Opening a new business during a period of economic and social crisis, such as the current pandemic, may seem like a risky venture and for certain sectors this may certainly be true.
However, for those looking to launch a new tech project, particularly one that supports remote working or artificial intelligence, then there may have never been a better opportunity.
Many businesses are looking to pivot their operations and take services online, while others are exploring ways to innovate and build resilience within their operations, which is why tech solutions of various kinds are in growing demand across a wide range of sectors.
Research from banking group Santander, conducted among 2,050 UK SME senior leaders, found that 57 per cent of SMEs adapted and changed the way they do business as a result of COVID-19, with 14 per cent moving their business online and a further 13 per cent changing or innovating products or services to ensure continued trading.
Of those who had adapted their business model during the pandemic, a third said that they intended to make the changes permanent, after almost half found they not only survived lockdown but grew their customer base during the crisis.
If you are looking to start a business to tap into this demand for technological solutions you are not likely to be alone. A survey by JustBusinesss of 428 entrepreneurs has found that more than one in five entrepreneurs are starting a business that was not planned before the pandemic.
There are also historical examples of businesses like Groupon, Uber and Airbnb, set up in the 2008 recession, and even further back Disney, which was established during the Great Depression, who were created and grew considerably during a period of economic decline.
Already there have been a number of new businesses launched during lockdown that are starting to gain attention thanks to their initial success. In some cases, these businesses have directly tapped into demand for medical equipment, data gathering or remote working solutions.
With so many businesses indicating that they intend to fundamentally alter the way their business operates, now may be an ideal chance to innovate and capture a growing market.
Of course, starting any new businesses is not without risk. During this period businesses may find that lenders and investors are more risk-averse due to concerns about a lengthy recession and the availability of Government support may also decline.
However, if a business can come up with an effective business model built around an in-demand product or service then this shouldn’t significantly affect their chances of success, especially in a sector such as IT and technology, where businesses are looking to invest.
In fact, the latest data from research group McKinsey suggests that 76 per cent of business leaders are considering implementing changes to their use of technology and systems as a result of Coronavirus.
If you are looking to launch a start-up then it is important that you seek advice early on from an accountancy firm that understands the needs of new businesses.
Our experienced tech and start-up specialists at Davis Grant have supported a wide range of companies through their life cycle from their founding, through their growth and on to their eventual exit in some cases.