Entrepreneurial activity soared in the first couple of years of the pandemic, but the question remains: Can startups survive volatile markets? The current economic climate has presented unprecedented challenges for entrepreneurs, with the big question being whether the influx of new businesses can weather the storm of market instability that has defined the past year.
The surge in entrepreneurial endeavors can be attributed to a variety of factors. Lockdowns disrupted the normal course of business, leading to a significant shift in the relationship between employers and employees. Additionally, the availability of low interest rates, booming stock and housing markets, and government support provided an enticing environment for aspiring business owners. The pandemic also accelerated the trend of low-cost delivery of online goods and services. However, amidst these favorable conditions, the market volatility and uncertainties have raised concerns about the survival of these fledgling companies.
Historically, the majority of startups fail, with around 20% failing within the first two years. The risks posed by volatile stock markets, weak housing markets, rising inflation, and increasing interest rates further compound the challenges faced by entrepreneurs. In such a precarious business environment, what can entrepreneurs do to increase their chances of success?
One serial entrepreneur, with nearly 45 years of experience, offers valuable insights. Firstly, the entrepreneur emphasizes the importance of pursuing a business that aligns with one’s greatest passion. Genuine passion is crucial for sustaining motivation and weathering setbacks on the entrepreneurial journey. Starting a business solely for financial gains is unlikely to provide the necessary determination to overcome obstacles in the long run.
Furthermore, the entrepreneur advises against relying too heavily on external feedback and opinions. While seeking input initially may seem helpful, it can ultimately clutter one’s thinking and weaken resolve. Striking a balance between control and flexibility is crucial. While maintaining tight control over business and financial plans is necessary, unwillingness to adapt and innovate can hinder growth and hinder recruitment of talent.
Collaboration and trust-building are vital components of entrepreneurial success. Entrepreneurs should share their vision and inspire others to contribute to the growth of the business. It requires recognizing the value of collective efforts while nurturing one’s own venture.
Being prepared for the unexpected is a fundamental aspect of entrepreneurship. As Mike Tyson famously said, Everybody has a plan until they get punched in the mouth. Entrepreneurs must be prepared to act swiftly and decisively when faced with unforeseen challenges. While adversity may seem insurmountable, it is crucial to remember that difficult times will pass.
In conclusion, while the pandemic has fueled a surge in entrepreneurial activity, the question of whether startups can survive volatile markets remains. By prioritizing passion, perseverance, adaptability, collaboration, and preparedness for the unexpected, entrepreneurs can increase their chances of weathering the storm. Starting a business is never easy, but with the right mindset and strategies, startups can overcome the challenges posed by volatile markets and ultimately thrive.
