Is a Pandemic the Right Time to Start a Business? It Just Might Be - The New York Times

Is a Pandemic the Right Time to Start a Business? It Just Might Be - The New York Times


Is a Pandemic the Right Time to Start a Business? It Just Might Be - The New York Times

Posted: 24 May 2020 04:18 PM PDT

In March, as small businesses across the country were shutting down amid the spreading coronavirus pandemic, Shanel Fields was about to open one up.

For Ms. Fields, the timing couldn't have been better. Her company, MD Ally, allows 911 dispatchers and other responders to route nonemergency calls and patients to virtual doctors, to help local governments improve their emergency response systems.

"Something that a lot of people don't know is that more than half of calls that go to 911 are nonemergency," said Ms. Fields, whose father's experiences as a volunteer emergency medical worker sparked the idea. "Those nonemergency calls overcrowd E.R.s and delay ambulances."

But she also recognizes how crazy it sounds to start a business during an economic collapse. She knows that while she's hiring, many small businesses are worrying about whether they'll ever reopen.

She's not alone: New businesses are forming despite the pandemic, though at a significantly slower rate than before.

There have been more than 500,000 applications for an employer identification number since mid-March, according to the Census Bureau, although that is down nearly 20 percent from a year ago. Between mid-March and mid-April, the Small Business Administration issued nearly 300 start-up loans worth about $153 million, a 36 percent drop from year earlier. Stripe, the credit card processing firm, said it had handled more than $1 billion in sales for businesses that started on the platform during that time.

Past downturns produced some high-profile American companies: Airbnb, Disney, General Motors, Hewlett-Packard, Microsoft, Slack, Uber and Venmo, to name a few.

"Downturns or challenging times are seen as good times to start a business for two reasons," said Rashmi Menon, entrepreneur in residence at the University of Michigan's Zell Lurie Institute for Entrepreneurial Studies. "One is, there is less competition for resources. The second reason is that whatever changes we face, positive or negative, bring up new customer needs. And customer needs are at the core of any business."

For Ms. Fields, opening now meant greater access to top talent. She hired her fourth employee and said more than 200 qualified applicants had submitted résumés. And being in the health care sector during a pandemic has raised her profile with funders and governments: MD Ally, which is based in Philadelphia, recently signed its first customer and closed its first round of investment worth $1 million.

For others, the timing can mean low interest rates for borrowing start-up capital, cheaper equipment as businesses sell off inventory or lower lease rates as landlords scramble to fill empty spaces.

"I'm already seeing a huge uptick in requests for kitchen leases and subleases to be used for carryout kitchens or production spaces," said Jenn Smith, a commercial real estate agent in Detroit.

In the best of times, 20 percent of new businesses don't survive their first year, according to federal statistics; economic headwinds present greater challenges. A restaurant or bookstore opening on Main Street, however, faces very different risks from those of a new tech firm whose employees can work from home and whose customers don't need to gather.

"There are going to be industries that are winners, and others that are going to be losers," said David Brown, who co-founded the start-up accelerator Techstars during the 2008 recession. "I probably wouldn't want to be in a business right now that caters to business travelers, but I'd love to be in a business that helps enable telemedicine."

Determining what customers need now, rather than before the pandemic, is crucial. Ms. Menon and Mr. Brown see opportunity in offering solutions to the challenges that people now face: educating their children, working from home, managing supply chains, getting a haircut or the house cleaned, seeing doctors and therapists, entertaining themselves. Even new restaurants might be successful if they consider the future of customer service rather than recreate old systems.

"If you can find innovative ways for people to feed themselves right now, that might make sense," Ms. Menon said. "You just have to address a need."

Figuring out how to open the food hall of the future is the task facing Maarten Jacobs, the director of community prosperity at the Allyn Family Foundation, a regional philanthropic organization in Syracuse, N.Y.

Image
Credit...Mustafa Hussain for The New York Times

That's not a role Mr. Jacobs expected, considering his background is in community and economic development. He is overseeing the foundation's investment in a new four-story, 80,000-square-foot building designed to be a community gathering space and incubator for the city's small food entrepreneurs. A mix of apartments and nonprofit offices is planned for the upper floors, but the heart of the project is Salt City Market, which will feature food stalls run by women and entrepreneurs of color, a coffee shop and a cooperative grocery store.

The project is scheduled to open in November, so Mr. Jacobs is focused on finding the safest way to open a 24,000-square-foot market even as the world is questioning when — and how — people will want to gather again.

  • Frequently Asked Questions and Advice

    Updated June 2, 2020

    • Will protests set off a second viral wave of coronavirus?

