Spending 9 to 5 in the office doing the same monotonous tasks maybe a little boring for some people to continue with it. It seems to be a common acknowledgment among many people today, which is why new startups are surfacing each day.
Along with this approach, several other factors have promoted the rise of startups in 2021. According to Oberlo, entrepreneurs registered 4.25 million new businesses in the year 2020. That’s a 24% increase from 2019, when 3.5 million businesses were registered. If we look closely, certain market forces propelled startups. The wake of the COVID pandemic is certainly among the biggest contributor.
According to American Progress, a whopping 4.5 million people permanently lost their job due to the pandemic. The market is further expected to face a shortage of 75 million jobs in 2021 and 23 million in the coming year. Consequently, more and more people are inclined towards startups to meet their needs. Apart from this, there are factors which this article highlights. It mentions 5 things that contributed to the rise of startups in 2021.
A Large Number Of Business Graduates
According to Education Data Org, around 2 million students are expected to graduate with a bachelor’s degree. A huge majority of these graduates are from the business domain, adding more force to the business field. Moreover, today’s trend of conveniently accessible online education like AACSB online MBA no GMAT has provided the ease of remote learning. A large number of people are opting for these programs, resulting in more business graduates. This, in turn, produces more entrepreneurial minds.
Unfortunately, the COVID-ridden economy is not producing a satisfactory enough number of job opportunities. Therefore, more graduates are moving towards startups. Moreover, the market dynamics in the aftermath of the pandemic are noticed to support startups.
An Eco-Friendly Business Inclination
With the evolving time and changing perception, people prefer eco-friendly and greener business operations. Most traditional businesses do not possess these unique selling attributes of this domain. Therefore, it creates a window for other startups to operate on these lines. COVID pandemic has also reiterated the importance of being environmentally friendly. During the lockdowns, people had enough time to think about the consequences of pollution and other environmental harms. Now, they are more inclined toward businesses that promote eco-friendliness, including new businesses focusing on greener products or services.
Void In The Market
According to a survey by PNAS, nearly 43% of the global businesses were temporarily closed due to the COVID pandemic. Most of them are returning to normal but still not in their full flair. Therefore, many businesses have lost their customer base. A large number of companies have completely gone out of the market under heavy financial burden. And so, the entire scenario has created a void in the market.
This gap provides a window to new startups. Otherwise, the top players would not let the startups gain traction. Now, when they are struggling with regaining their market glory, it provides a chance to startups. Moreover, certain categories, specially from the food and courier industry, are new avenues for entrepreneurs to explore. More and more people now prefer online orders, so the courier industry is on the boom.
The High Rise Of E-Commerce
According to Shopify, the global e-commerce market will reach an unbelievable $4.9 trillion in 2021. It is further expected to grow at a compound annual growth rate (CAGR) of 16% by 2026. The sheer rise of e-commerce provided entrepreneurs with new marketing and sales channels. Previously, the biggest hurdle to launch a business was to market it through a proper channel. Today, e-commerce platforms like eBay, Amazon, and Alibaba have resolved these issues.
According to a study by Forbes, e-commerce has shown equivalent growth of around 4-5 years within just a year from 2019 to 2020. The concept of ‘Buy Online, Pick up In-Store (BOPIS)’ grew by an astonishing 195%. Such a huge customer preference for online shopping coupled with the ease of business operations due to e-commerce promoted more startups in 2021.
More Funding Options
Around 37% of startups fail because they cannot find ample funding. In the contemporary business environment, that’s not the case. Now, there are more funding options than ever before. People have realized the high rise of startups and their potential. Therefore, more investors are finding interest in startups than traditional businesses.
Increased options like crowdfunding, bootstrapping, angel investors, and small business loans are making initial capital requirements easier for entrepreneurs. The investment amounts vary from $75,000 to $100,000.
Startups are increasing, and we can only expect them to rise even more. Managing a startup is not easy, though. It is a challenging path, but that’s actually the charm entrepreneurs look for. So, streamline your interests and dive into the pool of limitless possibilities.