How COVID-19 can help you start a global business
The Coronavirus pandemic (COVID-19) which first emerged in late 2019, before proliferating through the rest of the globe by early 2020 has changed life as we know it. Regular everyday comforts have mostly become obsolete, from dining out with friends, to walking through a mall to shop at ease. Globally, unless you are in New Zealand or a select few other locations, rolling lockdowns are still in effect, limiting not only your ability to leave the house, but the operation of many businesses, and for many people who can’t do so from home, the ability to work.
What do you you do when you have a family to feed, bills to pay and no income coming in? You pivot, get creative, and create your own income. That’s what thousands of people around the globe have successfully done. They have discovered that the ‘scary’ step into entrepreneurship isn’t as harrowing when you have no other choice, but to make it work.
COVID-19 has forced border closures globally, but has that made the world smaller and more accessible?
A positive element that can be taken away from the pandemic, is the social acceptance of virtual business as a medium for transactions. There was a time where many required an in person visit before they would make any form of commitment, whether as a buyer or seller. Now the virtual world is actually preferred, so what has this done for international business? Outside of tax, borders are meaningless when it comes to virtual exchanges, a former executive in Texas can now provide digital services to a client in Tokyo, or a former air hostess in Sydney can now sell her product tutorials in London. It’s not that this wasn’t possible pre-pandemic, it is just now seen as more acceptable. This has opened up both demand and supply channels allowing those in lockdown to build and grow a global business from the comfort of their living room.
Don’t fall into the drop shipping trap, don’t create an online e-store!
Contrary to what internet guru’s will tell you, this is NOT the best way to ‘get rich’, it is NOT passive income, and you will NOT become the next Jeff Bezos because you used, Shopify to build your own online store.
The business of drop shipping is dead! The days of being able to set up your own e-store are best left to the early 2000’s. I know this from experience, the death of drop shipping deserves its own article, so I will briefly highlight a few of the many reasons why this model no longer works.
- The market is saturated with drop shippers — Think of any product, google it, once you scroll past Amazon and e-bay you will find a plethora of e-stores competing for your money.
- Ease of access — When I started my drop shipping business in 2003, outside of getting on a plane and flying to your product’s origin, you were mostly operating on blind faith that your order was legitimate and would arrive (in my experience it was 50/50). Now not only do drop shippers have confidence in their product arriving, but their customers also have the connectivity to reach the wholesaler and cut out the middle man.
- Marketing eats margins — Drop shipping margins have always been paper thin. With the growing competitiveness of the market, marketing your store eradicates these already slim margins. In addition, with most marketing being conducted through the same platforms, Facebook, Google etc. customer acquisition costs through marketing are perpetually increasing.
- Trend riding is temporary, and a full-time job — Fidget spinners, remember those? Once a huge fad, retailing for up to $20 each at one point, the margins were [temporarily] phenomenal. That’s until the market caught wind, and the internet was flooded. If you were in the game early enough, you may have tasted success, but for many e-sellers the retail price quickly dropped to $2 for 5 or less. Those looking to make money were already probing the internet for the next big thing. While your sales may be passive, what you offer, and source is not.
- Returns can wipe you out — In a perfect world, you sell a perfect product, and your customers love you. In the real world, one where your product is handled by a third party, quality control is an element you have no control over. By the time you realize your product may be substandard, it may be too late, customers will contact you, and not your supplier. You suffer the financial and reputational loss, and over and above you have to fix it.
So what businesses work in a COVID-19 world?
What it means to hustle in the world of business hasn’t changed. You can go big, or you can go small, you can create a brand, or a product and distribute it to the world, or you can find your niche and offer it as a service. There are many ways to build a global business, but lets focus on the holy grail of business, cashflow! You want recurring revenue, and the internet allows you to create this. How? By creating products that can be virtually duplicated, resold, and recycled perpetually. For example, a yoga instructor in a pre-pandemic world may have held weekly yoga classes. An enterprising instructor may have pivoted his or her business to offer live virtual classes, which in essence may capturer a wider audience. He or she can now have students in different cities, states or countries. But an entrepreneurial instructor may think differently. Instead of holding live classes, which I agree is a great model. In order to reach an even wider base, namely those in different time zones, a series of classes can be pre-filmed and staggered into daily, weekly, or monthly programs. These can then be perpetually sold as pre-packaged products. This is far from groundbreaking, and is not new conceptually. It’s the same model used by Tae Bo and Zumba, albeit digitally. COVID-19 has now allowed for this to be more socially acceptable and the business now becomes more transactable.
The opportunities to create COVID-19 born digital businesses are endless.
- Digital Tutorial Classes
- Affiliate Marketing
- Virtual Coaching
- Database Creation
- Meal Plans & Fitness Guides
The list goes on. A personal friend of mine (Meghan), and her dog (Steve) have done just this, and they’re taking the world by storm. A dentist by trade, Meghan used the pandemic to build her online empire in an unlikely way. What started as hobby, filming her dog, has turned into a profitable side-hustle. Meghan and Steve’s following has swiftly grown to over 100K, with over 8 million likes. She’s turned this into a profitable platform for creating recurring revenue through a mixture of affiliate marketing, licensing deals, and endorsements.
COVID-19 has shocked and changed the world, the world is less accessible, (physically), and we no longer live the lives we had come accustomed to. The time for innovation is now, this is the true start of the digital era where business can be acceptably transacted entirely virtually, which while previously evident, has historically not been prevalent. We are in the midst of a mindset change, those that are enterprising will adapt, and those who are entrepreneurial will innovate. The window of opportunity is here and the potential is limitless.
Are you feeling stuck? Or are you simply ready to take your business to another level? Whether you own a small business or are already turning over 8 figures, have specific challenges to overcome, or projects to undertake, At Tawfik Group we will drive to the absolute heart of your business and utilize facts to provide clear, actionable strategies for your long-term success.
www.tawfikgroup.co.nz
