While many businesses are suffering in the pandemic, some are seeing great success.
The Covid-19 pandemic continues to disrupt many facets of the modern business world. Small and medium businesses have been affected, with over 100,000 businesses closing down their operations permanently. And while many businesses across the country have either reopened or planning to reopen at some point, experts are predicting a second wave of infections over the next few months, which basically means that the effects of the pandemic could be with us for years to come.
Still, businesses across different sectors haven't been impacted equally. While some have seen their fortunes dwindle or disappear altogether, others have experienced unprecedented growth, proving to be uniquely adapted to the conditions presented by the pandemic. Businesses in healthcare, retailers that provide food, drinks, and entertainment to people at home, and others that have learned to adapt to this new normal continue to find success under unconventional conditions.
For entrepreneurs looking to get into a new venture or pivot into a new industry, gaining insight into a target market or industry beforehand can have many strategic advantages. These include identification of entry barriers, insight into legal and tax regimes, and, even more importantly, how attractive these industries are to investors. Markets with a high concentration of investors often indicate high growth potential, especially during the current crisis.
So, if you're looking to start a new business or pivot away from a non-performing sector, here are some industries that offer real chances at success during and even after the coronavirus epidemic.
1. E-commerce and delivery services
As the Covid-19 pandemic rages on, e-commerce businesses continue to reap the benefits of a world with reduced physical interactions. Research shows that there has been a 68% year-over-year revenue growth for US online retailers from mid-April compared to the 49% that was recorded in January earlier this year. For many established and up-and-coming e-commerce businesses, professional delivery services are helping spur growth for businesses in this sector, thus creating excellent opportunities for entrepreneurs looking to start a business or pivot into this industry.
So, if you want to get into e-commerce or want to boost sales by incorporating elements of e-commerce into your outfit, start by deciding what you want to sell online. Any business can sell online, even if that business doesn’t typically have physical products. As long as you can align your products or services with your digital identity, you can sell anything from branded merchandise to subscription packages for services you offer.
You should also make sure you've identified and characterized the new audience you’ll be drawing from your online platforms. Determine how this potential new customer base is different from your existing customer base and find ways to reach out to them.
The Covid-19 epidemic continues to show just how volatile the global healthcare industry is, thus reaffirming the need for investments across the industry. In addition to the substantial investments in research and development around potential Covid-19 vaccines, there are also a ton of opportunities for entrepreneurs looking to build profitable SMBs within this area.
One potentially profitable area revolves around the manufacture and distribution of medical equipment and protective gear. Last year, the global market for personal protective gear was valued at about $52.5 billion, with projections showing the market hitting the $70 billion mark over the next three years. To that end, businesses that provide personal protective equipment, gloves, face masks, and associated gear can establish strong business models during and after the epidemic.
There are also a ton of opportunities in the field of telemedicine and home health, two facets of healthcare that were already gaining popularity before the epidemic. Telehealth services let patients consult with their doctors without physically going in for an appointment, which is a huge plus against the transmission of Covid-19. Digital behavioral health startups, for instance, raked in $588 million in funding during the first half of 2020, surpassing the total investment these startups received for the whole of 2019.
3. Tech and software development
The past couple of months have been a bittersweet existence for the tech world, especially for software development startups that draw much of their finances from venture capitalists, angel and private equity investors. On one hand, revenue has dried up for enterprise-focused startups as corporate clients try to adapt to environments where most operations are carried out remotely. On the other, tech startups that are more focused on consumer-oriented products and services are seeing unprecedented success during this period, with investors looking to put their money on lean and nimble tech businesses.
One survey, for instance, found B2C startups were at least three times more likely to thrive in the face of the current crisis compared to B2B startups, especially those that serve large enterprise clients. Consequently, this opens up a whole world of opportunities for SMBs that can find technology solutions to help consumers stay comfortable and productive while trying to keep safe from the novel coronavirus. SMBs that can implement tech solutions for remote working and learning, food and grocery shopping and delivery, online fitness, and other digital-oriented offerings stand to gain immensely during and after the epidemic.
There are also many opportunities for SMBs that can help support IT infrastructures for businesses that are going digital. For instance, there’s been an upsurge in demand for technologies such as VoIP, which, according to this VoIP analysis, could help define the next era of B2C and B2B communications. Consequently, SMBs that get into this space during the current crisis can find considerable levels of success in a post-Covid-19 world.
4. Gaming and entertainment
The novel coronavirus has forced many communities across the country into a lock-down, with many people suddenly finding themselves forced to stay indoors. As a result, businesses that create and sell puzzles, board games, and small video game titles have seen an uptick in sales during the pandemic. And because the crisis is affecting whole families who find themselves at home most of the time, business has been booming for game makers and sellers who specialize in genres such as family and co-op games. There's also a huge market for video game makers who focus on video game titles for children who've been forced to stay away from school.
Plus, as physical connections become limited, singles are taking to online dating to find alternative means to interact and, in the process, creating good opportunities for SMBs looking to survive the crisis. According to one study, the business of love has been on an upward trend over the past decade, with the current crisis pushing the industry past the $6 billion mark globally in associated sales. Interestingly, this growth isn't wholly driven by dating apps, but via new platforms that let individuals mingle via chat and live-streaming apps, creating additional opportunities for SMBs to capitalize on.
Other SMB categories are also seeing success during the pandemic as Americans try to keep themselves entertained. Drive-in movie theatres are some of those peculiar businesses that continue to experience growth during this period as people shun the usually crowded movie theaters for safer drive-in theaters that encourage social distancing.
For the most part, there's no industry that hasn't been affected by the Covid-19 epidemic. For the smart entrepreneur, survival during the epidemic and success after the crisis depends on how well they can identify opportunities for pivoting and eventual growth, which involves identifying industries that are primed for growth during and after the pandemic.