How Covid-19 Impacted Entrepreneurs
COVID-19 brought many changes in the business world. From disrupting demands to altering business operations, entrepreneurs and startup founders have to adapt to survive. Learn how SHTV’s entrepreneurs are dealing with the pandemic.
Entrepreneurs face a new reality—a health crisis that not only affects millions of people but also disrupted economies. The COVID-19 pandemic caused governments to implement preventive measures to help curve the spread. However, these measures also affected demands for goods and services due to travel restrictions and quarantines.
The Proceedings of the National Assembly of Sciences (PNAS) investigated the pandemic’s effects on businesses with less than 500 employees. PNAS found out that 43.1% of participating 400 companies reported that they have temporarily shut down due to COVID-19. The study also shows most startups and small businesses in the country reduced personnel to mitigate the economic burden caused by the crisis.
But entrepreneurs and startup founders are a resourceful band. In the face of an unprecedented health crisis, they adapted and adjusted their strategies to thrive in the “new normal” environment. Startup Hustle TV’s very own entrepreneurs also felt the effect of COVID-19. Learn how they handled the pandemic through their stories.
The Impact of COVID-19 on Businesses
The effects of the pandemic on different businesses are contextual. It means that different types of businesses experienced varied threats. But one thing is true—every startup is facing challenges.
Closing the Store, Changing Ways
As Heather Steppe, founder and CMO of KC Hemp Co., stated, “COVID-19 has done a number on our company. Back as all of the shutdowns are happening, when things are starting to show its face, we close our storefront.” Her husband, co-founder, and COO of the company added, “We knew that we weren’t going to be able to float two to three months rent payments without having customers in our store.”
The founders admitted that they put everything in their retail store. From selling to manufacturing, they relied on their physical store. They were starting to go online when the pandemic happened.
Another entrepreneur who saw his business affected by the health crisis is Hernan Sias of Business Bros. Before COVID-19, Business Bros was meeting and interviewing clients in person. The pandemic forced the startup to “make a change, a digital change.”
Meanwhile, the founders of Builder Bros, Jaime and Erik Perkins faced project postponements. Because of the virus, they have their recent project pushed back by more than six months. “We have to find ‘tweener’ jobs, which I called an in-between job,” said Erik. They looked for quick-to-finish projects to keep things working. However, the delay caused their other projects to be behind schedule as well.
Jaime added, “Not only did it push us back, but our material supply chain has really been messed up.” This is because many of the materials needed for housing come from outside the country. As a result, raw materials such as lumbers cost 41% more.
While others risked increasing costs, some startups faced revenue loss. As Full Scale’s very own Matt Watson attests, Stackify lost almost seven to eight percent of its revenue at the start of the pandemic. He stated that “some of our customers are out of business” because of COVID-19.
Watson’s co-founder and CEO of Full Scale, Matt DeCoursey, experienced this as well. He saw that the short-term effect of the pandemic had been negative, with clients “immediately retracting the size of their development teams out of precaution and wanting to protect their bottom lines.”
Some entrepreneurs state that the pandemic affected their businesses in minor and sometimes positive ways. Lauren Conaway, founder and CEO of InnovateHer KC, said, “We are very fortunate. A lot of what we were already doing was virtual.”
Mixtape’s designer and CEO Joel Johnson shared the sentiment. His company did not see a lot of impact from the pandemic “because Mixtape is an app, and I licensed the physical deck.”
Andrew Morgan’s Marknology also felt the effect of the pandemic. “I believe we are already on the path to success and being a stable company. But it (COVID-19) accelerated customers across the world being comfortable buying online.” He believes that “the brands that are selling things online or not selling products online became more comfortable with Amazon.” As a result, companies started thinking of doing business on Amazon as an insurance policy instead of a risk for their business.
Startup Hustle TV’s entrepreneurs dealt with different effects of the pandemic. Whether they experienced negative or positive challenges, they all have to adjust to the “new normal.”
How Entrepreneurs Handled the Pandemic
“A return to normal affected our business. Even though ‘normal’ isn’t fully in effect for everyone, there’s light at the end of the tunnel,” said Matt DeCoursey. In the long-term, DeCoursey believes that Covid-19 benefits Full Scale and other startups. As the country slowly returns to normalcy, so will the economy. Here’s how SHTV’s entrepreneurs handled the impact of the pandemic:
“Our new normal is online and e-commerce,” that is what Heather Steppe believes. Forced to adapt and enter e-commerce, KC Hemp Co. cut its overhead cost by 85% and turned profitable. The company is not planning to open another retail store in the foreseeable future.
As Hernan Sias of Business Bro observed, there was an increase in competition when COVID hit. That is why it is important to continue producing quality content to stand out against the new online competitors. Also, online marketing will be one of the best tool entrepreneurs will have during the new normal.
Although the company lost revenue at the start of the pandemic, Stackify was able to bounce back. Most of its clients did well, which benefited the company. “Overall, we did well. We are continuing to grow now,” states Matt Watson.
Matt DeCoursey, meanwhile, noticed that once the vaccination started in the United States, the economy started to rebound as well. “Our (Full Scale’s) phones started ringing, and quite honestly, it hasn’t stopped ringing,” he shared.
SHTV’s entrepreneurs experienced varied effects of the pandemic. However, they all have one thing in common, which is being able to adapt quickly. By accepting the fact that there are many restrictions on doing face-to-face transactions, the founders switched to e-commerce. And, those who were already doing online business consolidated their strategies and took advantage of their opportunities.
Also, Mark Morgan thinks that the pandemic “accelerated e-commerce growth by five to ten years.” Matt DeCoursey also noticed this as clients who insisted on in-office and local-only staff become more amicable with remote staffing. He added that “Overall, the pandemic has a really positive effect on our business, outlook, and the way businesses in the tech industry approached staffing and team building.”
COVID-19 brought along many changes. It has drastically shaped people’s lives and businesses. SHTV encourages everyone to keep moving forward. Although, as Hernan Sias said, “What direction is going forward? We have yet to see. But, I’m looking forward to being a part of it!”
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