Malaysians are slowly numbing to the mention of COVID-19 and its negative effects. Multinational corporations (MNC) and small and medium enterprises (SME) are shutting down or downsizing, leaving families in dire situations. The livelihood of many have been severely affected while the world will not see the last of this pandemic in a foreseeable future. Though seemingly inevitable, it is pertinent that we focus instead on aspects within our control and combat the negativity surrounding us. With unemployment soaring to unprecedented rates, perhaps the disposition in job creation via shrewd and strategic entrepreneurialism is the most logical solution to the impact of the pandemic.
According to the Department of Statistics Malaysia (DOSM), SMEs comprises approximately 98% of all businesses in Malaysia and contributes about 40% of the total gross domestic product (GDP) while accounting for 48.4% of total jobs in the country. Viewing the pandemic from a different perspective, this situation presents itself as an opportunity for aspiring entrepreneurs who have astute business ideas to finally commence. The notion of a startup is twofold; to secure your own income and creating employment for others. New start-ups can significantly impact a local community through its innovative goods, services and job creation.
To answer the question – “when is the best time to start a business?”, is there ever a “right” time? There will always be obstacles, hindrances, and reasons to delay your entrepreneurial ambitions. As history has presented, great companies have taken the plunge and turn a crisis into an opportunity. In 2008, Uber and Airbnb took advantage of the financial crisis by identifying gaps in the market to start their business, and have transitioned into billion-dollar startups since then.
One of the many “perks” during a downturn is the human resource that is usually scarce. The recessions have forced layoffs, retrenchments and lower overall salary packages. Entrepreneurs should leverage the situation as they may now be able to find the right partner or hire talents that they previously could not afford. Furthermore, other costs such as rent, utilities and interests have been lowered and can be exploited to start business operations at a lower expense.
While customer acquisition costs are usually the number one stumbling block for new startups, the epidemic has changed the landscape by lowering customer’s propensity to try new products whether out of changing needs or necessity. In addition, online shopping is growing at an exponential rate, where businesses can reach customers at a lower cost than traditional brick and mortar retail. The pandemic has revealed the resilience of Malaysians in doing business.
During the first lockdown, multitudes of SMEs surfaced to provide necessities such as face masks, hand sanitizers and necessary healthcare items at a competitive rate nationwide. During the quarantine, entrepreneurs were born as they used social media to peddle home-cooked food, handcrafted items, accessories and many more while using the live-show features to engage, entertain and sell. This was made possible by other entrepreneurs who also initiated ventures in supporting industries such as logistics and digital marketing to keep up with this surge in demand.
Since then, the government has been hard at work forming new initiatives to continue supporting entrepreneurship, especially during the announcement of the Budget 2021. A total of RM322.5 billion is allocated which encompasses training entrepreneurs, promoting Malaysia made products, micro-financing small businesses, tax breaks and research and development. These funds aim to promote economic recovery while empowering the wellbeing of Malaysian entrepreneurs.
Portugal, the largest exporter of bicycles in Europe expected dwindling sales and exports due to the epidemic. Instead, what they experienced was a sudden surge in demand for bicycles due to the fear of close contact in public transportation and preferred a more personal transport. Coupled with increased health and environmental awareness, this became a driving motivation for many to purchase bicycles and have directly contributed to bicycle sales, while more businesses started bicycle manufacturing.
Starting a business requires a lot of commitment and courage. There risks are great, but the rewards are greater. One may fail, but failures are invaluable lessons. Conversely, this could be the time to shine and to achieve your life goals and aspirations. Cast your doubts aside, do your due diligence and research to seize the opportunity that the COVID-19 pandemic has presented you with. In a sense, “right now” is the best time to start a business, so what are you waiting for?
Dr Vincent Yeo, lecturer at the School of Management & Marketing, Faculty of Business & Law at Taylor’s University