COVID-19 Survival for Startups

World renowned boxer Mike Tyson once said, “Everyone has a plan until they are
punched in the face”. It’s a great analogy that fits perfectly with our current
predicament. Before the pandemic every business, big or small, had some plan to
control and conquer such a situation. But when the pandemic hit, that when people
realized how lightly they were viewing the situation.
Right now the world is still recovering from the pandemic as the economic
situation is slowly returning to normal. This will still take quite a bit of time. For
startups, this ordeal has hit the hardest as many startup businesses had to close
within the first few weeks of the pandemic, most of which are still remaining
closed to this day. With the current rate of recovery it will take months maybe even
more to reach stability.
So startups need to plan out their strategy for holding out through this pandemic.
Also if such a situation were to occur again in the future, they will need a strategy
to help pull them through from that as well. With that out of the way, here are a
few things startups should consider in order to survive this and any other future
pandemics-
1. Take stock of Your Monthly Expenditure
With the current pandemic at hand, the economy has been disrupted and the stock
market has plummeted. At such training times, if you want your startup to survive,
then you must remember that cash is king. The more money you have the better
your chances are at survival. It’s understandable that you’ve just started a business
so money can be considered little short of luxury at present. Therefore, the best
course of action is to control and manage the flow of cash.
Firstly, you need to manage your expenditure. When spending money always look
at the value propositions and benefits. The best way to do this is to calculate the
price to value ratio of every expenditure. Spend as little as possible and avoid
unnecessary purchases. If it’s something you can work without, avoid spending
money on it. Remember that the current pandemic has no foreseeable deadline and
every penny you save raises your chances of survival even if it’s by a little bit.
2. Re-evaluate Your Business Model
Your current business model may be thoroughly planned out to make you as much
money as possible while handling any challenges that come your way. But if the
challenge is a pandemic, chances are you’re very much unprepared. Your safety
funds will only hold out for a couple of months at best after which you will have to
get by with your own savings that is if you have any to begin with.
However, the situation does not have to be so dire. By simply re-evaluating your
business model you can give your business a fighting chance. Go through the
business model you’ve previously come up with and change a few things. Factor in
extreme cost cutting measures. If you have a business to business type business
model, factor in the fact that many of your partnering businesses are closed and
more are likely to follow in the upcoming months. If you have a business to
consumer type business model, you need to consider a third party (such as a credit
card company) to pay you instead of the customer.
3. Communication is Key
Whether your startup business works with other businesses or directly with
customers, the pandemic will very likely disrupt any communication you have with
them. As the situation progresses, lack of communication will eventually make the
situation worse as the connections and networks you’ve formed so far will slowly
fade away. Worst case scenario you may even lose your brand value and brand
image. So make sure to keep up the communications. Chances are your business
partners may have to close down leaving you to find new partners in the pandemic.
If such a situation occurs, knowing beforehand will give you time to prepare.
Communication with your employees is also important. As all your employees are
working from home, managing them will be even more difficult. The more
communication you have with them, the more likely it is you will increase your
work efficiency.
4. The Aftermath of Covid-19 Effects
The pandemic is an out of the norm situation and it is likely not going to go away
anytime soon. Even after it’s gone, the recovery will still take quite a bit of time as
the economy is currently in shambles. This means that the recovery of your own
startup will also take considerable time. So you’ll have to plan out the next few
months after the quarantine is over. For example, you’ll probably have to hold out
on hiring, marketing or traveling for a couple of months. If the effects of COVID
are long lasting on your startup, you’ll probably have to make some major changes
in your business configuration.
Likewise, you’ll also need to consider your sales strategy. If you can somehow
manage to sell your products of services online and in person, you should take
necessary steps to do so immediately. By simply altering your product a bit and/or
adding in a service charge, you can keep your startup alive.
5. Consider Your Investor
If your business has one or more investors behind it, you’d best contact them and
try to please them as much as possible. Investors will now be looking elsewhere for
more profitable business ventures. Therefore, you’ll have to drastically redesign
your business model and try to reassure the investors that your startup still holds
value. You may also need to reconsider your product timelines, sales targets,
project plans etc. to make them content enough to invest in you.