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6 Steps to Starting a Business Successfully During the Worst of Times

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September 29, 2020 7 min read

Opinions expressed by Entrepreneur contributors are their own.

I successfully started and grew two coaching businesses during the 2008 economic and 2020 pandemic, respectively. Although I wish the world’s circumstances were better when I chose to start these businesses, the truth is sometimes those harsher conditions make a better

How do you create and grow these brands when all warning signs are telling you to wait? I asked three other people who started or grew their companies under seemingly dire circumstances and used our collective stories to give you a six-step plan for starting a business at any time.

Take advantage of forced conditions

Although we can never control outside conditions like a pandemic or economic recession, we can choose how we respond to them. In 2008, I started my business because I needed to get out of my parents’ house after graduating college. I didn’t choose the circumstances, but I also didn’t let them dictate how I reacted. 

Here’s an impressive list of companies that started deep in the economic recession of 2008 to 2009 when we were told “no one was spending money.” 

  • Uber
  • Airbnb
  • Slack
  • Square
  • Venmo
  • WhatsApp

And those are the big ones. Hundreds, if not, thousands of other successful companies we don’t hear about also launched during that time.

“Once the pandemic hit and the company I was working for was forced to layoff the entire recruiting team, I was left with a decision of whether to join a large and secure company or try my hand at making TenX Recruiting a reality,” says Freddie Gonzalez, whose company does recruiting and recruiting operations consulting for startups and mid-sized companies.

Related: Working Crazy Hours Is Exhausting, Draining and Painful. But Sorry Entrepreneurs, It’s Necessary.

You don’t need to be perfect

What holds so many people back from taking the plunge and starting their business is that they feel they need to “have it all together.” We’ve seen entrepreneurs and businesses receive funding just from a simple idea, without a tangible product or even a website available.

“Following all the rules can be limiting. Not everything will go perfectly, but that’s part of the gig,” says Christine Perkett, founder of Yup Sup, an active lifestyle brand that offers custom stand up paddle boards, beach apparel, art and accessories. “As a marketer, I would never suggest this strategy but COVID made Yup Sup’s launch an exception. We had just sitting here — our boards and were ready ahead of our website.”

Even though its website wasn’t ready, Yup Sup still sold out its inventory through other methods, which shows customers care more about the product than the experience. When you let go of what the experience of starting a business “should” look like, so many opportunities will follow. 

Related: 4 Tips for Discovering a Great Business Idea During the Pandemic

Fill a specific need

Over the past several months I’ve read about the number of people losing jobs and PPP money running out, but I’ve also heard about friends getting hired, starting businesses and experiencing growth. No matter what happens in the world, there will always be a need, which will provide opportunities for those able to fulfill it.

When I started my first coaching business in 2008, I noticed a surge in people looking to get into relationships as they sought cohabitation as a form of economic stability. When they were having trouble making that happen, there was a huge opportunity for me to provide a service to support them.

There’s always opportunity if you look for it. Take Yup Sup’s Perkett’s experience: “When the warm weather started just after the initial stay-at-home orders, people wanted to get outside, but they still had to socially distance. Throughout the industry this summer, sales skyrocketed, factories were flooded with requests and people were clamoring to find stand up paddle boards. We felt it was the right thing to do to sell our inventory even though the site wasn’t yet launched.”

Yup Sup executed a company launch via social media, and its boards sold out in just days. “As an entrepreneur, you have to recognize unique opportunity, be willing to take calculated risks and find innovative solutions,” Perkett says. “Our decision to launch early encompassed all of those attributes.”

Create urgency by giving yourself a timeline

When I look back at all the times I committed and stepped up in my business, there was one thing in common: a timeframe. Time is the essential factor in doing something important, especially if fear has been holding you back from starting.

“I gave us one month,” TenX Recruiting’s Gonzalez told himself. “If I couldn’t get a client in one month, then I’d go work at one of those large companies.”

When you give yourself an uncomfortable window of time, your level of urgency and effort ramps up immediately. “At first it was a little quiet, but after about two weeks, the responses started to trickle in and I was getting a lot more interest,” he says.

Notice key results, not what others think

When you’re hesitant to get started, it doesn’t help when you have others who doubt your ability to succeed. The way to clear the noise and know if you’re on the right track is by looking at results, either yours or others’.

