A difficult time ahead is not only bad

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21 November 2022

Business startups can find it difficult to get off the ground. The good ideas may be there, maybe even the capital for that first launch, but there can still be a long way to go to find the right target group and market.

Another element has now been added, as the market today is completely unpredictable. What was best practice just a few months ago can be completely outdated today.

At Dansk Iværksætter Forening (Danish Entrepreneurs), they are used to advising and discussing ideas with new business startups. They have 20,000 members and represent a wide range of sectors. Half of their activities are member-oriented, with the other half politically-oriented towards creating better conditions for entrepreneurs in Denmark. The core undertaking of Danish Entrepreneurs is not to give one-to-one advice to startups and entrepreneurs. It's more of an industry body that fights for better conditions for entrepreneurs, and creating a range of activities through a strong, event-oriented approach to develop and advance the industry.

Right now, Danish Entrepreneurs are concerned about the immediate future from an entrepreneurial perspective. The number of Danish startups peaked just before the financial crisis hit. The same level has never been reached since, and Peter Joakim Kofler, Chair of Danish Entrepreneurs, fears what the current crisis will mean for entrepreneurs in Denmark. The number of startups is already 20 per cent lower than at the same time last year.

“What I fear the most is the willingness of the end-user to pay. If you’re a municipality that needs to build a new institution, you choose cheap furniture that's neither ergonomically designed nor FSC-certified. We’ll fall back on the conventional approach and away from the sustainable one, making it difficult for entrepreneurs, who can rarely win when it comes down to price,” says Kofler.

According to the trade association’s annual analysis of entrepreneurs, which was conducted with around 600 respondents, 16 per cent feel that their survival is threatened directly by inflation.

Not all bad news

Even though this might be tough reading, there's always a silver lining, and as Kofler says, there's nothing like a crisis to make a true entrepreneur see opportunities. As an example, he cites the sharing economy, a phenomenon we were barely aware of before the financial crisis:

“Right now, we’re in a situation where we have to do things smarter. New materials, new business models. Which must be combined with the fact that the consumer has to recognise ‘need to have’ and not just ‘nice to have’, because when times are tough you can do away with ‘nice’.”

Kofler's long experience in the industry allows him to make an observation that future entrepreneurs should keep in mind. He's noticed a pattern that's repeated in many business startups:

“Basically, there are too many expending too much energy developing, without taking the market into account. They spend nine months coming up with a new piece of furniture, without learning anything about the market,” he explains, before giving some sound advice:

“Make prototypes and get them out into the market. Nobody is smarter than the market itself.”

Foto: Pexels