Save startups strategies amid COVID - 19 crisis
It may be little bit longer you have to remain at home; the decision made by the Modi 2.0 government announced to extend the lock-down in India till 3 May 2020. While the corona-virus lock-down had hit the world with triangular attack on – health, wealth and consumer behavior, the impact seems to render huge shift in all these aspects. Some of the great lessons which COVID -19 had taught us will be mentioned in upcoming blogs – like when looking to expand your business internationally on social media, what should you do first?, business insurance, assurance in near me etc. to name a few.
It will be too early to understand the impact of this contagious virus on economy and people, but one thing is clear that overview seems painful and there is neither a wolf of wall-street nor a fox of business street help you out in sailing through the tough times; we, them, they all are sitting under a single umbrella right now. One thing is very agonizing and crystal clear that lock-down had impacted startups and small businesses very hard. The impact is so hard that people are searching for the best business insurance near me or best business insurance for my business, in the hindsight, it seems business insurance companies are feeling huge pressure or will feel huge pressure in managing their channels with increase in demands for business insurance. Some are partnering and collaborating with business consultants and better business bureau across their states while some are focusing on the essential business on their product lines, however it all seems uncertain. Investing in startups and small businesses seems quite uncertain for investors now and entrepreneurs are trying better off with save our startups schemes, offers and campaigns; recently, UK tech leaders call on government to act now to save startups by seeing rise in corona-virus stats and rise in triple figures percentage of patient outbreaks in counting corona-virus by states; decision seems coherent as per present situation. Over the past few weeks, we’ve been exploring the economic effects of the corona-virus on startups and small business and ways to lessen the economic damage they face, we sought to understand how entrepreneurs, startups and small businesses are dealing with fatalistic disruption. As owner of startups and small businesses you need to understand the present overview of corona-virus lock-down on startups and small business industry, they are as follows:-
Firstly here are some of the conclusions made by industry watchers on current crisis
1. J-curve in layoffs and shutdown
The magnitude of the shock is so hard that we presently don’t know how many people in India lost the job and how many businesses shutdown. Possibly, the corona-virus had shaken the supply chain of many startups, small businesses and big businesses as well, being present in such a volatile environment the most distressing thing is rise in layoffs and permanent shutdown which could be in thousands and if not controlled the figures will skyrocket to millions.
2. Startups and small businesses either cash trapped or cash extinct
Every business whether small or big has recurring cost and operational cost involved. In present situation, the cash seems trapped and many startups and small businesses are only left with either few cash in hands or no cash in hands, it’s pretty hard to imagine how to run business without cash, the entrepreneurs at startups will always asking is there any financial aid provided to us by the government or do we have business model which can self-sustain itself in or post pandemic situation. The lifeline of the availability of the cash in hands of startups are cut or seems lifeless, startups and small businesses will have to cut their spending’s or find new ways to sustain like collaborations.
3. Unprecedented to back on track
What the majority of startups thinks about the future of their business, will the growth seems uncertain or whether they will get back on the track by making cautious decision in uncertainty? The balance seems on negative side of the weighing scale but the prudence person knows how to fight back with uncertainty. Every industry seems sluggish but for some products like sanitizers and masks the demands seems skyrocketing with increasing numbers of pandemic victim patients. Being someone who knows consumer behavior, I would like to predict people post-pandemic will become more cautious, not just for a while but for a whole life and this may be an opportunity call for an optimistic to solve the pessimism because we know startups are made to solve problems through their holistic innovations.
4. Incompetent and un-confident with facts, figures and crisis impact
Possibly, the biggest unknowns are yet to known and precisely speaking it’s incompetent now to predict when the pandemic will over, we know once this contagious virus swipe off from this world and situation starts appearing normal, industry starts functioning, banks starts lending we could confidently come up with the facts, figures and stats about how much time it will take to cover up the loss we suffered, as of now break-even calculations seems like shooting the arrow in the dark. Honestly, startups don’t have an option except accepting big economic forums data because they have data in large numbers as compared to startups functioning in a particular industry and their correlational values can be more accurate than shooting the arrow in the dark.
