COVID-19 has changed the business world dramatically. A lot of entrepreneurs trying to start their business ventures normally start out with a solid amount of debt. It’s not uncommon or entirely bad—it does take a lot of money to turn your ideas into reality, but the current pandemic we are all currently forced to face might just be teaching us that this should no longer be the norm.
Repaying capital debts take a hearty lump out of a business’ monthly revenue. So good sales and profit growth are definitely out of the window until that debt is completely paid off. Or at least until your business blows up on social media for the 15-second of fame, but sometimes, even that won’t be good enough to completely lift a business out of debt. And that can really take a toll on a business’ momentum.
The co-founder of the PopUp Business School, Alan Donegan, is trying to defy the mindset that aspiring business owners must be able to come up with capital, specifically debt capital, in order to get their visions started. Alan is suggesting that starting a business successfully can be done without having to borrow money that you do not already have.
Because of the coronavirus and the government-mandated social distancing rules all over the country and the world, every business owner is facing tons of unique and complicated operational challenges. Even Alan’s business of trying to help people build their business is suffering. He and his team are still trying to send out the debt-free business mentality to young entrepreneurs through online seminars and video conferences. But at a time like this, wherein economic and financial stability is questionable, should he really be encouraging people to get started with their business ideas? And is he right to discourage debt-free capitals?
Fear of Debt
Alan has a strong aversion financial debt as he grew up in a family that was trying to be part of the business world, but suddenly found itself faced with the consequences of bankruptcy.
So when he was old enough to start his very own business, he was not impressed with the advice that the government-sponsored Business Link service gave him which was to, “Put a business plan together and borrow money to get started.”
Believing that there is a better way to get started, he met up with one of the executives leading the Business Link program and discussed his ideas. Eventually, they agreed to establish the PopUp Business School with the goal of changing the way entrepreneurship was taught in mind. So how did they do it?
Finding the Right Audience
Alan believed that the PopUp Business School is meant for people that most business-coaching organizations ignore. Therefore, the School’s events were made free to participants by having organizations like local government and housing associations pay for them instead. This made it possible for casual housing residents and other people to have access to entrepreneurship coaching that they would never normally even hear about.
According to Alan, their “no debt” campaign echoed with their chosen audience. An average person would obviously be discouraged from putting up a business if it comes with debt.
The prime example proving that debt-free businesses are possible is that of two alumni of two PopUp Business School alumni who were able to set up an escape room business free if debt. Instead of going through the traditional way of renting a place and putting up shop there, these debt-free entrepreneurs were able to find a hotel with unused space and agreed on a rent-free deal for a limited time, giving their escape room business time to establish its clientele and start getting some profit. Alan says that it’s an approach that can be used in even better circumstances.
Coronavirus and the Economy
The PopUp Business School is on the move to design a pandemic survival guide, but they are also trying their best to survive all the canceled orders and seminars.
Surprisingly, Alan is saying that this is not the worst time to get started with your business.
For one, crisis, whether it’s a pandemic or a stock market drop, always brings about new opportunities. With almost everyone having extra time in their hands, it may just be the best time to get in touch with possible business partners or clients who are also thinking about ways to come up with future acquisitions. It is the best time to spend hours on the phone! And there’s no problem with making it worthwhile, right? Instead of talking about the latest viral hack with your college best friend on Facetime, maybe you should start working on that business idea you’ve always talked about.
While these are certainly challenging times for every business, grabbing opportunities without putting your financial stability at risk seems like a fitting picture with COVID-19 in the background.
This video may spark some ideas for all aspiring entrepreneurs for business ideas and opportunities post COVID-19.