The pandemic and resulting economic shutdown to contain it over the last two years have affected businesses worldwide. At the height of the pandemic there were an estimated 11,000 people working in downtown Vancouver compared to an average 119,000 with office occupancy hovering around 10-30%.
Now, with the provincial government in Step 3 of the four-step reopening plan, businesses have been moving to a more normalized position, albeit with certain restrictions still in place.
University Canada West’s campus in downtown Vancouver, where I work as Department Chair, just reopened this term to a record incoming class of 2,700 extremely entrepreneurial students. Enrolment is up to 6,000 students, many of whom will be hoping to start their own businesses once they graduate.
What does this mean for an entrepreneur? Would it even make sense to try to start a business under the current conditions?
As a Mentor for Futurpreneur, I have an entrepreneurial couple with an adventure travel business based on Vancouver Island. They started up their business just as the lockdowns started; all of their bookings were cancelled or postponed.
In reality, the principles of entrepreneurship do not change with shifting economic conditions. You have a product that prospective customers want to buy at a price that makes a profit. More than that, marketing is necessary so prospective customers know it is available. And the product needs to get to the customer once they buy it.
The pandemic brought a change in how customers buy products. Many people have turned to online ordering and direct delivery to their door. This can provide a boon to the entrepreneur as they can use modern online marketing techniques to reach out to the specific demographic rather than the scattergun approach of traditional marketing. In-depth, focused marketing can be less expensive and provide a much higher closing rate. Of course, now that we can get out of our homes again, old-fashioned face-to-face (or mask-to-mask) marketing is still the best method to create the sense of trust necessary to get customers to start opening their wallets.
With interest rates staying low for the time being, this is also a good time to obtain financing. My mentees with the adventure travel business worked hard at pivoting their marketing to a new customer base. However, without much revenue they had to modify their expansion plans and look at obtaining additional financing, taking advantage of the ability to defer some payments and being as creative as possible to keep afloat while just hanging on for the last two years.
Being able to pivot is crucial right now. With the loss of customers, some businesses simply could not cope and have had to shut their doors forever. Some have found ways to keep enough revenue coming in to keep going. Restaurants had to move to takeout only models until recently. My mentees found that with no international travel at all and no tourists, their original business model would not work. They started marketing to domestic prospects and found success there – they had not considered this a viable customer base before.
The pent-up demand by people who have been stuck at home for months anticipates that businesses in the travel and recreation industries will be benefitting. Peloton just announced their first quarter earnings shortfall and as a result their share price dropped 25% shedding $8 billion in value. The reason is that since people can now return to gyms, do outdoor activities and recreation they no longer need home-based equipment.
While successful entrepreneurship has never been easy, there is no reason to put off starting a business – especially one that responds to a pressing consumer need – even in such extreme times as we have been experiencing over the last two years.