      Mass protests against police brutality that have brought thousands of people onto the streets in cities across America are raising the specter of new coronavirus outbreaks, prompting political leaders, physicians and public health experts to warn that the crowds could cause a surge in cases. While many political leaders affirmed the right of protesters to express themselves, they urged the demonstrators to wear face masks and maintain social distancing, both to protect themselves and to prevent further community spread of the virus. Some infectious disease experts were reassured by the fact that the protests were held outdoors, saying the open air settings could mitigate the risk of transmission.

    • How do we start exercising again without hurting ourselves after months of lockdown?

      Exercise researchers and physicians have some blunt advice for those of us aiming to return to regular exercise now: Start slowly and then rev up your workouts, also slowly. American adults tended to be about 12 percent less active after the stay-at-home mandates began in March than they were in January. But there are steps you can take to ease your way back into regular exercise safely. First, "start at no more than 50 percent of the exercise you were doing before Covid," says Dr. Monica Rho, the chief of musculoskeletal medicine at the Shirley Ryan AbilityLab in Chicago. Thread in some preparatory squats, too, she advises. "When you haven't been exercising, you lose muscle mass." Expect some muscle twinges after these preliminary, post-lockdown sessions, especially a day or two later. But sudden or increasing pain during exercise is a clarion call to stop and return home.

    • My state is reopening. Is it safe to go out?

      States are reopening bit by bit. This means that more public spaces are available for use and more and more businesses are being allowed to open again. The federal government is largely leaving the decision up to states, and some state leaders are leaving the decision up to local authorities. Even if you aren't being told to stay at home, it's still a good idea to limit trips outside and your interaction with other people.

    • What's the risk of catching coronavirus from a surface?

      Touching contaminated objects and then infecting ourselves with the germs is not typically how the virus spreads. But it can happen. A number of studies of flu, rhinovirus, coronavirus and other microbes have shown that respiratory illnesses, including the new coronavirus, can spread by touching contaminated surfaces, particularly in places like day care centers, offices and hospitals. But a long chain of events has to happen for the disease to spread that way. The best way to protect yourself from coronavirus — whether it's surface transmission or close human contact — is still social distancing, washing your hands, not touching your face and wearing masks.

    • What are the symptoms of coronavirus?

      Common symptoms include fever, a dry cough, fatigue and difficulty breathing or shortness of breath. Some of these symptoms overlap with those of the flu, making detection difficult, but runny noses and stuffy sinuses are less common. The C.D.C. has also added chills, muscle pain, sore throat, headache and a new loss of the sense of taste or smell as symptoms to look out for. Most people fall ill five to seven days after exposure, but symptoms may appear in as few as two days or as many as 14 days.

    • How can I protect myself while flying?

      If air travel is unavoidable, there are some steps you can take to protect yourself. Most important: Wash your hands often, and stop touching your face. If possible, choose a window seat. A study from Emory University found that during flu season, the safest place to sit on a plane is by a window, as people sitting in window seats had less contact with potentially sick people. Disinfect hard surfaces. When you get to your seat and your hands are clean, use disinfecting wipes to clean the hard surfaces at your seat like the head and arm rest, the seatbelt buckle, the remote, screen, seat back pocket and the tray table. If the seat is hard and nonporous or leather or pleather, you can wipe that down, too. (Using wipes on upholstered seats could lead to a wet seat and spreading of germs rather than killing them.)

    • How many people have lost their jobs due to coronavirus in the U.S.?

      More than 40 million people — the equivalent of 1 in 4 U.S. workers — have filed for unemployment benefits since the pandemic took hold. One in five who were working in February reported losing a job or being furloughed in March or the beginning of April, data from a Federal Reserve survey released on May 14 showed, and that pain was highly concentrated among low earners. Fully 39 percent of former workers living in a household earning $40,000 or less lost work, compared with 13 percent in those making more than $100,000, a Fed official said.

    • Should I wear a mask?

      The C.D.C. has recommended that all Americans wear cloth masks if they go out in public. This is a shift in federal guidance reflecting new concerns that the coronavirus is being spread by infected people who have no symptoms. Until now, the C.D.C., like the W.H.O., has advised that ordinary people don't need to wear masks unless they are sick and coughing. Part of the reason was to preserve medical-grade masks for health care workers who desperately need them at a time when they are in continuously short supply. Masks don't replace hand washing and social distancing.

    • What should I do if I feel sick?

      If you've been exposed to the coronavirus or think you have, and have a fever or symptoms like a cough or difficulty breathing, call a doctor. They should give you advice on whether you should be tested, how to get tested, and how to seek medical treatment without potentially infecting or exposing others.


"It keeps me up at night, that's for sure," Mr. Jacobs said.

