As we emerge from the COVID-19 pandemic that began in early 2020, concerns are growing about how geopolitical conflicts in Ukraine and the Middle East, specifically in Palestine and Israel, might impact economic growth and entrepreneurship. It’s important to recognize that many crises, whether they are geopolitical, health-related, financial, or natural disasters, are often beyond the control of entrepreneurs. However, the actions and decisions made during and before a crisis can determine whether a business survives or faces a costly closure.

Undoubtedly, these are challenging times for entrepreneurs, innovators, and risk-takers across all sectors. The cost of capital is expected to remain high; market volatility will be influenced by conflicts in Ukraine and the Middle East, climate disruptions will disrupt supply chains, and tensions between China and the West will affect trade, supplies, and business continuity. All of these challenges compound the day-to-day difficulties faced by early-stage businesses.

Drawing lessons from the pandemic, entrepreneurs have demonstrated resilience and adaptability through digitalization and decentralization. They have repurposed their ventures and expertise to adjust to global “lockdowns” and provide relevant services to people at home. Similarly, in the current uncertain market, entrepreneurs play a crucial role in helping economies and consumers navigate crises by generating innovations for service delivery and promoting alternative ways of working and consuming. Consider how food, entertainment, and sports consumption have shifted toward tech-driven subscription services. Entrepreneurs will play a leading role in scaling new technology offerings, particularly in leisure, entertainment, and recreation. This is an area where the affluent world is spending at least $600 billion less per year since the pandemic, as they rely more on stay-at-home tech-driven services.

While there will be gains, there will also be pain. Some entrepreneurs may have to pivot or close their ventures, facing the stigma of business failure or restructuring. For individual entrepreneurs, dealing with a crisis carries a personal psychological cost, but closing operations may be the smartest move if the cost of survival and recovery is prohibitively high. The biggest challenge when considering business closure is the “sunk cost fallacy,” which leads to sticking with an unviable business plan when the costs clearly outweigh the benefits. As Angela Duckworth suggests in her book “Grit,” success comes from sticking to the right things, not just anything.

The Climate Crisis and Opportunities

Regardless of geopolitical tensions in Central Asia and the Middle East, the primary risk driver of our time is global climate change. It is projected to cost global economies 10-14% of GDP by 2030, unless rapid decarbonization and resilient investment decision-making are in place (as per Swiss Re). Therefore, entrepreneurs, regardless of their political views, should consider both climate risk and the tremendous clean-tech and green growth industrial revolution, which already attracts $2 trillion in investments per year and is expected to double by 2025.

Turning a Crisis into an Opportunity

The best entrepreneurs will leverage a crisis to their advantage. During a crisis, there is an opportunity to overhaul everything, from your business model to service delivery and staff. Seek ways to automate, outsource, and delegate, resulting in cost savings and empowering your team. While it’s never easy to let people go, survival often necessitates identifying indispensable personnel and automating tasks to reduce operational costs. For example, some restaurants have transitioned to using QR codes and apps for orders, significantly boosting their margins.

No matter the challenges, committed entrepreneurs will adapt, restructure, and thrive. They will do so by eliminating staff and practices that no longer work in unstable market conditions where service delivery is digitized, and decentralized solutions and finance are the norm. Surviving entrepreneurs will be those who can make tough decisions independently and tolerate the stress.

Key Actions to Take

During a crisis, surrounding yourself with positive, strong-minded individuals can help you focus on solutions and celebrate each accomplishment on the path to success. Building partnerships with people who possess skills you lack, and who are ethical and energetic, is essential.

Establish a routine to stay motivated and use your time efficiently, making sure to set aside time for self-care, exercise, or meditation. Refresh your body and mind, analyze your business, and invest in further education through reading, training, and listening to podcasts. Most importantly, rest when needed. Finally, reboot your business to adapt to the evolving business landscape.

Final Thought

In conclusion, the entrepreneurial journey during times of crisis presents both challenges and opportunities. Entrepreneurs who can adapt, make tough decisions, and embrace change will not only survive but thrive in an ever-changing business landscape. Collaboration, ethical practices, and a focus on sustainability are likely to be key factors in the success of businesses in the future.