider while planning out your startup:
- Product/ Service: The first decision that entrepreneurs have to make is to decide on what kind of product or service they are going to sell. It should start with a simple question; is there a need for a particular product in the market? Or Does a particular service solve any problem? If the answer to these questions is yes, only then the subsequent steps should be followed.
- Target Market: After deciding on product/service, the next step is to figure out whether the market size is big enough. While thinking about your business concept/idea it is very important to identify the industry one will be operating in. It may appear pretty simple but many entrepreneurs fail to identify the industry they are operating in. Once the industry is identified, the next step is to identify the niche market. Identifying a niche market is important as it makes it easier to understand who your customers are and what their preferences are.
- Competitors: You should always know what you are getting yourself into. That is only possible if current market players are closely observed. Knowing current sellers is important as you will be competing against them. The only way you can outperform them is by first determining what they are doing. If you want to be successful, you have to offer something better and different. You could offer the same product as innovation is not always possible but you can introduce a unique user experience. A unique user experience could be as simple as packaging or the way service/product is delivered. You just have to think out of the box!
- Strategies – Strategy is a broad term. Effort should be very focused. Therefore, it is important that you breakdown strategies into short term, medium-term and long term. Initially, the focus should be on short term strategies with medium-term and long term strategies taken into consideration. All strategies should be coherent. That is why it is important to lay down all strategies with a major focus on short term strategies.
- Set Milestones – Working on a startup sometimes gets really chaotic. With so much going on and so much to do, occasionally it feels things are getting out of hand. To avoid such situations, all the tasks should be listed down in order of their priorities. For instance, competitors analysis should be done before finalizing packaging of the product (You have to be different and better)
- Know your numbers – All businesses have one goal in common; maximize profit. Many entrepreneurs get distracted by other aspects of their startups that they fail to focus on finances which is the backbone of any business. The business idea should only be pursued if it is backed by numbers. Following should be considered to determine financial feasibility:
- How much investment do you need to be fully operational?
- What is your cost? What should be your price (keep competitors in consideration)
- What should be your sales volume? (How much do you have to sell at a certain price point to be profitable)
- What other overheads would your business have?
- Funding: All businesses require capital. While it is ideal to invest your own money but in most cases, it is not possible for entrepreneurs to have the required money. Funding can be secured from different avenues. Major sources of funding include Bank loans, Angel investors, VC firms, incubators and government programs (Such as SBA loans). To secure funding, in most cases, you would require a business plan coupled with a financial model to be submitted to investors and banks.
You may need a finance expert to find answers to these questions for you.
To learn the difference between Angel Investor and VC firms read our detailed article here.
Sentient Solution is a firm that specializes in preparing investor business plans. You can reach out to us by booking a free consultation or through email.