“During lockdown, I became a lot more aware of my surroundings and the energy my home could hold,” says Kelly Welch, founder of Organized by KW, a professional organization and interior styling business. “I knew I wasn’t alone. People were feeling overwhelmed and claustrophobic in their homes, because I saw a huge increase in inquiries for my organizational services.”

If you don’t have specific results to validate what you’re doing, you can try applying simple logic to the business idea you have, like Gonzalez did. “I was getting conflicting advice from mentors and people I really respected, saying, ‘I wouldn’t do that’ or ‘I’d hunker down with a stable company.’ After doing some serious thinking, it became clear to me –– if companies are laying off all their recruiters, what’s going to happen when they need to hire?”

Related: How One Startup Went From Almost Shutting Down to Raising More Than $1 Million

Take care of yourself and find your fun

This is the most important step of all. If you are not happy with your current situation, you might not have a better chance to explore new opportunities for greener pastures than right now, when things appear “slow.”

“There’s never a time to start something new,” Welch says. “For the first time in a while, I’m truly happy waking up and doing what I’m passionate about. I’m glad I took the leap.”

You have a great chance to focus on what you want to do and what makes you happy. Although we can’t control the outside world, the two things we can control are our attitude and effort. Perkett sums it up well: “Surround yourself with positive mentors, do your research, and don’t forget to make self-care and wellness a part of your journey.”

Not only is it vital for long-term success, it could also inspire your next business.

Related: Tired of Being Kicked to the Curb? Maybe It’s Time To Be Your Own Boss.

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The Trump campaign celebrated a growth record that Democrats downplayed.

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The White House celebrated economic growth numbers for the third quarter released on Thursday, even as Joseph R. Biden Jr.’s presidential campaign sought to throw cold water on the report — the last major data release leading up to the Nov. 3 election — and warned that the economic recovery was losing steam.

The economy grew at a record pace last quarter, but the upswing was a partial bounce-back after an enormous decline and left the economy smaller than it was before the pandemic. The White House took no notice of those glum caveats.

“This record economic growth is absolute validation of President Trump’s policies, which create jobs and opportunities for Americans in every corner of the country,” Mr. Trump’s re-election campaign said in a statement, highlighting a rebound of 33.1 percent at an annualized rate. Mr. Trump heralded the data on Twitter, posting that he was “so glad” that the number had come out before Election Day.

The annualized rate that the White House emphasized extrapolates growth numbers as if the current pace held up for a year, and risks overstating big swings. Because the economy’s growth has been so volatile amid the pandemic, economists have urged focusing on quarterly numbers.

Those showed a 7.4 percent gain in the third quarter. That rebound, by far the biggest since reliable statistics began after World War II, still leaves the economy short of its pre-pandemic levels. The pace of recovery has also slowed, and now coronavirus cases are rising again across much of the United States, raising the prospect of further pullback.

“The recovery is stalling out, thanks to Trump’s refusal to have a serious plan to deal with Covid or to pass a new economic relief plan for workers, small businesses and communities,” Mr. Biden’s campaign said in a release ahead of Thursday’s report. The rebound was widely expected, and the campaign characterized it as “a partial return from a catastrophic hit.”

Economists have warned that the recovery could face serious roadblocks ahead. Temporary measures meant to shore up households and businesses — including unemployment insurance supplements and forgivable loans — have run dry. Swaths of the service sector remain shut down as the virus continues to spread, and job losses that were temporary are increasingly turning permanent.

“With coronavirus infections hitting a record high in recent days and any additional fiscal stimulus unlikely to arrive until, at the earliest, the start of next year, further progress will be much slower,” Paul Ashworth, chief United States economist at Capital Economics, wrote in a note following the report.

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Black and Hispanic workers, especially women, lag in the U.S. economic recovery.

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The surge in economic output in the third quarter set a record, but the recovery isn’t reaching everyone.

Economists have long warned that aggregate statistics like gross domestic product can obscure important differences beneath the surface. In the aftermath of the last recession, for example, G.D.P. returned to its previous level in early 2011, even as poverty rates remained high and the unemployment rate for Black Americans was above 15 percent.

Aggregate statistics could be even more misleading during the current crisis. The job losses in the initial months of the pandemic disproportionately struck low-wage service workers, many of them Black and Hispanic women. Service-sector jobs have been slow to return, while school closings are keeping many parents, especially mothers, from returning to work. Nearly half a million Hispanic women have left the labor force over the last three months.

