By Lim Kee Yeong
Countless news reports have been highlighting the plight of SMEs, with stories of businesses closing down, people losing jobs, companies cutting pay and the economy shrinking drastically. All these unfortunate happenings have many running for shelter and picking up every penny on the floor, figuratively speaking. This is reflective of the uneasy sentiments we have currently.
Despite the ongoing economic storm, there remains a group of people looking at entrepreneurial opportunities or starting a business. Among them are a diverse lot – they may include those who are still gainfully employed, those affected due to pay cuts or retrenchments, those looking for a reason to venture out, those retired from employment, and also not forgetting those feeling really charged-up to go due to prior planning. They are a positive spirit to be applauded, notwithstanding prevailing general pessimism.
The latest Google Trends statistics indicate a clear surge in interests on the topic of “start a business”, per Google search intensity data globally. In fact, it is at its highest level since data was first collected in 2004. Surprised? Don’t be. Reasons can be many-fold, including the existence of a “push” factor, the need to do so for survival, having a good plan already in place and also for alternative income purposes. Chances are, the world may see a wave of start-ups appearing over the coming short to medium term.
Timing is Relevant (But Not Everything)
Business owners will always be very passionate about the history of their beloved companies. Among the colourful stories they narrate will always be the core topics of why, what, how and when they started or took helm of the business. These entrepreneurial personalities likely share the mutual traits of starting with very little (monetarily or knowledge-wise), growing over the years and learning aplenty during times of trouble.
Speaking from conversations with numerous business owners, it is noteworthy to highlight that one common element of these risk-taking journeys is the fact that “timing” is pertinent – but not the determinant for a decision to start a business. In other words, timing is not everything; a motivating message to all aspiring entrepreneurs-to-be amidst the COVID-19 situation.
Under the current challenging environment, if the idea of becoming an entrepreneur is burning hotly, a natural “NOT NOW” will likely be your first thought. Effectively, your decision may lie solely with the “when” part of the entrepreneurship equation. But not considering the elements of “why”, “what” and “how” (among others) before deciding can potentially be regrettable down the line.
Of course, the timing or the “when” part remains relevant. But business owners will also passionately put the “why” part as central to any decision to begin the voyage. In other words, having a compelling reason for the business to be started is equally vital, if not more so than “when” to start your business. Putting it in another context, aspiring entrepreneurs should not be overly “disturbed” by the economic crisis. Essentially, for any new ventures to work, ensure there is a solid “why”, an innovative “how”, an acceptable “when” and a realistic “what”. In simple terms, be clear of the following:
- Why – Purpose and motivation to start my business
- What – Business I am going into
- How – Means and avenues to get my business started
- When – Timing to start my business
Negatives Can be Read Positively
The famous saying of “in every crisis, there is an opportunity” has never been disputed. A large majority will be discouraged because the world (literally the whole world, for once) is in or going into a recession; and we may not know how long or how bad it may become. A recession also comes with its own attributes, both positive and negative. The negatives are apparent, including the fact that most of us will not want to be in one. However, as a starting point to any entrepreneurial journey, let’s realise also that some of negatives can be alternatively read in a positive manner. Chief among them will include:
- favourable regulatory policies for economic recovery purposes not seen during good times
- additional public and private funding for start-ups to support the employment market
- ample statutory grants, tax rebates and investment incentives to encourage business sustainability
- availability of more talent arising from layoffs
- generally lower set-up costs when sourcing for materials and premises to kickstart due to competition for business
- more options to takeover or buy-out existing businesses when others intend to exit
- leaner operations typical of start-ups and SMEs as an advantage in manoeuvring
- ready resources meant for start-ups generally under-utilised during better economic times
In short, it is certainly a difficult time during a crisis, but it may not be entirely doom and gloom. Economically, the COVID-19 situation has also created some initial unique winners who have successfully pivoted their businesses. Subject to a proper plan and committed execution, the “positives” above can be the supporting pillars for entrepreneurs-to-be to take a leap of faith, and may also play a part in the overall economic recovery efforts.
Don’t Start With a “Stop”
Entrepreneurship is about taking risks. Weighing the pros and cons before starting a business will definitely be a part of the process before arriving at a decision. Some entrepreneurs mitigate these concerns by starting the voyage on a modest scale or part-time basis, while some do it with the support of their current employers as seed investors, suppliers and customers.
There have been many stories about successful businesses in existence today which started during past recessions. Unfortunately, many companies do go under as well during crisis times. Equally extensively published are writeups on starting a business during crisis as well as articles on “timing is not everything” when it comes to entrepreneurship. The likelihood of a start-up starting (even during crisis time) and making it through, developing into a unicorn, or growing into a sought-after brand really depends on the entrepreneur-to-be’s understanding, appreciation and execution of the why, what, how and when, resolutely.
Crises per se should not be the sole determinant of any entrepreneurship opportunity – it is among the many factors to be considered collectively. The sweet taste of success never comes easy, and understandably entrepreneurs-to-be often struggle to decide.
Despite an economic crisis, if the thought of becoming an entrepreneur is brewing, perhaps do not start the process with a “STOP” in mind. Instead, begin with researching and seeking advice on the why, what, how as well as when. Then, put all these considerations and logics into a business plan for a deeper assessment. Evaluate relevant factors objectively, and if positively affirmed, a commitment to its execution will be the heartbeat of it all.
Some food for thought for would-be business owners before embarking on the journey into the world of entrepreneurship, despite the ongoing COVID-19 challenges.
Lim Kee Yeong is Director of SME Banking at Affin Bank Berhad.