Psychologically speaking, this is and this will be the case for many entrepreneurs; many entrepreneurs as of now could be under dilemma whether to quit startup or fight for startup. Many studies in past also shows that people in crisis situations are either confused or lost consciously, but frankly speaking, you should be frank enough to accept that. In the introductory part I have mentioned that corona-virus had triangularly attacked on health, wealth and consumer behavior and the dilemma is the latter aspect i.e. consumer behavior.
Here are five strategies to save your startups in covid -19 crisis
1. Furloughs for employees with installments rather laying-off
It’s easy to say furloughs is the only option by which you can retain your employees, however, it’s hard for startups and small businesses to implement it with full efficacy. Many of the startup employees especially in India are based outstation from home to work for a startup particularly in silicon valleys, national capital and financial capital of the country. We know that the amount payed to them are in salary plus ESOP’s and that continuum startups usually pay less salaries more often the survival income for its employee in initial years or early stages. I would like to suggest you, instead of not paying them out or laying of a startup or small business can use furloughs with installments. For instance, an employee is salary is 20,000 per month and he or she didn’t worked for 1 month. A startup can come up with mutual consent to pay that particular amount within 1 year in form of installments, this can be boon for the startups and small businesses whose attrition rates are increasing.
2. Taking decision prudence manner
It may sound philosophical but what if I tell you that there is a pit and there is a well on your either side and you have to cross it and this the time when you need to focus on the taking the decisions cautiously, startups and businesses need to exercise prudence in amidst environment. Wisdom of thoughts, execution of ideas and sanity of judgement is what a startup and business required now particularly if you’re small, early stage or rising with full speed yet not established. The reasonable and rational approach to the business idea is what time and economy demands now, if you feel you and your founders group are began to doubt about your own sanity, I would say “ask your mentor”. The rational, logical and economical approaches based on your business model, interrelated economies and sudden shift in consumer behavior will help your startup and small business to guide further.
3. Your local policies and collaborations
In certain countries either government comes up with aid or any private groups form an association to sustain the whole ecosystem, I would suggest to go with latter. Just keep eye on the policies of the government and see how that particular policies can help you in sustenance. Comprehensively, we all know that normalcy in present situation will take longer and we do agree that we need to be patience towards the approaches we made. The ultimate suggestion to embark your growth is use to deduce your growth percentage, marginally cut-off your target and see what local policies can do for you. Maybe, an entrepreneur next door is planning to go on-board with industrial adoption or collaboration, even you can do that as of know well negotiated terms on collaboration can be the better picture, you may collaborate with the present business in your chain, in this way you and your collaborating partner can form unity to fight in amidst crisis.
4. Consumer shift
The fact can’t be denied and to higher extent we know that the consumer shift will be huge; people will be more cautious than ever before, quality will be more important and deliverance need to be more transparent, this is what a post-pandemic situation will look like. The biggest challenge for your startup and small business would be ability to how efficiently and easily your business model is able to grasp the uncertainty in consumer behavior. The huge shift in is standing next door, so does your brand communication should be, startups and businesses should accept that there previous communication model may or may not be effective and the behavior of the target audience should be examined carefully before taking any leap. Optimistic startups and businesses whose brand communication are well tailored as per consumer behavior likely to capture higher market space. I would call it as “C” should be aligned with “C” i.e. your communication should be aligned with consumer.
5. Balance of payment
Conceivably you have to be realistic now, the startups and small businesses should start focusing on their balance of payment issues. The fixed and variable costs should be the accurate figures, cash flows need to be realistic and most importantly how the revenue generation will happen should be pragmatic. Startups and small businesses should cautiously decide with revenue and cost, being over optimistic will not be pragmatic and practical as per the situation; planning triple figures growth for startups and 30-40% of growth on revenue will no longer practical if your product or services doesn’t fall in either essential category or growing industry. Also, since it would be higher time when competitiveness will be high and existence is only the option left, you should plan your cost and revenue figures clear-sighted.
In time of COVID -19 crisis it would be better if the startups and small business acts more practically than ever, more prudence than ever, more rational than ever and ultimately more hard-headed and logical than ever. The main aim of any startup is to solve the pre-existed problems in the society; think crisis as the problem of the society and solve it accordingly, your balance sheet and consumer both will like this, and this is how you can approach towards saving your startup and small business to seek forward in amid COVID-19 crisis, see your business model, talk with mentors and plan carefully.