The pandemic has forced hundreds of thousands of small businesses to close—many of them permanently—but, believe it or not, we are approaching a new era of entrepreneurs. Last year, we at Incfile saw an unprecedented 132,296 new startups rise up out of the COVID economy, which is nearly a 50 percent jump from 2019.
Despite its overwhelming economic fallout, the pandemic generated record sales for online retail, rapidly accelerating the trend towards e-commerce and web-based services that has been steadily growing over the last decade. Not surprisingly, these two areas represented over 20 percent of total new businesses formed at Incfile in 2020.
Perhaps what was most unexpected, however, was the 58 percent surge we witnessed in new non-profit organizations. This means that, despite an unprecedented year in which so many people were losing their jobs and livelihoods, there was a clear and determined effort to do something to give back.
So key takeaways from 2020: Online retail and services have carved a deeper foothold in our economy now more than ever, and no matter how bad things get, there will always be small businesses seeking to do more and give back. Here are a few lessons we learned while helping new startups take off in 2020 to help budding entrepreneurs take advantage of the trends driving small businesses in 2021.
Ecommerce comes in many shapes and sizes
Coronavirus forced many consumers to do more of their shopping online. Between the urgent directives to stay home whenever possible and physical retail stores closing or operating at limited capacities to maintain social distancing, it’s no surprise that more people chose to visit a website or app to make purchases rather than heading to the store. Many people were ordering products online that they would never have previously, such as groceries or household items.
Countless retailers have e-commerce arms but primarily rely on brick-and-mortar sales for revenue and, thus, had to pivot their strategies in order to stay financially afloat during COVID. Meanwhile, other brick-and-mortar stores experimented with adding new e-commerce options, such as online orders for curbside pickup or local delivery, or adding digital products to their offerings (Zoom class, anyone?). In many areas where popular services like Amazon Prime, Uber Eats, and Postmates aren’t available, local businesses have found themselves rising up to fill that niche with their own employees and resources.
Even if your main focus is a brick-and-mortar business, don’t forget to add an e-commerce arm. Not only will it create long-term value for you and your customers, but it will help you stay resilient beyond a post-COVID economy and create a valuable revenue stream to shield you from future financial stresses. An e-commerce component could even be as simple as bridging online with IRL—curbside pickup, for instance, is a great way to give your customers the immediate gratification of the traditional shopping experience while keeping everyone safe and adhering to lockdown restrictions.
Transforming side hustles into main attractions
As lockdowns began to sweep the country last year, more and more people were finding refuge in social media for up-to-the-minute news, necessary distractions and entertainment, and staying connected to family and friends. But did you also know they were using it to soft-launch their new businesses?
Personal trainers who lost employment at local gyms due to COVID-19 began experimenting with free Instagram “quarantine workouts” before growing into fee-based online memberships. Fortune-telling enthusiasts transformed passions for reading tarot cards into full-time careers on Facebook. A new generation of digital self-starters is capitalizing on e-commerce through entertainment on TikTok, leveraging their creative skills for paid collaborations with major brands. Even private-practice doctors and medical professionals were using social media more and more to communicate with patients and disseminate helpful guidance to increase public awareness.
Thanks to social media, there are myriad ways to not only promote your growing brand at little to no cost but also to test out new ideas and concepts. Everyone’s attention has been turned online even more than usual, and there are a plethora of eyeballs out there waiting to learn about your business. If you have a passion project or hobby you’ve been thinking about turning into your main business, why not use social as a jumping-off point?
Staying connected to give back
During times of crisis, we often get the opportunity to see our best selves emerge. Throughout COVID, we’ve witnessed many stories about selfless individuals who risk their own health and safety to deliver food to the elderly and high-risk, as well as generous citizens donating life-saving food, clothing, medical supplies, and other critical resources.
Donations are up, but so too is the demand for services that give back—as evidenced by a large cohort of new nonprofits registered through Incfile this past year. Many are imitating their corporate counterparts by adding e-commerce to their channel portfolio through easy-to-use and affordable platforms like Shopify. The e-commerce platform offers generous discounts to qualifying charities to help them sell branded merchandise like t-shirts, hats, tote bags, and more. Not only does this raise much-needed money, but it also puts e-commerce to work for worthy and noble causes.
Yes, these are and have been tremulous times, but they have not been without a silver living. In difficult moments, the entrepreneurial spirit has been alive and well among us, and some are using this time to create and build new initiatives while others are reinventing and adapting themselves. And through it all, we still have people seeking to give back to society and create something for the greater good.
Never forget that our previous experiences with economic recession also yielded some of the most successful and enduring companies of our time. Startups like WhatsApp, Instagram, and Uber were created amid difficult circumstances but ended up transforming the world with their products. Take inspiration from businesses who are successfully navigating through the pandemic, and use their lessons to make your own way. There’s never been a better time to launch your passion!
Dustin Ray, Chief Growth Officer and Co-CEO of Incfile
Dustin Ray leads strategic partnerships, business development, and growth initiatives for Incfile. Prior to Incfile, Ray developed and launched the Urban Music and Lifestyle division for Monster Energy, where he ran operations nationally for integrated marketing campaigns and celebrity endorsements. He also operated a graphic design company that serviced the music industry – a 10-year experience in the cutthroat world of music that prepared him for the equally competitive technology sector. Since joining Incfile, he has helped transform the company from a small startup to a nationally recognized brand and go-to resource for business formation services. His vision is to uplift other entrepreneurs to attain the same trajectory for their own businesses. Ray hails from Texas and holds a BBA in Marketing from Texas State University. When he’s not running Incfile’s business strategy, he helps his friends and family with their personal YouTube channels as a creative outlet.