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Published September 02, 2021

The last 18 months can understandably make it seem like now is a terrible time to start a business. But for some entrepreneurs, the steps for starting a business are still the same — it’s just the rules that have changed.

Two small-business pros explain how COVID-19 has rewritten four basic tenets of starting a business and what the path to success looks like for new entrepreneurs in 2021.

1. Create a business plan

What’s the same: You still have to write a business plan, says Frank LaMonaca, a small-business mentor with SCORE in Westerly, Rhode Island. A business plan typically includes such things as how much your product or service will cost, how you’ll market it and how much you'll need to make to break even.

“I think the basic business plan is ... tried and true, and that certainly doesn't change in COVID,” he says. “A lot of people don't even ask that question when they go to start a business, which is, ‘How much money do I need every month to live on?’” LaMonaca says.

What’s different now: Your online strategy has to be front and center. Are you prepared to connect with customers through video chat? How interactive is your website? Do you know how to market yourself on social media? The past 18 months have proved how important these questions are for startups today, according to LaMonaca.

“Those that survived the best had very robust digital-marketing strategies. They had an online presence that connected them to their customers, their clients, their cohort,” he says. “Even if they were a service business … they benefited from having a connection to their customer, keeping them apprised of what was happening next and where they were going.”

2. Calculate what you need to get started

What’s the same: New businesses typically need a pile of cash upfront to set up, open their doors and cover expenses as they ramp up sales. Banks are an unlikely source of those startup funds, says Jerry Herrick, a SCORE counselor in Northern California. “Banks don't waste their time dealing with somebody who's a year away from making it money,” he says. Herrick says tapping personal savings, friends, family and other sources of capital is more likely to produce the funding you need at first.

What’s different now: You’ll probably need way more cash than what your calculations suggest to get started these days, according to LaMonaca. He recommends doubling it now. “If you were thinking, ‘I need enough cash for six months,’ we're saying, ‘No, you don't know what's coming. And you don't know when the next shutdown might be. You don't know how clients will react to what you need to do, whether it's mask mandates, whether it's vaccination requirements.’ I mean, these are things that you’ve got to think about,” he says.

3. Fight inertia

What’s the same: To start a business, you have to actually start a business, Herrick says. “You’ve got to jump in,” he says. “What have you done today? ... What are you going to do tomorrow?”

What’s different now: Starting a business already takes courage and risk tolerance; now you may need even more of those things.

For LaMonaca, the past 18 months went something like this: “I had people calling and asking for time that had survived four recessions and felt their business was recession-proof. And then all of a sudden they had zero revenue. Not 20% down, not 30% down — zero revenue,” he says. “They were in shock. … We had to sort of snap them out of the shock and say, ‘OK, let's treat this like any other business challenge. Let's step back and don't panic. Let's figure out how are you going to conserve cash and get through this.'"

4. Track your money

What’s the same: Finding accounting software for your small business and opening a separate checking account for it are still important first steps, Herrick says. Recording all of your expenditures, even if your business isn’t open yet, can save you money on taxes and keep things much more organized. “Always document the money you receive,” he adds.

What’s different now: With the complexities of changing tax laws, the Paycheck Protection Program and other state and federal business rules, surrounding yourself with smart people may be more important than ever. LaMonaca recommends forming a financial “BAIL” team, composed of a banker, accountant, insurance pro and lawyer who can all help watch over your accounts, prevent tax headaches, reduce liability risks and protect you.

“Pre-COVID, post-COVID, you don't want to go it alone,” he says.

About the author: Tina Orem is NerdWallet's authority on taxes and small business. Her work has appeared in a variety of local and national outlets.