At the risk of expressing the obvious, COVID has been bad. But what’s less apparent has been the positive effects it has had. The boom of online platforms, mobile wallets, and streamlining of processes for both the public and private sectors, are part of the silver lining. I’d say the increase in small businesses is another positive consequence of the pandemic.
Whether born out of job loss or not, there is pure economic gain from a rise in business owners. Should you join the march?
What is entrepreneurship?
Entrepreneurship has traditionally been tied to creating disruptive technology and solving big problems. But loosely speaking, this is anyone creating a business for profit. In short, it’s a business owner.
Running a business is at odds with what society teaches us. For the most part, we’re taught to go to school, get a job, retire when we’re 60 or so. Not a lot of people see entrepreneurship as a first choice. It certainly wasn’t mine. But now I wouldn’t have had it any other way.
Admittedly anecdotal here, but I’ve seen an increase in small business owners since the pandemic. Long lines at DTI, ukay-ukay stores popping up along our local roads, etc. This was confusing to me at first. Aren’t businesses supposed to suffer during a downturn? But I guess that shouldn’t be a surprise, right? I mean, what do most people do when they’re laid off from work in an economy that’s not looking to hire?
The economic impact of small businesses
Although no industry is completely recession-proof, some businesses actually do well even in a downturn. These include consumer staples (i.e., household items like toilet papers and laundry detergents), grocery goods (particularly alcohol), and bargain stores.
Can this be the reason for the upsurge in sari-sari stores around Palawan? Combined with the loss of jobs, that’s probably a reasonable presumption.
In any case, an economy with lots of small businesses is actually a good thing. There’s a reason MSMEs are called the lifeblood of the economy. They create jobs, increase consumer spending, and improve the economy. So in a way, starting a profitable business, after losing your job, can be one of the best things to happen to you.
How will you respond?
Should you start a business?
But of course, it’s not all rainbows and butterflies. In contrast to having a job, there is greater risk and return when running a business. When you have a job, your income is relatively stable. (Though as we’ve seen with COVID, a lot of jobs aren’t even secure anyway.)
Running a business is riskier because of the possibility of losing the money you invested. That said, the upside potential of a business is so much higher.
Which one’s the better choice? I’m not about to say one is better than the other because there are certainly merits to both. And in the end, it comes down to preference.
Can you handle and tolerate the risks in hopes of greater returns?
Success stories from disasters
The way I see it, now’s the right time to at least try. If it doesn’t pan out, there’s always the employment option. But with high unemployment rates, and with select goods resilient to recessions, you have the opportunity to run something beyond yourself and your household.
Although there’s ultimately no right nor wrong path, what’s clear is human resilience. People will find a way to survive — whether that’s with a new job or through a small business.
Palawan News welcomes its new columnist Dan Dima-ala. Dan is a two-time real estate board exam top-notcher, real estate investor, entrepreneur, and former corporate finance professional. He has a degree in economics & finance and is a certified Accounting & Finance Mentor for GoNegosyo. As a financial freedom advocate, Dan shares his unique insights at freedom locker PH.