Rouzbeh Pirouz is Co-Founder and Senior Partner at London-based Pelican Partners, a real estate and private equity investment firm.
The UK is facing a perfect storm in 2021. Brexit is now a reality and is creating severe barriers to trade for businesses that export to the European Union (EU). As the effects of the pre-Christmas trade deal continue to unfurl, it seems certain that all kinds of business sectors will continue to face barriers to trade.
That would be challenging enough for any young entrepreneur considering launching a start-up. But when we add in the ongoing pandemic and its devastating impact on the UK’s economy, not to mention our collective mental health due to the high death rate, 2021 can feel bleak. But almost a year into the pandemic, young entrepreneurs are proving their resilience and ability to adapt to any challenges thrown their way.
Young entrepreneurs proving resilience in the face of multiple challenges
COVID-19 has caused challenges for businesses across every sector and industry. We are coming up to the anniversary of the first COVID-19 death in the UK (5 March 2021), and the changes the corporate world has experienced since then have been immense and unprecedented.
From remote working for millions to constantly shifting consumer demands, along with people spending less and entire industry sectors completely halted in their tracks, the business landscape is unrecognisable compared with pre-pandemic times.
Casting our minds back to the very first lockdown towards the end of March 2020, there were major concerns that entrepreneurs would be squeezed out. I was particularly concerned for young entrepreneurs and start-up owners. Since then, it’s clear that the entrepreneurial spirit is alive and kicking and ensuring innovation and new ideas are still thriving.
Start-ups everywhere have continued to innovate and evolve to ensure they’re still competitive. New trends continue to emerge, and business owners are adapting faster than ever.
Disruption and uncertainty lead to innovative strategies and new solutions
While speed and innovation were obviously priorities for entrepreneurs before the pandemic, there is no doubt that the speed with which they can adapt to changes is key to success.
The levels of disruption caused by COVID-19 have changed everything, from the way entrepreneurs strategise to the execution of their plans. Young people with big ambitions are facing all kinds of issues not experienced in many generations.
From cancelled exams, uncertain tuition, virtual course and suspended internships, the traditional routes for young people into business are less certain than they’ve ever been. The only networking opportunities shifted online, leaving young people to find completely new ways to become entrepreneurs.
Despite all of this disruption and distress, the strength of the UK’s Generation Z (up to 24 years old) entrepreneurs is clear. From entrepreneur-led start-ups like EMenuNow to DeepReel, the innovation and game-changing product development continues unabated.
EMenuNow is a Fintech start-up that offers contactless payments and menu ordering services. It was born from the shift online caused by the pandemic and is a great example of the fast thinking that entrepreneurs have been doing to improve services this new reality. DeepReel reflects a different trend that has arisen from COVID-19, that of the sharp rise in online and virtual interactions.
These new opportunities arose directly from the impact of the pandemic and the lockdowns in place all over the world. And these are exactly the kinds of opportunities that will continue to arise as the world adapts to living with COVID-19.
Sustainable solutions are prioritised by young entrepreneurs
It’s also encouraging to see that issues of social wellbeing and sustainability are constantly at the top of the entrepreneurial agenda. All kinds of social enterprises, from those engaged with feeding and helping the homeless to environmentally conscious start-ups are fast-tracking their plans and rolling out services.
With millions of people now working from home in the UK and millions more involved with home schooling their children due to the schools being closed, the lines between home and professional life are increasingly blurred.
Entrepreneurs are responding to these changes and their impact on personal wellbeing with edible products, wellbeing apps, exercise apps and many more long-term strategic offerings that will outlast the immediate impact of the pandemic. The focus is shifting from launching a product or service with the view of getting rich and selling it off, to creating sustainable services that will be used for years to come.
Successful businesses are born out of times of adversity
Social distancing and remote working challenged the way many businesses have worked for decades. Particularly for the hospitality sector, everything has changed. Pubs, restaurants and bars have had to completely change the way they do business to fit this new reality.
Many businesses have shifted to engage at a micro-local level in a way that hasn’t been seen for years. Physical office space is no longer the first concern for start-up owners or businesses and there is a shift towards agile working patterns.
Any entrepreneurs doubting that now is a good time to pursue their ambitions would do well to remember that many successful multinationals started during times of recession and economic uncertainty. From Burger King’s rapid expansion during the United State’s economic problems following the Korean War in the 1950s to Microsoft’s launch during the 1970s, these huge success stories show that there is always opportunity to be discovered by innovative entrepreneurs.
Reasons why entrepreneurs can survive and thrive in 2021
Starting a business during a recession is a viable option, as demonstrated by many young entrepreneurs since the outbreak of COVID-19. Here are a few reasons why:
- Innovation is driven by necessity
We need solutions for the problems caused by the pandemic and its impact on the economy. People need ways to access their own money, find jobs, interact with people, source medicine, pay for goods and services, access healthcare and much, much more.
The specific set of challenges caused by COVID-19 are presenting opportunities for innovative and forward-thinking start-ups. We’ve seen local companies step in and fill gaps left by bigger businesses, particularly within the food sector. And we’ve seen lots of courses, clubs and networking switch to online. The agile nature of start-ups allows this kind of pivot in service – and this is exactly what we all need right now.
- Borrowing is more accessible
Economic uncertainty means an upside for those looking for funding, particularly because of lower interest rates making loans more affordable. Investors look for opportunities to make more for their stake, and they are increasingly getting this from start-ups and entrepreneurs.
- Availability of high-level talent
Entrepreneurs are tapping into the vast swathes of super talented people who have found themselves out of work due to the pandemic. It’s giving small businesses the opportunity to get some truly top talent on board in a way that wouldn’t have been possible.
There has been a shift in start-up trends during the pandemic, including food delivery, deliverable gifts and luxuries, online sales, ecommerce, online tutoring and education and specialist services such as communication and accountancy.
All of these trends have the ability to continue to be successful when the world goes back to a more normal working pattern. The new generation of entrepreneurs are proving their savvy, their understanding of the modern world and acceptance of the very real need to innovate and adapt. And this is why they will drive the UK forward and rescue the economy for future generations.
Mohit Tater 2021-02-23 04:39:11