THE YEAR OF THE COVIDPRENEUR

Many startup businesses launch during (or after) an economic downturn and Covid has been no different. In fact data from HMRC shows that in March 2021 more new businesses were created than in any other month since records began in 1989.

In total, there was almost 726,000 new businesses created in the UK in 2020 (compared to just over 636,000 in 2019) - with the UK ranking in the top 5 countries out of 22 in the UHY global new business creation league table.

No surprise really that much of this increase was in online retail. In the second quarter of 2020 (the peak of the first lockdown) – an average 4,613 new online retail businesses started up in the UK every month (up 66% from the monthly average in 2019 of 2,783). In January 2021, online spending as a proportion of overall UK retail spend also hit a record high of 36.3% - almost double pre-pandemic levels!

As per the data below (provided by Simply Business) - all of fastest growing market sectors were related to helping us improve our homes during lockdown, delivering us things ordered online or providing us with some home comforts e.g. homemade cakes and home hair cuts.?

The two main reasons for starting a new business at such a challenging time are either that the entrepreneur has seen a gap in the changing market or that their own employed position is looking precarious because of the economic downturn - so they have decided to push out on their own through necessity.

So, what does this influx of new competitors mean for existing businesses already serving these markets? Often start ups don't just disrupt markets with their mere presence alone - they often bring new thinking, new innovation and new offerings, which can then leave existing market operators trailing in the 'disruptive' wake.

Standing still is no longer standing still, it's actually going backwards - so established businesses need to look at disrupting their own business model, just to keep apace with the changing market and their customer's changing buying preferences.

I still occasionally get the comment 'I've always done it this way, so I'll continue to do it this way' - but unfortunately this type of fixed mindset is a recipe for near certain business demise and failure.

The adoption of new technology is obviously one thing that many businesses have down during Covid (and will need to continue to do) but also climate change and society reminding us that there are many more vulnerable people out there than ourselves, has made many sit up and think. This new found realisation has then made many of us start to examine other's brand values and sustainable business practices first - before considering using them.

This new consumer focus on sustainability also applies to the job market too - with more informed Gen Zs (under 25's) now entering the job market from their higher education endeavours. Employers now need to have their sustainable goals 'in situ' - otherwise much of the available new talent will be looking elsewhere for an employer that shares their values.

If 2021 was the year of the Covidpreneur then maybe 2022 should be the year of the more sustainable business community and we should all take a harder look at what our impact on society is and what our contribution to society is too? Happy New 'Sustainable' Year.