He's looking at global trends on how restaurants are opening and the safety precautions being put in place to see what he might do in Syracuse this fall. He's considering foot-operated doors, mobile sanitation stations and a new furniture concept.

"In the past, we just wanted to make sure furniture looked cool; now it has to look cool and be built like a tank and stand up to robust cleaning," he said.

But his biggest worry is the entrepreneurs. He doesn't want to set them up for failure.

The foundation supported Salt City Market as a way to foster entrepreneurs who might not have the resources to open their own restaurant. It hosted a community competition to identify eight small food businesses for the market. The winners received months of technical training on everything from marketing to inventory management, as well as the promise of a commercial kitchen stall with all the equipment they need. Chefs are responsible for their own signage and small goods, like plates and napkins, as well as a start-up investment of $30,000.

"We wanted a loan that if everything goes sideways, they aren't crippled," Mr. Jacobs said.

But everything has gone sideways. So Mr. Jacobs wants to open in a way that ensures they can succeed. "We don't want to jeopardize them," he said.

So far, all eight chefs plan to move forward. But several face the hard choice of leaving their day jobs to pursue their dreams, which may have seemed romantic in normal times but is terrifying in a severe downturn.

Chef Ngoc Huynh said she was scared but still excited to open her Vietnamese kitchen in the market.

Credit...Mustafa Hussain for The New York Times

"I like to be optimistic and hope for the best," Ms. Huynh said.

She knows the challenges of restaurant life from watching her mother and aunt run a small food and catering business while working other full-time jobs. But Ms. Huynh is reassured by the fact that she's not doing this alone. She and the other chefs are receiving technical support from the foundation and collaborating on ways to open a restaurant in a socially distant world. The group is considering new menus and hiring delivery drivers to serve all the stalls.

"We're thinking about this together," Ms. Huynh said. "That's the beauty of it. We're all competitors, but there is a network of support."

You want to start a business now? Ms. Menon suggests you ask yourself these five questions first.

  • Have I identified a new need that customers have as a result of the current crisis?

  • Can I serve this need in a way that is substantially better than the current alternatives?

  • Am I qualified to solve this customer problem?

  • If I don't have the experience, can I hire others or find a co-founder to help me?

  • Do I have access to funding that can tide me over until my business is profitable?

How Small Businesses Can Start Selling on Walmart.com - Business 2 Community

Posted: 02 Jun 2020 06:07 AM PDT

With the effects of coronavirus on retail across the globe, more ecommerce brands are looking to make up lost revenue by expanding into new channels. And while many are flocking to giant marketplaces like Amazon or eBay, another often-overlooked channel is just as lucrative with a fraction of the competition: Walmart Marketplace (or simply Walmart.com).

By the numbers, Walmart is the largest retailer in the world, with $517 billion in global revenue, twice as much as Amazon. But speaking strictly of online retail, they're much more of a contender than reigning champion. However, over the last few years, they've been investing more time and resources in their ecommerce presence, hoping to unseat Amazon as leader, or at least close the gap.

Their efforts have been bearing fruit, judging by their performance in Q4 2019: Walmart saw a 51% jump in growth of online sales, compared to Amazon's 31%. And while they still have a long way to go before Bezos starts losing sleep, those figures are optimistic enough for online retailers to consider it as a viable, if not opportune, option for expansion.

Online customer spending YOY NovemberWalmart.com leads in year-over-year growth for the first two weeks of November 2019, the start of the holiday shopping season. (Source)

But breaking into the Walmart Marketplace isn't easy. For one thing, you have to apply and be approved. And even if you pass that first hurdle, you still have to understand the best practices of this particular marketplace if you really want to thrive there.

Here, we explain everything small businesses and online retailers need to know about breaking into Walmart Marketplace: how to ace your application and what to do once you're accepted.

How to apply to Walmart Marketplace

The actual application process is pretty straight-forward: you fill out the application online here. All are welcome to apply, including dropshippers.

The application is fairly painless and takes only around 15 minutes. To help you prepare, here's a list of official documents you'll need:

  • U.S. Business Tax ID (this is a requirement — a social security number is not enough)
  • W-9 or W-8 form
  • Employer Identification Number (EIN) Verification Letter from the Department of Treasury. If you don't already have an EIN, you can apply for one online here.
  • U.S. business address
  • The integration method you plan to use to add your products (this Walmart infographic explains all your options)
  • The total amount of SKUs you want to sell
  • Verified UPCs for your products
  • Product information, including prices and categories

From there, it's just a matter of completing the right forms — although, be aware that you cannot change your responses after your application is submitted. After submitting, it takes an average of 2 weeks to hear a response.

