Is this the time to start something new? A new business, product or service? There is hope that the pandemic is receding due to vaccination rates, and that people will begin buying, traveling, eating out and generally consuming again soon. However, considering how many small businesses failed during 2020, because the pandemic, does the risk seem too high?
Roughly half of small business failures, no matter what’s going on in the economy, are due to the target market being too small. That’s what happened to restaurants in 2020 – the market of people who eat out, after growing year over year for 35 years, shrank dramatically. One can imagine that the shrinking market will come roaring back when people are no longer risking lives to eat out.
Target markets are dynamic. Let’s take baby boomers. There are 69.56 million of them, but they are beginning to retire and spend less. Meanwhile, the Millennials (71.12 million of them) who have had a bad rap for living in their parents’ basements, have grown up and are buying houses, having babies, getting bigger cars, and consuming more like the baby boomers used to. In fact, the size of the Millennial generation may be what makes this an ideal time to start a business.
A consumer-based economy, with stimulus and a growing number of consumers, will expand. People will be vaccinated and feel freer to participate in events, programs, travel, eateries, etc. The businesses that provide consumer goods and services will need more supplies and services from other businesses. In other words, things are looking good.
Think clearly about your target market and how you are going to reach them, and then decide whether this is the right time to start your new business! The American economy could use your help!
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Amanda Weathersby is an entrepreneur who sold one business to a publicly traded company and another to her partners. She, like more than 300 speakers at 100 Entrepreneur Foundation classes, also knows about business failures. Creative problem solving and predictive forecasting tools have become her passion.