It’s true, we’re in a recession – and people are rightly worried about what that means if their plans were to start or grow their business at this time. Right now, the UN is projecting that by the end of June, 200 million people worldwide will be unemployed as a result of COVID.
Back in 2017, economists interviewed COO’s around the world and found that they believed 50% of the workforce would become freelance within 10 years (by 2027). At the time, 80% of workers in the US were working full time for a company. Now, economists project that by 2023, 60-75% of the American workforce will be freelance (and according to investor Nathalie Molina Niño, “Freelance is just a term entrepreneurs use to charge less”).
This is a topic on so many minds right now – between the pandemic and the uncertainty of our economic future, is it an appropriate time to start or attempt to grow your business? That’s why, last Friday, Tresta teamed up with Paul Carrick Brunson for a special Better with Paul LIVE panel discussion, which focused on just that.
Paul is an author, philanthropist, and serial entrepreneur, who has founded and exited three successful businesses, after spending nearly a decade working for two billionaires (including Oprah Winfrey).
Friday’s episode of Better with Paul LIVE (which Paul hosts, in real time, on Facebook, Periscope, LinkedIn and YouTube Live each Monday and Friday) featured an impressive panel:
- Nathalie Molina Niño: CEO of BRAVA Investments, a company that aims to help grow startups and support businesses that benefit women, and author of LEAPFROG: The New Revolution for Women Entrepreneurs.
- Ramunda Lark Young & Derrick Young: Owners and Co-Founders of MahoganyBooks, an award winning bookstore that began online in 2007 and opened their first brick & mortar in DC in 2017.
- Violet Lim: CEO & Co-Founder of LunchActually, an Executive Director for the Matchmaking Institute, and author of the best-selling book, Lessons from 15,000 First Dates.
Here are our takeaways from Friday’s live session:
When is the right time to start a business?
According to Paul, “We live in an entirely new economy where you must become an entrepreneur. Whether that means you start a full-blown business… or that means that you’re just a freelancer and you’re looking to monetize your skills and your expertise – now, you must rely on you. There’s no question about it. The new economy is here.”
Based on the experience of Derrick & Ramunda Young, there is no right time. When this couple founded Mahogany Books, they were not only in the midst of the Great Recession (2007-2008), but they had also just had a baby. Their perspective: If you’re going to succeed, you have to do it NOW. Start executing now. Of course, you want your work to be well-planned and researched, but you also need to focus on your intention – figure out what’s important to you, which will live on after you, and make a difference – and get going today.
What does it take – operationally – to start a successful business?
Violet Lim is an operational mastermind. She founded her business, LunchActually, in 2004, and even through the Great Recession, she saw strong, substantial, and sustained growth. According to her, it takes five essential ingredients:
- Having the right team
- Having the right culture
- Instilling discipline
- Having a clear vision and mission
- Staying hungry
Violet touched on some key points about building an operation that can withstand economic turmoil, but it seems the special sauce is in defining your vision, and being uncompromising about it. When it comes to vision, create a BHAG (Big Hairy Audacious Goal). Hers was to create one million happy marriages – and whenever she announced that goal to her team, she says, “jaws dropped”. But it’s important to dream big – have a goal, and just go for it.
With the right players, the right practices, and the right vision, you’ll find that that creates a culture of competitiveness and an ability to withstand. As with many businesses today, Violet’s team has been very mindful of the situation with Coronavirus and quarantine, and has pivoted to introduce virtual speed dating, webinars, etc. That awareness and agility is part of what has made LunchActually so successful.
What are some of the top resources available to new entrepreneurs?
According to Nathalie Molina Niño, who was a tech entrepreneur but now focuses on investment, funding goes beyond the government or banks. There are a number of resources that you can leverage in order to fund your new business, but she recommends targeting free money first.
- Salesforce is accepting applications for small business grants right now through their Salesforce Care Small Business Grants initiative.
- LISC (Local Initiative Support Corporation) provides direct financing to small enterprises overlooked by conventional financing channels.