“If we’re thinking that the economy is recovering completely and uniformly, that is simply not the case,” said Michelle Holder, an economist at John Jay College in New York. “This rebound is unevenly distributed along racial and gender lines.”

The G.D.P. report released Thursday doesn’t break down the data by race, sex or income. But other sources make the disparities clear. A pair of studies by researchers at the Urban Institute released this week found that Black and Hispanic adults were more likely to have lost jobs or income since March, and were twice as likely as white adults to experience food insecurity in September.

The financial impact of the pandemic hit many of the families that were least able to afford it, even as white-collar workers were largely spared, said Michael Karpman, an Urban Institute researcher and one of the studies’ authors.

“A lot of people who were already in a precarious position before the pandemic are now in worse shape, whereas people who were better off have generally been faring better financially,” he said.

Federal relief programs, such as expanded unemployment benefits, helped offset the damage for many families in the first months of the pandemic. But those programs have mostly ended, and talks to revive them have stalled in Washington. With virus cases surging in much of the country, Mr. Karpman warned, the economic toll could increase.

“There could be a lot more hardship coming up this winter if there’s not more relief from Congress, with the impact falling disproportionately on Black and Hispanic workers and their families,” he said.

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Ant Challenged Beijing and Prospered. Now It Toes the Line.

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As Jack Ma of Alibaba helped turn China into the world’s biggest e-commerce market over the past two decades, he was also vowing to pull off a more audacious transformation.

“If the banks don’t change, we’ll change the banks,” he said in 2008, decrying how hard it was for small businesses in China to borrow from government-run lenders.

“The financial industry needs disrupters,” he told People’s Daily, the official Communist Party newspaper, a few years later. His goal, he said, was to make banks and other state-owned enterprises “feel unwell.”

The scope of Mr. Ma’s success is becoming clearer. The vehicle for his financial-technology ambitions, an Alibaba spinoff called Ant Group, is preparing for the largest initial public offering on record. Ant is set to raise $34 billion by selling its shares to the public in Hong Kong and Shanghai, according to stock exchange documents released on Monday. After the listing, Ant would be worth around $310 billion, much more than many global banks.

The company is going public not as a scrappy upstart, but as a leviathan deeply dependent on the good will of the government Mr. Ma once relished prodding.

More than 730 million people use Ant’s Alipay app every month to pay for lunch, invest their savings and shop on credit. Yet Alipay’s size and importance have made it an inevitable target for China’s regulators, which have already brought its business to heel in certain areas.

These days, Ant talks mostly about creating partnerships with big banks, not disrupting or supplanting them. Several government-owned funds and institutions are Ant shareholders and stand to profit handsomely from the public offering.

The question now is how much higher Ant can fly without provoking the Chinese authorities into clipping its wings further.

Excitable investors see Ant as a buzzy internet innovator. The risk is that it becomes more like a heavily regulated “financial digital utility,” said Fraser Howie, the co-author of “Red Capitalism: The Fragile Financial Foundation of China’s Extraordinary Rise.”

“Utility stocks, as far as I remember, were not the ones to be seen as the most exciting,” Mr. Howie said.

Ant declined to comment, citing the quiet period demanded by regulators before its share sale.

The company has played give-and-take with Beijing for years. As smartphone payments became ubiquitous in China, Ant found itself managing huge piles of money in Alipay users’ virtual wallets. The central bank made it park those funds in special accounts where they would earn minimal interest.

After people piled into an easy-to-use investment fund inside Alipay, the government forced the fund to shed risk and lower returns. Regulators curbed a plan to use Alipay data as the basis for a credit-scoring system akin to Americans’ FICO scores.

China’s Supreme Court this summer capped interest rates for consumer loans, though it was unclear how the ceiling would apply to Ant. The central bank is preparing a new virtual currency that could compete against Alipay and another digital wallet, the messaging app WeChat, as an everyday payment tool.

Ant has learned ways of keeping the authorities on its side. Mr. Ma once boasted at the World Economic Forum in Davos, Switzerland, about never taking money from the Chinese government. Today, funds associated with China’s social security system, its sovereign wealth fund, a state-owned life insurance company and the national postal carrier hold stakes in Ant. The I.P.O. is likely to increase the value of their holdings considerably.