Walmart Marketplace applicationThe Walmart Marketplace application (Source)

Expert tips to get approved on Walmart Marketplace

Submitting an application is one thing, but actually getting accepted is another. Here are some reliable tips to help impress Walmart's reviewers.

Low prices

Offering the best prices is one of Walmart's top priorities, so they'll only accept sellers who can uphold, not hinder, this goal. Make sure your prices are competitive with what's currently offered on Walmart.com, as well as all other online retail channels. That means doing your research beforehand and adjusting your prices accordingly.

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Product assortment

Naturally, Walmart wants to offer different product types to satisfy any number of customer demands. Vendors selling unique, new, or hard-to-find goods are more appealing than those selling the same products already offered. Just make sure you're not selling any items on their Prohibited Products List.

Customer service

Walmart cares about the reputation of your brand as much as your products. They'll look into your past customer service, including any public ratings or reviews you have. Make sure you've (amicably) settled all disputes and taken measures to optimize your ratings.

Almost as bad as poor ratings are no ratings at all. As this is a typical setback for small online retailers, we recommend using an email outreach strategy to elicit more — and better — customer reviews.

Reliable fulfillment

Walmart will also look into your fulfillment history for grievances like late deliveries. As a Walmart seller, you'll represent their brand, so make sure your fulfillment record is impressive. Unlike Amazon, Walmart does not offer fulfillment services, so you'll have to handle this area yourself, or use an unaffiliated third-party provider.

Best ways to compete against other Walmart sellers

Once you've received confirmation that you've been accepted — congratulations! But before you can start selling, you still have to finish your account registration, which includes:

  • Bank account details
  • Display name
  • Registering a Payoneer account (Payoneer handles all Walmart transactions)
  • Shipping rates — you'll also choose whether the cost of shipping is based on "the price of the total order (tiers)" or "item weight or the number of items per order."
  • Shipping methods and regions.

Once you're ready to start selling on Walmart Marketplace, you'll populate your product pages and launch your marketing campaigns. But like any other online sales channel, some approaches work better than others. Here are some tips for beginners to help you get situated in your new market.

Descriptive product titles

Walmart Marketplace allows up to 200 characters for their product titles, so make good use of them all. Add descriptors like brand names and variations such as color or sizes — this not only makes it easy for customers to find what they're looking for, it's very beneficial to SEO as well. If you sell on other channels, using the same titles can help you maintain brand consistency.

Group variations on the same page

If your product has different variations, it's best to list them all under the same product page. This streamlines the shopping experience and makes it easier for the shopper, which in turn increases their chances of completing a sale. In other words, the fewer pages they have to visit before finding what they want, the better.

Just be sure to include all the variations in the product title for searchability. So, if you're selling sneakers that come in different colors, you might write it as "Black/White/Blue" in the title.

Prioritize the buy box

If the same product is sold by multiple sellers, the listing page contains all of them. However, only one can claim the "Buy Box" — when the shopper clicks "Add to Cart," the Buy Box winner is the one whose product gets added to the cart.

Winning the Buy Box is a huge advantage, considering how many people click Add to Cart without much comparison shopping. One of the best strategies for success in the Walmart Marketplace is to consistently aim for the Buy Box.

How, exactly? A lot of it has to do with your reputation. Walmart gives priority to sellers who:

  • Consistently deliver on time
  • Have exemplary reviews and ratings
  • Never run out of stock
  • Offer free shipping

Regardless, the most important factor in winning the Buy Box is a low price. What more would you expect from the company that popularized the "Everyday Low Price" model? That's why, if you're selling on Walmart.com, it's crucial to keep tabs on your competitor's pricing. Winning the Buy Box is an ongoing endeavor, so keep your eyes peeled for competitors attempting to undercut you.

Get started with Walmart Marketplace today

Before you hastily fill out your Walmart Marketplace application, it's best to be prepared. Here's a quick checklist to make sure you're ready before applying:

  • Do you have all the necessary business data, including an EIN, U.S. Business Tax ID, and business address?
  • Do you have UPCs for all the products you'd like to sell on Walmart?
  • Do you know the best categories for the products you'd like to sell on Walmart? (Each channel has slightly different methods of categorizing products, so double-check on Walmart.com to make sure you're using the best ones.)
  • Are your public seller ratings adequate and all disputes handled?
  • Have you researched your competition on Walmart.com to make sure your prices are optimized?
  • Did you double-check the Prohibited Products List to make sure all your items are acceptable?

With the right preparation, your onboarding process with Walmart Marketplace will be a breeze! If past trends are any indication, now is the right time to break into Walmart.com — it's not yet the size of Amazon, but continues to grow bigger every day. The sooner you become a part of it, the better!
Want more detailed advice about selling on Walmart? Watch our free webinar on How to Start Selling on Walmart now!


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