One of the largest impacts of the COVID-19 pandemic is on the economy. Many have lost jobs, been forced to retire, or have seen retirement funds disappear overnight. However, the other impact many consider is time. Due to social distancing, many employers nationwide are now requiring everyday operations to be done from home. This means more time with family and in general more time at home. For recent retirees who now have to make financial decisions on whether or not to re-enter the workforce, some are rediscovering old dreams of owning their own business or perhaps tailoring current plans to accommodate the new needs that have arisen due to the pandemic.
Like any entrepreneurial endeavor, everything starts with a business plan. San Jacinto College Business Management Professor Kevin Hale suggests looking at the bigger picture when creating your plan.
“The main thing to consider is what will the world, Texas, or Houston look like post-coronavirus,” said Hale. “What would have worked pre-coronavirus might not suffice, so any considerations have to take into account shifting from how things were to how they might be going forward. Start with looking at businesses that are thriving despite the coronavirus and the various shutdowns and go from there.”
Once the business plan has all of those considerations covered, the next step is researching business loans. COVID-19 has forced interest rates to drop to some of the lowest numbers in decades. Hale reminds entrepreneurs that despite the appealing low rates, it’s still a loan.
“Right now, loans do have low interest rates, but it still has to be repaid,” he said. “Any business should take into account keeping overhead as low as possible to stay financially viable. That means operating with as few employees as possible and no unnecessary expenditures on capital purchases – rent or buy used if possible. Also take into account how much risk you are ready to tolerate. If possible, hold off on taking a loan until 2021 at the earliest, assuming a loan could be had.”
For those looking into what type of business they want to start in the age of COVID-19, Hale suggests looking into the medical equipment supply, delivery services, carry-out food restaurants, and food trucks. These sectors are in high demand everywhere due to social distancing and health safety requirements for employees and patrons. He also advises entrepreneurs to avoid starting brick-and-mortar businesses in retail as well as anything upstream, midstream, or downstream in the oil and natural gas sectors, again due to the pandemic’s effect on companies requiring most, if not all, employees to work from home.
Overall, Hale encourages prospective, new, and current business owners to follow the guidelines put forth by medical professionals regarding social distancing, mask usage, and hygienic practices. Although the current situation fluctuates daily, like all other difficult times, as the saying goes, “this too shall pass.”
“The current state of affairs will end eventually, so do what you must within the law to stay viable and look for opportunities to grow your business,” said Hale. “Be ready to take advantage of whatever may come from where we are now.”
For more information on San Jacinto College business programs, visit sanjac.edu/program/business.
Andrea Vasquez