“That’s how the state gets its payoff,” Mr. Howie said. With Ant, he said, “the line between state-owned enterprise and private enterprise is highly, highly blurred.”

China, in less than two generations, went from having a state-planned financial system to being at the global vanguard of internet finance, with trillions of dollars in transactions being made on mobile devices each year. Alipay had a lot to do with it.

Alibaba created the service in the early 2000s to hold payments for online purchases in escrow. Its broader usefulness quickly became clear in a country that mostly missed out on the credit card era. Features were added and users piled in. It became impossible for regulators and banks not to see the app as a threat.

ImageAnt Group’s headquarters in Hangzhou, China.
Credit…Alex Plavevski/EPA, via Shutterstock

A big test came when Ant began making an offer to Alipay users: Park your money in a section of the app called Yu’ebao, which means “leftover treasure,” and we will pay you more than the low rates fixed by the government at banks.

People could invest as much or as little as they wanted, making them feel like they were putting their pocket change to use. Yu’ebao was a hit, becoming one of the world’s largest money market funds.

The banks were terrified. One commentator for a state broadcaster called the fund a “vampire” and a “parasite.”

Still, “all the main regulators remained unanimous in saying that this was a positive thing for the Chinese financial system,” said Martin Chorzempa, a research fellow at the Peterson Institute for International Economics in Washington.

“If you can’t actually reform the banks,” Mr. Chorzempa said, “you can inject more competition.”

But then came worries about shadowy, unregulated corners of finance and the dangers they posed to the wider economy. Today, Chinese regulators are tightening supervision of financial holding companies, Ant included. Beijing has kept close watch on the financial instruments that small lenders create out of their consumer loans and sell to investors. Such securities help Ant fund some of its lending. But they also amplify the blowup if too many of those loans aren’t repaid.

“Those kinds of derivative products are something the government is really concerned about,” said Tian X. Hou, founder of the research firm TH Data Capital. Given Ant’s size, she said, “the government should be concerned.”

The broader worry for China is about growing levels of household debt. Beijing wants to cultivate a consumer economy, but excessive borrowing could eventually weigh on people’s spending power. The names of two of Alipay’s popular credit functions, Huabei and Jiebei, are jaunty invitations to spend and borrow.

Huang Ling, 22, started using Huabei when she was in high school. At the time, she didn’t qualify for a credit card. With Huabei’s help, she bought a drone, a scooter, a laptop and more.

The credit line made her feel rich. It also made her realize that if she actually wanted to be rich, she had to get busy.

“Living beyond my means forced me to work harder,” Ms. Huang said.

First, she opened a clothing shop in her hometown, Nanchang, in southeastern China. Then she started an advertising company in the inland metropolis of Chongqing. When the business needed cash, she borrowed from Jiebei.

Online shopping became a way to soothe daily anxieties, and Ms. Huang sometimes racked up thousands of dollars in Huabei bills, which only made her even more anxious. When the pandemic slammed her business, she started falling behind on her payments. That cast her into a deep depression.

Finally, early this month, with her parents’ help, she paid off her debts and closed her Huabei and Jiebei accounts. She felt “elated,” she said.

China’s recent troubles with freewheeling online loan platforms have put the government under pressure to protect ordinary borrowers.

Ant is helped by the fact that its business lines up with many of the Chinese leadership’s priorities: encouraging entrepreneurship and financial inclusion, and expanding the middle class. This year, the company helped the eastern city of Hangzhou, where it is based, set up an early version of the government’s app-based system for dictating coronavirus quarantines.

Such coziness is bound to raise hackles overseas. In Washington, Chinese tech companies that are seen as close to the government are radioactive.

In January 2017, Eric Jing, then Ant’s chief executive, said the company aimed to be serving two billion users worldwide within a decade. Shortly after, Ant announced that it was acquiring the money transfer company MoneyGram to increase its U.S. footprint. By the following January, the deal was dead, thwarted by data security concerns.

More recently, top officials in the Trump administration have discussed whether to place Ant Group on the so-called entity list, which prohibits foreign companies from purchasing American products. Officials from the State Department have suggested that an interagency committee, which also includes officials from the departments of defense, commerce and energy, review Ant for the potential entity listing, according to three people familiar with the matter.

Ant does not talk much anymore about expanding in the United States.

Ana Swanson contributed reporting.

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