2021 might just be the best year to start your business

“This became my diversion from all the fears, anxieties and uncertainties of last year,” said Valenton.

Since launching last year, Valenton has hustled and sold a thousand jars to date and established nine resellers in the country.

“Adik talaga ako sa trabaho. Adik akong tapusin yung trabaho at gusto kong hinihigitan pa, yun din yung values na natutunan ko before sa ABS-CBN na ina-apply ko lang din ngayon,” Valenton said.

Valenton’s story is in keeping with how a number of Filipinos are now finding ways to claw out of the hole that was 2020. According to the latest survey by the Social Weather Stations, adult joblessness came down to 23.7% in the fourth quarter of 2020 from a high of 39.5% in the third quarter.

In actual numbers, this means that 11 million regained their livelihood during the period. Though the 23.7% jobless rate was an improvement, it is still far from the pre-pandemic level of 17.5% in November 2019.

The gradual recovery came about as the government started to loosen lockdown restrictions by the tail-end of 2020 to give leeway to some businesses to restart operations.

Last Jan. 28, on the day the government announced the full-year economic performance of the Philippines, economic managers said that they “see green shoots of recovery” in the last quarter.

COVID baggage
JJ Atencio, chairman and CEO of Januarius Holdings, is even bullish of business prospects this year, calling 2021 as “the best time to start a business.”

Atencio said that as many pre-COVID businesses struggle to stay afloat, this would be the perfect opportunity for challengers to rise to the occasion. In addition, interest rates remain low as the central bank tries to buoy business sentiment, while some local government units have been dangling incentives by waving regulatory fees just to encourage businesses to stimulate their flagging economy. Plus, for those seeking office space, rental rates continue to go down due to low demand.

“New businesses do not have what I describe as ‘pre-covid baggage,” said Atencio.

Atencio said this “pre-covid baggage” would include debt, rent, and overhead expenses.

“Existing businesses would need to spend much effort and resources to revise their pre-COVID business model in order to survive. A new business would have none of that, and in fact, would start with the conditions of a COVID-affected market already existing, making new businesses during this pandemic advantageous over existing ones,” said Atencio.

A case in point, said Atencio, would be that while restaurants are having difficulty with their business, thousands of neighborhood kitchens have sprung and are thriving.

“Notice too how the macro economy has eased to stimulate business activity.  The BSP has lowered interest rates and landlords are giving lower rental rates with generous terms. New businesses can take advantage of these easing if they start their business at this time,” Atencio added.

Digital opportunities
Diane Eustaquio, the outgoing executive director of the PLDT group’s IdeaSpace Foundation, said that a number of the start-ups they are helping have been recently locking two- to three-year contracts with big companies for digital services.

As the pandemic has accelerated the digital shift for many companies, start-ups who can lend a hand in that online migration are getting the goods.

“For the start-ups I am exposed to, it’s a good year for them because of all these efforts for digital transformation,” said Eustaquio.

Aside from private entities, Eustaquio said that a number of local government units now also need help managing their digital assets. Other areas that also have opportunities for start-ups, said Eustaquio, include educational technology, health care, online consultation, e-commerce, and even digital content platforms.

“As long as you are customer-focused, know the customer pain points and understand well how to address those, there is opportunity,” said Eustaquio.

Improving sentiment
Luis Limlingan, managing director of stock brokerage firm Regina Capital, noted that investor sentiment is slowly but gradually improving.

“We can say there is now more confidence,” Limlingan said. “Last year, the question was about the virus, we didn't know about it, we were just learning about it. But now, the question is just when the vaccine will arrive, and that one could be somewhat measured.”

Limlingan noted that compared to last year when market turnover at the stock exchange just slightly tipped over P7 billion on a good day, now it has recovered to the P10 billion level.

Though there are pockets of growth, it’s still not all sunshine and roses. Most brick and mortar operations are still hanging by the skin of their teeth. Travel and tourism remain badly battered. And, with food prices on the rise, inflation is creeping up, which could then constrain the central bank from further cutting interest rates.

Pre-pandemic
Ayala Corp. chair Jaime Augusto Zobel de Ayala sounded a note of cautious optimism during the membership meeting of the Shareholders Association of the Philippines last Jan. 22.

In a sobering note, he said it might still take two years for the country to truly get back on its feet, and even then, such a scenario could still be derailed.

“It may not be until the fourth quarter of 2022 that we will see Philippine economy recover to pre-pandemic levels, barring any new surge in new infection rates or significant execution gaps in our vaccine implementation rollout,” said Zobel.

“We should all work hard, but be realistic that this will all take a little bit of time,” he added.

When SM Investments vice chair Teresity Sy-Coson was asked last year how she would navigate through the crisis, she quoted her late father Henry Sy:

“My dad always told us, ‘In good times, we work hard. In bad times, we work harder’.”