- Facebook is currently offering $100 million in cash grants and ad credits to help businesses which have been negatively impacted by the global outbreak of COVID-19. Through their Boost with Facebook initiative, they are offering grants in 28 cities throughout the United States. The deadline to apply is May 8th, so you’ll want to jump on this one.
The other resource that Nathalie mentioned was crowdfunding, specifically calling out IFundWomen, a startup funding platform providing access to capital through crowdfunding and grants, as well as expert business coaching and networking. Crowdfunding is actually an area where women are disproportionately successful – whether through equity or debt or pre-selling their products.
Her recommendation was to either hire somebody or carve out some time yourself to explore the opportunities in crowdfunding, and make sure that you build a strong strategy and plan for your crowdfunding campaign. In a perfect word, a crowdfunding campaign will start 6 months before launch with development and 1:1 outreach, so you need to start NOW if you’re looking into crowdfunding your business.
How do you create demand without coming off as insensitive during a recession?
There are a number of ways to carve out a place in the market, even during a recession, without being perceived as insensitive – but according to Ramunda Lark Young, it’s all about understanding your audience and adding value. You cannot be tone deaf when people are going through a tumultuous time, but you can weave that into your product/service offerings and the storytelling around your brand.
During a recession (or a pandemic), peoples’ needs are more clear than any other time, so your job is to pick up on what your customers need, and add value where possible. For instance, their team is now selling curated book bundles for kids, which appeal to both children and their parents. With so many American students now distance learning and spending so much time in front of screens, it’s a good way to enrich your kids’ day.
How do you transition to being an entrepreneur?
If you go to the store and pick up any entrepreneur magazine, they’ll show you a sleek Silicon Valley view of what entrepreneurs look like, but the truth is, venture capital funds make up only 0.5% of all startup and business funding. According to Nathalie Molina Niño, VC’s represent an insignificant niche in times like these. In her opinion, if you’ve got a regular job and you’re working on your side hustle, you’re in a good position. She recommends that you keep on that path and grow your side hustle until it’s bringing in enough revenue to exceed your regular salary. That’s the point where you make the jump.
According to Violet Lim, there’s something called “analysis paralysis” – the point where an entrepreneur is paralyzed by worry and doubt, thinking too much and getting confused. This can really set you back on your path, so she recommends you take your idea and put it out in the world. You can create a survey, or run some ads on a prototype of your product to see if there is a need in the market. That will show you the way forward – but no matter what, keep faith and keep moving forward.
What are some of the pitfalls to avoid as you start your business?
- Listening to the naysayers. According to Ramunda Lark Young, you have to strengthen your inner voice. She and Derrick recommend focusing in on your personal goals (not just business goals, but life goals) and passions, surrounding yourself with people who are supportive, who will empower you and help you define your vision, and really getting to know your audience. This leads to micro-expertise that can be really powerful in building a business.
- Doubting the power of PR. Whenever Violet Lim started her business, she was running successful advertising campaigns and growing steadily, but it was public relations that she said was a huge difference maker. The media is always looking for a good story, so you need to focus in on storytelling for your brand. Once you have the perfect story and you’re picking up media attention, you can really see the difference between marketing yourself, and allowing others to help give you credibility and build up your reputation.
- Focusing only on the worst case scenario, and forgetting to plan for the best case. According to Nathalie Molina Niño, this can be an issue especially in times like this – when people are feeling real trauma. While there’s nothing wrong with planning for the worst case, having that bit of savings, having insurance, etc., according to Nathalie, “that’s not vision; that’s not scale; that’s not dreaming,” and entrepreneurs are dreamers. You should plan for the best case scenario, so that when you get a windfall, the planning is in place, and you can execute.
One final note…
Near the end of this conversation, Nathalie Molina Niño also quoted a recent New York Times article by David Sax, which beautifully sums up the importance of the entrepreneurial spirit to America, and why we can’t afford our small businesses and entrepreneurs to be defeated by this crisis – so we thought we’d share it with you:
“Elon Musk will be fine. But if we lose our barber, the fruit store on the corner or the plumber who saved us in a flood, we will have lost a piece of ourselves.”
Watch the full panel discussion here: