The unprecedented Coronavirus pandemic has had a major impact on companies around the globe. Due to the current lockdown, both big brands and startups alike are reconsidering their business strategies and how they operate on a daily basis. Due to lower revenue and profits, many startup businesses are finding it a challenge to maintain the workflow and keep the financial wheels spinning throughout the lockdown period.
Unfortunately, the impact of the pandemic can prove to be harder for startups and small businesses. This is largely due to the already low cash flow and a smaller funding margin being set aside for such unexpected scenarios. Lots of startups in India have witnessed low revenue generation since March due to a hit in sales, supply chain, and logistics.
In these difficult times, entrepreneurs will need to adjust and help their startup companies adapt to the new practices and stick to the new rules implemented to prevent further downturns. Below are a few tactics for startup founders to manage their businesses during this lockdown.
1. Plan in advance
A forecast of the time it will take for the pandemic to pass is a debatable one. It would do well in the long term for startups to be prepared with a plan in place, no matter the time. Depending on the nature of the business and the time it takes for the economy to return to normal, this strategy may be planned over a span of 3-18 months. For example; if we assume that the crisis will last for 3 months, then certain flexible expenses such as hiring, travelling and marketing expenses can be paused immediately.
If the crisis is set to last for more than six months, then your startup will have to reconsider a majority of its strategies and concentrate on the critical. Renegotiating fixed costs would be beneficial in terms of things such as revenue.
If the pandemic is set to last for more than 1 year, then startups will have to seriously rethink their strategies and pay attention to keeping the company alive. This holds especially true for emerging firms. Businesses would need a revision of revenue targets and manufacturing timelines along with the creation of a new operating plan. Startup founders and management must keep communication transparent and update their employees and investors as often as possible.
2. Keep track of your expenses
Crisis scenarios tend to impact revenues and businesses need to keep track of expenses and properly assess fixed and variable expenses during lockdowns and quarantines. Assessing the expenses will provide a clearer picture of where the company stands and will assist in developing strategies accordingly. Even after the pandemic has settled, startups can follow this to keep themselves constantly updated on where the business stands, giving them the upper hand to be prepared for any unexpected downtimes.
3. Communicate clearly with your customers
We're all in this together, so the ideal way to stay transparent about what your startup is going through is to communicate clearly with your consumers. Communicating openly with the clients can help them better understand and be empathetic about your situation.
4. Talk to your team and keep them engaged
Your people are the key to your business success, so talk to your employees. This is a time of great anxiety for everyone-and they are directly affected by your decisions. If they feel valued and part of a team, workers would be more inspired too. Your organisation, as an entrepreneur, relies on you to guide them through this time. It is the duty of an entrepreneur to ensure that the team is engaged, and to maintain productivity. Lockdowns and quarantines can take a toll on some employees' mental health so your good words will help them to bounce back faster by assuring them and accommodating their needs. It's of utmost importance to raise morale within your team.
The truth is, every startup founder will have to work their way through their unique problems. There's no easy guide about that. But getting a clear idea of what your startup needs to thrive and develop during lockdowns and quarantines can make it much more simple.
We hope this article proves to be useful for your business. Don't forget to let us know your tips and suggestions in the comments below!