Are There Opportunities in Times of Crisis?

According to the Chinese Calendar, it is the year of the Rat. Unfortunately the start of this Chinese New Year also heralded the explosion in the number of infections of a coronavirus in China. The center of infection had been thought to be the city of Wuhan. There was much speculation that the original source of the coronavirus was a wild animal openly sold in Wuhan’s open markets. Some thought that snakes could be a likely candidate. At this point in time, the number of infections are climbing. Though the number of deaths is still small, this too is rising. The coronavirus has prompted the Chinese government to lock down Wuhan and the neighboring areas.

This post is not so much about the coronavirus but more on opportunities for entrepreneurs arising from a crisis like this. In times of crisis, the opportunities could come in many forms. Of course, opportunities all come with great risk. However this post will not talk about investing or speculating in the stock market or real estate. It will discuss areas in which entrepreneurs tend to do as part and parcel of their businesses.

In many places, concerns about the spread of the coronoavirus could have affected rentals adversely. Thus the rent for a choice location could be had for much less than during normal times. However timing is crucial. Too early or too late and the rent could still be relatively high. The best would be at the peak of the crisis which would coincide with the bottoming of the rental rate. However nobody knows when its too early or late or the peak of the crisis until its over. Nevertheless, it is important for entrepreneurs to start to look around when the crisis strikes.

Another opportunity for entrepreneurs would be in the sourcing of unwanted goods which arises as a result of the crisis. The unwanted or surplus goods could have been the result of cancelled orders. Thus one could get a good discount on the price for these goods.

During times of crisis, many firms struggle to make ends meet. Therefore there are opportunities to purchase, say, the entire contents of a restaurant, lock stock and barrel for much less than normal from the owner or owners liquidating. In the industrial sector, one could perhaps purchase usually expensive machinery and/or equipment for significantly lower prices. The same goes for office equipment like copiers, printers, personal computers and servers. Many of these goods are sold by auction by creditors. Thus it pays to keep a lookout for such auctions. With many things going online, auctions too have moved to the internet for faster and more cost effective transactions.

Another opportunity for entrepreneurs during periods of uncertainty lies in the ability to employ good people far easier and at lower salaries. With redundancies rising in firms and vacancies declining, workers are hard pressed to obtain gainful employment.

Having said all that, entrepreneurs should also note that nobody knows how long the coronavirus problem would last. It could last for years or only a month or two. The effects could be brutal in terms of economic decline or relatively mild. One could obtain a choice location for seemingly attractive rental rates only to see the crisis drag on, thereby impacting business. Whatever the duration and effect, the important thing for entrepreneurs is to stay nimble and seize opportunities when they arise.

In conclusion, the crisis that the coronavirus is creating could spell opportunities for entrepreneurs though at great risk.