I started a business during my senior year of college. I was on the verge of graduation, beginning a full-time job, and sensing the reality of adulthood looming right around the corner.
Looking back, that was a wildly uncertain time. Still, I pushed through, scaled it over a couple of years, and sold it before I moved to Chicago.
I recently posted the question of “Should you start a business in uncertain times?” on my Twitter and received a myriad of responses and real experiences, many of which I’ll share below. But one response stuck out to me: “There is no such thing as a certain time to start a business.”
It’s true. Starting a new business is one of the most unpredictable, tumultuous adventures on which we could embark.
We can all agree that 2020 was a particularly uncertain and uncomfortable year. Yet more products were launched in 2020 than the two years prior: 7% more than in 2019 and 18% more than in 2018.
The COVID-19 pandemic hardly touched VC funding either. Between April 2019 and April 2020, angel and seed funding went up 27%, Series A funding went up 15%, and Series B funding went up 8%.
Looks like those “uncertain times” may not hold business owners back after all. Let’s look at what some real business owners have to say.
So, should you start a business in uncertain economic times?
I spoke with a handful of entrepreneurs about their personal experiences with launching businesses in 2020. Their feedback is detailed below.
Brendan Hufford, founder of SEO for the Rest of Us
Hufford founded SEO for the Rest of Us as a community dedicated to helping people stop learning (and start doing) SEO.
“If these times have taught us anything, it’s that our world is farther out of our hands than we may have ever imagined. Multiple income streams can provide security and a level of freedom that, in a way, make things more certain,” shared Hufford.
Hufford learned that, while starting a new business is stressful, he was also able to bring a bit of certainty and peace to people looking to learn SEO. “It’s been a privilege to help others grow their business during the pandemic,” he shared.
Should everyone start a business during uncertain times? Hufford says no. “You shouldn’t start a business if you’re gambling on more than yourself,” he said. “Adding that level of stress to your relationship with your significant other or children isn’t something I’d ever advise doing.”
Melissa Pedigo, CPA, founder of A CPA Writes
Pedigo is a CPA who writes tax, accounting, and finance content exclusively for CPAs, tax accountants, and financial advisors. (She’s also dubbed herself Chief Nerd Officer and tax writing wizard.)
“if you already know what you want to do and are sure there’s a market for your product or service, then starting a business in uncertain times is no different than starting one in certain times,” said Pedigo.
However, she warns that if you’re not certain of the demand for your idea, you should wait until a more stable time when consequences may be less impactful.
On the other hand, having a certain idea can negate the uncertainty of the market, economy, and world.
Moreover, with a solid support system (like a spouse, friends, or business partners), you’re better suited to start a business during uncertain times. “Having a supportive spouse, both financially and emotionally, is underappreciated and under-recognized in providing the security to make big decisions like starting a business,” Pedigo shared.
Doug Davidoff, founder and CEO of Imagine Business Development
Davidoff and his team enable companies to orchestrate all elements of their sales, marketing, and customer success efforts to generate more impact.
“Asking if one should start a business in uncertain times infers that there’s an option to start them at certain times,” Davidoff countered. “In my experience, there is no such thing as certainty, especially when it comes to starting and running a business.”
In fact, Davidoff believes that uncertain or difficult times are, in fact, the best times to start a business—for three reasons:
- Tough times (like recessions) have a greater impact on larger companies. If you’re a new company, there is still plenty of opportunity available for you.
- Companies and people alike are more likely to be actively considering change in turbulent times than they are in smooth times.
- Good decision-making pays off far more in difficult, uncertain markets than in good, solid ones. Companies don’t become great when times are good; they become great when times are difficult.
“Businesses should be started in uncertain times, because if they weren’t, they would never be started,” Davidoff stated. “I do believe there are exceptions for who should start a business in uncertain times, but it would be the same answer if times weren’t uncertain — starting a business is not right for everyone.”
Dr. D’vorah Graeser, CEO and Founder of KISSPlatform
Graeser founded KISSPlatform as an agile competitive intelligence toolkit to help you innovate and validate your ideas to bring them to market faster.
When asked about starting a business during uncertain times, Graeser said, “times of crisis offer unique opportunities to take control of your future. [During crisis], only the companies that ventured to do something new were available when things ‘calmed down’.”
According to Graeser, crisis provides a novel scenario in which we can succeed while other companies fail. To reach that success, she encourages new entrepreneurs to make decisions quickly and take chances. “Limitations and constraints make us think better and faster,” she shared.
