During pre-pandemic times South Africa had an unemployment rate of 30%. According to Statistics South Africa, the unemployment rate stood at 32.5% in the last quarter of 2020, meaning 7.2 million people are unemployed. Furthermore, the Organisation for Economic Co-operation and Development (OECD) predicts that SA’s unemployment levels will rise to 35%. It is quite clear from these statistics that the unemployment trend is worsening at an alarming rate. So instead of waiting to find a job during these unprecedented times, it makes sense to start your own business and this is precisely what is happening across the globe.
In the developed countries like the United States and the United Kingdom there has been an upsurge in new business applications during the pandemic. The Wall Street Journal reported that new business registrations have hit a 13 year high. While some of these entrepreneurs are people that have been retrenched, more than 50% of these entrepreneurs identified a unique business opportunity and decided to take the leap. In the UK the number of new businesses registered in the third quarter saw a 30% increase since 2012. The reason is due to a mix of opportunities and necessity.
In light of many SMME’s closing down in South Africa, opening a business may seem counterintuitive, yet historically, many successful businesses originated during times of crises and economic downturns e.g. Hewlett-Packard (1937-1938 Recession), Microsoft (1973-1975 Recession), Uber (2007-2009 Recession). Recessions have been the launchpad of incredible companies such as General Electric, IBM and Disney. Crises create entrepreneurial opportunities. Now is the time to become an entrepreneur.
Starting a business will help you to take back a measure of control. This will give you a sense of hope and eliminate feeling helpless. There are many opportunities that exist in the market and whilst others are making excuses related to the dire economic conditions, you need to find these opportunities and you need to fill the gap.
Difficult times are also the most opportune time to begin a business since:
- Labour: there is access to an abundance of skilled labour (due to retrenchments and the high number of unemployed people),
- Premises: there is high availability of affordable commercial rental spaces due to companies shutting down and landlords are eager to fill the vacant spaces,
- Resources: there is availability of resources since some businesses that are closing down sell off equipment at very low prices,
- Low rates: interest rates are low (so getting loans will mean lower interest rates)
- Funding: there is access to financial aid for businesses as government bodies and other organisations offer funding and financial assistance during these times
Even though this is an economically difficult period, it is also a once-in-a-lifetime opportunity to take the leap and become an entrepreneur and take charge of your life. If you are currently unemployed the risks are relatively low. You already have the time and for a nominal fee you can register your company and embark on a venture that has the potential to completely transform your life. So identify your passion, conduct the market research and evaluate what you can offer the current market. Take into account what your product or service can offer to consumers living in context of the pandemic. Some companies have rapidly provided personal protective equipment to meet the demands of the market. Don’t let fear be the reason that stops you from realising your passions and attaining your dreams. If you are currently unemployed or want to supplement your income, the best time to start is NOW.
Continue to read our blogs and we will soon be publishing some ideas for start-ups that require minimal capital and we will help you with ideas for businesses that have the potential to succeed in the ever changing market.
Start your business now!
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