Business in 2021 makes sense

12 Jan 2021

Why Starting a Business in 2021 Makes Sense

“Why starting a business in 2021 makes sense,” he says. How could this possibly be true? I was inspired to write this after a piece in Forbes from BC-born success story, Brian Scudamore, of 1-800-GOT-JUNK fame.

The purpose of this blog is to show you the potential and possibility of right now and invite you to explore that potential with me.

As a working professional, this pandemic is my third crushing economic event. When I entered the workforce in 2003, I wasn’t that tuned into how the burst of the .com bubble was affecting our local economy. I quickly became attuned to how different organizations were responding. Some were reeling and some were investing heavily. It was again true during the Global Financial Crisis where some organizations stumbled and some found ways to thrive. I’ve no reason to believe that the current climate in Canada will be any different as the new year gets rolling.

General Notes on Recessions

I am not an economist, but these are some well known occurrences during a recession:

  • People are laid off, which then means more people are willing to work for less money. Labour gets cheaper.
  • Borrowing becomes cheaper as interest rates come down to encourage spending.
  • Companies shut down so lenders may become more careful about who they lend to even if money did get cheaper.

On personal levels, and Brian Scudamore wrote about this in Forbes, people are reflecting and re-evaluating about what’s important.

Regardless of the reason, all of a sudden the “now or never” mentality has become a reality.

– Brian Scudamore, Forbes

Here is how I saw these playing out in my career.

.com Bubble Burst

I entered the workforce towards the end of the .com recession in early 2003 and worked with an IT contracting agency. We would find specialized contractors and professionals to support organizations’ projects, which is pretty straight forward. This industry is something of a bellwether because résumés flock in during rounds of layoffs. Conversely, it’s difficult to find talent or budgets for them when everyone is hiring.

Think Outside the Box in 2021

In speaking with some of my team, we would often be discussing how specific organizations were laying people off or terminating projects to say money, but some organizations were ramping up spending. Some companies would take serious advantage of cheap lending and then invest in big projects. The nice thing about investing in big projects when interest rates are low, they’re less costly for years to come.

In speaking with some of my team, we would often be discussing how specific organizations were laying people off or terminating projects to say money, but some organizations were ramping up spending. Some companies would take serious advantage of cheap lending and then invest in big projects. The nice thing about investing in big projects when interest rates are low, they’re less costly for years to come.

Many companies that experienced layoffs shut down or were acquired for cheap, but the ones that invested solidified their presence. To Mr. Scudamore’s point, they were rewarded for saying “now or never.”

Global Financial Crisis

The Global Financial Crisis hit everyone. During the .com era, I had the sense that the bomb went off in .coms and others were impacts, but during this crisis, the epicentre was housing with other bombs going off in other industries.

While there were grander negative effects, many talented people were relieved of their jobs to explore new things – and they did! A documentary film called Lemonade explored this phenomenon in the middle of the crisis and new companies were born. Examples include:

  • Groupon; Airbnb; Smashburger (2008)
  • WhatsApp; Venmo; Uber; Slack; Square; (2009)
  • Instagram; Pinterest; Warby Parker (2010)

Starting *A* Business in 2021 Makes Sense

The title of this blog is “Why Starting a Business in 2021 Makes Sense” and not “Go start any business because that makes sense.”

If you are starting a business and investing your money in the middle-end of a pandemic, you must be thoughtful and aware of how you will earn returns. As Mr. Scudamore says in Forbes, he didn’t expect that home services would see a boom during the pandemic, but in hindsight it makes sense: people are working from home and want their homes to be comfortable.

Do Something Great in 2021
Do Something Great in 2021

In working with me as a coach, and as a small business advisor, we will see you get ahead of the curve so that your business doesn’t live in hindsight and that it lives in possibility. Contact me today.

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