She agrees that while starting a business in uncertain times isn’t for everyone, it can be a smart move. “[Starting a business] will test you…but I’ve worked with many companies that look back to uncertain moments and are thankful for taking bold actions, making plans for the future, and investing in their businesses.”
Tips for Starting a Business in an Uncertain Economy
Starting a business—whether during certain times or not—is easier said than done. Here’s some actionable advice about starting a business during uncertain times from entrepreneurs who’ve actually done it.
1. Be real with people.
“Far too many people attempted to gloss over the realities that so many were facing [in 2020]. More than ever, people need to feel seen,” Hufford encouraged.
“When times are uncertain, being a rock for others and supporting them outside of your core business is crucial.”
2. Prepare to adapt.
“Prepare for business to be slow, and be open and willing to adapt [in response,” shared Emerson Lee, founder of personal gaming brand, Raggammufyn.
He started 2020 as a freelance writer but added a few additional services throughout the year as needed. “Now, I’m working on designing a new roleplay therapy service with a local niche therapy clinic, and I couldn’t be happier,” said Lee.
3. Track your expenses and have a plan.
“Keep track of your finances, and I’m not saying that because I’m a CPA,” said Pedigo. “In uncertain times, you need to know where every dollar goes and make sure you’re invoicing for all your work in a timely manner. Cash flow becomes more important in times of uncertainty.”
Additionally, create a thorough business plan for starting and growing your company. This will help you stay focused on your goal when things inevitably get tough. It’ll also help you attract investors and financial support when the time comes.
4. Get clear on your audience and their problems.
“Be clear on who your target audience is — and equally clear on the problem you’re going to solve better than anyone,” explained Davidoff.
He encourages new business owners to know the answer to these three questions on behalf of their audiences:
- Why should I change?
- Why should I change now?
- What should I change with you?
Tamara Sykes, SEO Strategist at Next Level Presence agrees. “You need to ask yourself if there’s a need you can provide a solution for,” she stated. “If the need is apparent, go ahead and start the business, because you know the market exists. But if it isn’t, starting your business during an uncertain time is unwise — particularly since it will take more time to get traction.”
5. Build an audience first.
“Network and build an audience before launching,” shared Jack Kitterhing, founder of EatsWP, a company that allows restaurant owners to build mobile-friendly digital menus accessible by a QR code.
One way to build an audience is by sharing knowledge for free through a blog and on Twitter. “People will follow you, become invested in your story, and could end up as customers,” said Kitterhing.
Podcast producer Eva Sheie agrees: “Everything you read about starting a business advises that you get customers before you do anything else, and that’s what I’ve done. I’m currently working from a waitlist of clients — so I don’t have a logo or a website. I’ll get to scaling and hiring later this year…for now I’m happy to just be happy and do good work.”
6. Get moving.
“Get moving now,” Graeser urged. “Especially during these times when you feel like everything is standing still — it’s your turn to start moving. Crises inevitably end and, if you start moving now, you’ll be the one standing while others take time to get back to business again.”
7. Be brave.
Tom Rankin, a freelance writer for WordPress businesses, deals with various health issues. To start his business during uncertain times, he had to make a brave decision to put aside some of his plans, double-down on others, and pivot anyway. “Big, bold decisions are tough to make, whether it’s business or life,” he shared. “[But now], I have work, personal time, and life balance — the things I originally set out to achieve.”
Megan Sayers, founder of Make Good Design, has also relied on bravery during these times. “We’re not out of the woods yet, but there’s something comforting about knowing that so many are in the same boat — it’s almost given us permission to fail, which has in turn made us feel braver.”
The Truth About Uncertainty
While uncertain times surely make it harder to build a business, the truth is that there truly is no certain or perfect time to do so. If you’re considering starting a new venture, evaluate your life, relationships, and bank account and decide if they’re sturdy enough to ride the waves of entrepreneurship.
If they are, and you’re prepared for the ups and downs of business-building, then there’s likely no better time to get started.
I’ll leave you with a final note from Joe Clarke, a freelance writer who launched his business in 2020: “Should people start businesses in uncertain times? It depends on the uncertainty. If it’s a personal situation rife with instability, I’d say it’s probably not a great idea to add more to your plate. If it’s instability in the world, then you’re going to be waiting for a long time for the right time to start your business,” he said.
“Do what you can to add safety nets before starting your business (whether that’s having X months’ living expenses saved, a healthy pipeline of leads, etc.), but know that there’s always risk involved.
But the thing about risk? Reward usually comes with it.”