The startup is a risky venture and the life of a startup is frenetic, but the outbreak of Coronavirus has escalated this frenetic-thing to all-new levels. Not since the September 11 horrifying attacks, the social and professional conversations have been entirely monopolized by a single topic.
Originated in China’s Wuhan, Corona is a social and economic sledgehammer that has descended upon the whole world. Here are some of the biggest challenges for startups amid Corona: missing supply chain links, little cash on hand, eager but scared employees, consumers who are have shifted to staple products and services and online-only channels.
Time is hard for every industry and every business around the globe, and for startups, it is the hardest. However, startups are used to manage the business with limited resources and if armed with the right approach, the startup ventures would be able to survive this difficult phase.
Here are the 5 Strategies for all early-stage entrepreneurs that will help your startup business to survive amid Corona:
1. Accept the Problem:
When any disaster takes place, there is always some share population that remains restrained and over-optimistic about it. While there are some startups have that started focusing on the negative ramifications to their business and started to adjust accordingly, there are still some that think their business will be insulated or might even see an uptick.
Over a couple of months, every industry would get to know that coronavirus is an unexpected seismic force that will turn every element of the society upside down. No doubt, some businesses will witness the direct and immediate impact of the pandemic, none of us emerge will from the Corona in one piece.
The sooner startup ventures will move past denial and start extenuating on the scope of the impact, the better off they and their stakeholders will have.
2. Re-evaluate and Prepare Again:
No matter, whether you have prepared your operating plan in January, February or 15 days before from today, you need to re-evaluate it. Most startups tend to overestimate what they can accomplish in a year and underestimate the result that they will obtain after five years. Right now, many startups are overestimating the post-Corona growth but underestimating the impact which they will face in Corona times. This situation of whammy must be baked to get revised operating plans. It is important to note here that the risk of being unprepared is more significant than the downside of over preparation.
Make sure that your revised operating plans are more solid than it is required. In other words, plan for the worst and hope for the best. Corona will increase the length of the sales cycle and deal sizes will shrink as consumers will be more reticent while spending.
Companies involved in selling physical products will experience a disruption in supply chains and startups that are majorly dependent on in-person sales efforts will also take a hit due to travel restrictions and an increase in remote work. All in all, every startup venture should look now to start practicing the art of digital selling. Calls and video conferencing are not just, every sales plan should be re-evaluated and change accordingly.
We all will be impacted, so plan accordingly. Spend time in discussing the strategies of tomorrow and next week, rather than building plans for next quarter and next year.
3. Be the leader your team needs right now.
It is the moment of crisis that reveals the true mettle of leaders. Nothing matters more than employees associated with you at this difficult time. Start by mandating telecommuting and make sure you are keeping the employees’ safety above all. Also, if you can afford to keep contract workers who are not able to work remotely, then you must not lay off.
VCs often advise founders to raise more money than to safeguard the business in case the unimaginable occurs. Well, this is that unexpected time when you need that cash reserves. However, no decent investor will ever punish you for incurring costs from doing the right thing. Right now the crisis is happening in every part of the world and across every business sector. So, currently, it is important to do the right thing first.
4. Overcommunicate and Empathize:
The current situation is panicking for everyone, whether it is your customers or employees. If you are physically away from them, be visibly and emotionally present. Try to communicate as much as possible. Try to conduct company and department-wide video conferences; you can use tools like Zoom, UberConference, FreeConference and Skype.
Replace certitudes among your team with frequent words of affirmation. Use emphatic language over calls, texts and email to communicate your support. Make sure you are showing empathy and flexibility towards your team in this difficult situation. There might be parents in your team with small children around, who are trying to be as productive as possible. Same with the young individuals with elderly parents who need to be taken care of. Tighten the belts humanely, tell them you understand and support them during this situation.
There will be many startups that would crash under the impact of Corona and there would be many families that will go through the unprecedented economic and social pressures. Yet as the CEO it is imperative to keep your moral grounded high while fighting this state of insolvency and low sales.
If you are a startup venture with cash as a limited asset, here are the things that you can follow to balance the current phase:
- Reduce hiring or at least postpone current hiring for quite a few times.
- Plan to resume hiring whenever a company starts to stabilize.
- Cut the discretionary costs by halting the marketing and sales campaign. Such expenditure encourages incremental growth and can be put on hold for some time.
If the cash situation becomes worse, then you might have to consider layoffs. If you are adopting it, make sure you are generous with severance and outplacement packages.
5. Aim not to Survive but Thrive
There is no denial in the fact that months ahead are going to be freakingly tough. But, remember innovation and creativity also emerge during the situation of scarcity and reframed prospectives. In-person meeting with your sales team is no longer an option in the present situation; however, you can motivate your team to develop products that customers love.
Workflow automation will be at the center stage for the companies which sell products to consumers or enterprises. The usage of a lot of products and services will narrow-down in the coming months, but it will return to pre-COVID-19 phase once we are on the other side. An innovative approach can also establish “new normal” across a myriad of products and services, which will pave the way for non-linear growth and expansion.
Before Corona also companies have faced challenges and have emerged from downturns. So, don’t quarantine your mind and keep looking for innovative ideas. The right idea will not only make survive but thrive in Corona times.
Coronavirus is not something that we’d have wished or prepared for, but now since it is here, rather than simply losing hopes, see it as a challenge and work to overcome it. Focus on what truly matters and how you can make up to the other side of it. But, before that, wash your hands with soap and don’t forget to maintain social distancing. Stay at home and stay safe.