Starting a business is, in itself, a mammoth risk that can either leave you reaping the rewards, or picking up the broken pieces. It’s a competitive world, especially if you decide to present your business in a place like New York City or Chicago, especially during the current COVID era. However, where there are more people, greater and better opportunities flow.
Why Start a Business in a Big City?
The world’s economy has been stretched to its limits, and businesses have been tested on their endurance with the COVID-19 pandemic, being left to either ride out the wave, or drown. Before evaluating if it is beneficial to open a business in a big city, we must first go over what it’s like to open a business at all in current COVID times.
According to the New York Times, one-third of New York’s small businesses have run out of federal funding and have closed their doors for good since the pandemic. And, according to the National Bureau of Economic Research (NBER), the number of active small business owners in the U.S. has fallen by 3.3 million—or 22 percent—just from February to April 2020.
In order to stay afloat and avoid this, entrepreneurs have had to find innovative new ways to run their businesses as never before. Whether it’s a shift to online, a social-distancing-friendly space, or something else altogether, COVID has brought out the creative energy of entrepreneurs and put them in the limelight, while businesses lacking such innovation have been left by the wayside. The pandemic has been the driving force of creativity and has forced all businesses to re-evaluate their models—and, arguably, this is a huge step for those of us looking to start a new business.
E-commerce company JD has implemented the use of drones both to deliver parcels to avoid face-to-face contact, and to spray disinfectant to strengthen health measures.
Moriarty’s Gem Art, a family-owned jewelry business, closed its doors during the pandemic. Instead of waiting around to plan their next steps when they physically re-open, the owners decided to use this time to create online gem showcase live-streams.
The inherent necessity of fine-tuning a business model so that it can withstand a pandemic will benefit the small businesses with great potential, and weed out those with less-perseverant ideas and practices. Not only do you have a rise in innovation with the small businesses that are staying open/deciding to open during the pandemic, you also have a greater number of incredible, unemployed workers that will benefit you.
Though this is an unfortunate event, it can be beneficial if you’re looking to start a business in a big city. More innovative, available minds means that your business will have a large pool of potential team members to choose from—and even more so in the bigger cities.
If you’re looking to open a small business in these uncertain times, the Society for Human Resource Management (SHRM) has reported the responses of what small businesses are needing to do to adjust to the pandemic, and this could save yours from being unsuccessful:
- Using contactless deliveries to make services available
- Asking employees to learn new skills to support changes to the business models
- Adopting new revenue streams (i.e. converting production lines to make hand sanitizer, which is in high demand)
- Adapting new safety measures (plexiglass protection, floor markings for social distancing, etc.)
Benefits of Starting a Business in a Big City
With all the innovation rising from the pandemic, starting a business in a big city can give you greater access to resources that will help keep your business thriving, especially during COVID. Where populations are more dense, the amount of creative minds that can add value and feedback to your business model is also heightened.
Despite the pandemic, there are a variety of reasons why starting a business in a big city will benefit you greater than if you had done so in a smaller city.
- Greater Talent Pool: If you’re starting a business in New York City, for example, versus one of the smaller suburbs, you’re likely to have greater access to higher-quality employees that will not only do what you need, but be innovative enough to adapt to whatever your business needs. Finding employees—good ones, at that—is much easier when there are more people to choose from.
- Accessibility: Because a big city is better connected via highways and public transport, your clientele and employment options will range further geographically. The amount of foot traffic someone will get if starting a business in Chicago will be more than they would get if they were in a smaller town. Also, if you’re looking to travel for business meetings, bigger cities have more accessible airports.
- Less Zoning Issues: Bigger cities typically have greater commercial zoning density, meaning you will be saving money in starting a business in a big city by forgoing higher costs in zoning permit applications and zoning board meetings.
- Opportunity: Starting a business in a big city will give you more opportunities to grow your brand. The options for advertising and social media talent are not only greater, but there are more opportunities to actually get publicity. Again, with more foot traffic comes more eyes and ears to learn about your business.
Why Not Start a Business in a Big City Now?
Besides the obvious reasons with the current pandemic climate, starting a business in a big city can come with its own difficulties.
Drawbacks of Starting a Business in a Big City
- Competition: With more people comes more entrepreneurs who may be wanting to do—or are already doing—exactly what you want to. Customers or possible clientele will have the option to choose between your business and someone else’s. In a smaller city, you may be giving the only similar service in the region.
- Higher Costs: Properties and amenities are more sought-after in a big city, and they have the luxury to raise their prices rather high. Don’t be surprised if office expenses, labor/wages, living expenses, utilities, and permitting are much higher in the city center.
It’s also important to note that with a variety of services and business models, it matters little where your business is actually based. With the growing internet marketplace, you could run your business outside the city center at a fraction of the cost, but still be making the same profits.
In short, by listing the pros and cons, it’s obvious that there are more benefits to starting a business in a big city than there are challenges. However, this will totally depend on your business model and your idea.
If you’re confident in your business, your clients/customers, your team, and have a foolproof model that will withstand the toughest circumstances—even a pandemic—then there is no reason you wouldn’t thrive in a big city.
Certainly, your business will better harvest the renown it deserves in a larger city than a smaller one—and if ever you run into trouble, the opportunities and resources for aid will be more plentiful and forgiving.
Are you planning to start a business in one of the big cities? Let us know in the comments!
This article originally published on GREY Journal.