As the global number of COVID-19 cases surpasses the 300-million mark, the future of brick-and-mortar stores continues to be challenged by their digital counterparts. At the start of the pandemic, online shopping hit an all-time high due to enforced lockdowns. This signaled the adaptation of entrepreneurs to the demands of the market- accessibility to the goods and assistance companies offer through an online platform and the immediate home delivery of anything and everything ordered by consumers online.
Since the pandemic brought about new pain points in many industries, business owners look to innovating their existing enterprises or relaunching them as an entirely new company. Although startups and other new businesses are riskier than existing brands, there is a growing demand from social consumerism advocates to support smaller businesses rather than large and renowned establishments. Therefore, the forced shift from physical to digital stores should be seen as an opportunity by entrepreneurs to further establish a recent kind of management.
1. Outsourcing
When businesses are in their early stages, they often do not have a lot of capital. This is often aided by outside investments which become partners or a credit line for the company. In either case, capital is limited, so the owner of the company has to deal with it and find ways to minimize costs. They may not be able to put a regular employee on the payroll, and that means they have to outsource certain positions.
For instance, a business owner can hire HR services to handle the employment process or formalize certain parts of the company, especially in its infancy. They can also iron out issues that may arise now and then. Since this can be a role that is needed for only a certain period, entrepreneurs will save money when these responsibilities are outsourced rather than having someone on the payroll. This can be a more feasible way of working in the current work-from-home setup because it is easier to find cheaper labor online since business owners are not confined to a particular geography.
2. Renting to Own
Buildings or office space, and equipment, tend to be capital-intensive. Business owners need money to gain these assets, but while the company is still in its early stages, renting to eventually own an asset instead may be a better option. Banks can make agreements with entrepreneurs to settle for a lease-to-own option as well to make sure that they have the machinery needed to make the venture a success. For the digital entrepreneur, this can be in the form of workspaces or equipment to make their online business work.
Although it may cost more than buying an asset outright, it may be the only option to cut down on expenses and make the business idea seem more feasible. When a company pays for capital-intensive assets from the get-go, it can find it challenging to gain investors because the payback time might be too far off. By looking at alternatives to reduce costs early on, the company can focus on making a high-quality product or delivering impeccable assistance to their clients instead of worrying about paying dues to their lenders for exorbitant purchases.
3. Wearing Many Hats
Similar to any other business with a sole proprietorship or a partnership of aspiring entrepreneurs, the owners often have to wear many hats before they can start hiring people. As mentioned earlier, capital is limited and should mostly be directed to attaining turnovers. Though some business owners pay themselves a salary, others decide on transforming their salary into retained profit instead so that the company can grow and fund its future purchase orders.
Since business owners with little capital cannot hire a lot of people for the various roles and responsibilities in the company, they will have to perform the tasks themselves. For instance, they will have to act as the chief executive officer and the logistics manager at the same time. They might even have to brush up on some selling skills and be their own sales executive. This is one of the many challenges involved in starting from scratch, but it is a common way to minimize costs while the company does not have enough for employees.
A remote work setup is already difficult for both the employee and the employer but starting a business during the pandemic is an opportunity that not a lot of people passed on. There are gains to be had when there are limitations set, and this can often lead to innovating some cost-cutting solutions for the future set of entrepreneurs.
