Despite all the challenges we faced in 2020, record numbers of new businesses were launched. In the midst of the Covid-19 pandemic, entrepreneurially minded individuals seized the moment to turn their business ideas into reality – with over 85,000 new companies registered last year. However, given the dramatic changes in the world, what trends can we expect in 2021 and what are the best business ideas in 2021 to capitalise on this?
Why start a business in 2021?
You’d be forgiven for thinking with all the upheaval and uncertainty in the world, whether starting or running a business right now is a particularly good idea.
Whilst undoubtedly the pandemic has increased economic hardship and caused huge disruption – in some cases, shutting down entire industries – it’s also opened the door to lots of business opportunities.
- Firstly, on a practical level, many people have more time on their hands than before. That’s extra time to research and finely-tune your business idea and business plan.
- Secondly, as we’ve seen during previous economic downturns, wants and needs change – leaving gaps that need to be fulfilled.
- Thirdly, the pandemic has catapulted us further forward in our adoption of digital technology as a society. The most telling example is the mass exodus from city centres to home working. None of this would have been possible without widespread adoption of remote-working software, video conferencing platforms, and online collaboration tools. In 2021 we’re a lot more tech-savvy than we were at the start of 2020 – and that is an exciting opportunity for entrepreneurs.
Let’s have a look at some of the key trends we can expect to see in 2021.
E-commerce sales have been growing year on year but 2020 saw sales boom to record levels. According to Shopify: “At the height of the COVID-19 pandemic, 10 years of ecommerce growth happened in just 90 days.” It also reports that nearly 150 million people shopped online for the first time during the pandemic.
Whilst necessity has forced us to shop online for items we’d normally purchase in stores, there’s no doubt this is part of a wider trend. Online is becoming the preferred purchasing point for many people and the pandemic has bought yet more people into the fold.
The question for businesses and entrepreneurs is how to fashion a niche in this competitive space – not just with other independents but with traditional brands who are ramping up their online presence, and, of course, the likes of Amazon.
At some point in the year, we all hope to see the return of live events. It doesn’t take an expert to predict the demand will be huge. During these cold winter months under lockdown, many people will be dreaming of once again going to gigs, festivals and sports events.
With the industry taking a battering in 2020, however, the recovery is not going to be straight forward. Experts predict the pandemic will force the industry and its various sectors to be reshaped. Many venues, promoters and, even, artists may not make it to the other side. There are likely to be gaps that will need to be filled as the industry recovers.
One positive outcome to take into 2021 is the demand for online events. Whilst people are undoubtedly craving live experiences, it’s quite possible we’ll see online events become part of the events landscape even when things return to normal. Bands live streaming rehearsals, concerts available to watch online, and theatre companies putting on interactive performances – this could well be the future. And then there’s the upsurge in digital conferences, webinars and online training, opening people’s eyes to the possibilities of remote learning and networking.
For organisers, online events are a great opportunity to create additional revenue streams – with less logistical complications and better profit margins.
Another industry that took a battering in 2020. According to the UN World Tourism Organisation, earnings from international tourism might be down 80% compared to 2019. Hope that things would pick up in the final quarter of the year were scuppered by the second wave. That’s meant we’ve gone into 2021 with many countries going back into lockdown and reimplementing travel restrictions.
It remains to be seen how things will pick up as we go into Spring, particularly as vaccine programmes in the Western world reach more of the population. That prompts hope that borders will reopen and international travel will resume – perhaps to a greater extent than 2020 but not to pre-pandemic levels. One possibility is that proof of vaccine will be a requirement to travel. Expect to see ‘staycations’ in the UK continue to be popular.
Just like the events industry, though, the demand for travel – and escape from our lockdown homes – after the last 12 months will be massive. Many view holidays not as a luxury but as an essential expenditure and, with plans scuppered by the pandemic, people will be keen to get away in 2021.
With the Christmas Eve trade deal averting the potential disruption of a no-deal scenario, we’re still coming to terms with the UK’s new trading relationship with the EU. It’s fair to say businesses will be pleased that they now have some concrete detail from which to plan.
However, the fallout from the trade deal will be seen over the coming months, years and decades. The headline takeaway is that trade between the UK and the EU will remain tariff-free. The crucial difference, though, will be the need to submit customs paperwork if your business imports goods in and out of the European Economic Area (EEA).
In the short term, the demand for Brexit support in this area is likely to be significant. Many businesses will not have the necessary expertise or resource to handle customs paperwork. Customs agents and trade consultants are likely to be sought after to facilitate and advise on this work.
There are many questions about the long-term implications. Thinking positively…
- Will supply-chains move closer to home?
- Will we see a boom in UK producers?
- What support will the government provide to support this?
- Will we see more exporters looking to global markets?
Of course, on the other hand, there are worries. Will UK goods still be attractive to EU nations given the added paperwork? Will this lead to costs passed on to businesses?
As we’ve often said with Brexit, there are still many unknowns – just somewhat less than this time last year.
Commentators have noted that one of the most notable upshots of the pandemic was the reduction in global carbon emissions. With less people travelling domestically and abroad, emission levels dropped by a record 7% in 2020. Post-pandemic, levels are likely to increase again and governments will have to work together to tackle the mounting climate crisis.
The 2021 UN Climate Change Conference, due to be held in Glasgow, is set to be a critical moment. We can expect the incoming Biden administration, with its talk of a Green New Deal, to take a more active stance on climate issues. This is partly why shares in Elon Musk’s Tesla have soared, and seen him overtake Jeff Bezos as the richest man in the world.
The UK has the ambitious 2030 target of cutting CO2 levels by 68% compared to 1990 levels. One of the most eye-catching parts of the government’s green plan is to stop the sale of wholly petrol and diesel powered vehicles by 2030. (Again, another reason why Tesla shares are on the rise)
We’re going to see lots of movement in the climate space in 2021 and beyond – and savvy business owners and entrepreneurs are already seeing huge opportunities.