It’s early 2021, and the second wave of Covid-19 or Coronavirus is turning up to be even more infectious and damaging than the first. For startups across the globe, the resurgence of Covid-19 threatens to be an extinction-level event. The Global Startup Ecosystem Report (GSER) 2020 indicates that only over a third of the world’s startups got through the last year without having to lay off their employees or cut down on their paid work hours. The unfortunate majority had to resort to laying off about 33 percent of their employees.
At present, an estimated forty percent of the world’s startups are operating with a capital reserve of 3 months (or less). With a steep decline in VC (Venture Capitalist) investments and service demand over the past year, these startups will fail to survive much longer without raising additional funding, cutting down on their current expenses, or improving their revenue.
Whether you belong to the forty percent caught in the storm’s eye or the rest that are better placed yet still struggling to stay afloat, this brief crisis playbook offers expert guidance on surviving the pandemic.
Tips for surviving the Covid-19 disruption
The one good thing about the current market crisis caused by Covid-19’s resurgence is that it’s not come as a complete shock. Experts have been predicting this second coming for months, we’ve witnessed its effects over the past year, and most of the world governments have already devised effective counter-strategies. Also, we can draw lessons from the startups and small business platforms that either sank or survived during the first wave. These are the most important ones.
Statistics related to global economic recessions of the years 2000-2001 and 2007-2009 reveal some reassuring facts. More than 50 percent of the world’s Fortune 500 companies were founded in times of bear market or global recession. These included 50 plus unicorns in the technology sector. While these recessions saw a drop in net investment, there was an increase in the number of companies that received funding.
Virtually every government in the world is wondering how to help small businesses and startups. Most have already offered stimulus packages to aid relief and the economic safety of its citizens. US President Joe Biden recently signed off on a $1.9 trillion new stimulus package. Canada, Germany, and Japan are some other nations that have extended similar large Covid-19 relief packages to curb the economic damage.
If you’re running a startup or small business in the US and having trouble with costs such as rent and utility bills, you should look into your state government’s coronavirus financial assistance schemes and check whether you’re eligible for financial aid. You may also be eligible for a disaster assistance loan from the Small Business Administration.
Invest in a digital presence
Irrespective of your business’s size, if you don’t have a good digital presence, both survival and success will get harder in the future. In an age where 59 percent of the consumers prefer to shop using their mobile phone, about 46 percent of the US small businesses still don’t have a website. The ongoing pandemic’s impact on everything from supplies, production, and personnel’s movement to the actual demand has revealed that going digital is necessary to remain operational and competitive.
Invest in building a website or eCommerce store according to your business needs and budget. Having a digital presence opens the doors to online sales, better consumer engagement, and the ability to remotely manage your business operations in the event of a future lockdown.
Don’t forget to utilize social media. Proper utilization of social media platforms such as Instagram, Facebook, Twitter, and YouTube can help you reach out to a wider audience and market your products and services at minimal to no expenses.
Work on building local and digital connections
While expansion is one of the ultimate goals for most startups, the current crisis is an opportunity to use your product or services to help your local community face new challenges. This can help you generate more revenue when your original consumer base’s demand is already low and help build a brand new customer segment.
Researching the local community’s problems and the ways they’re adapting to the pandemic can help you discover ways in which your own services can be utilized for solving their problems. A good example is startups involved in creating customized apparel partaking in making reusable masks for their community.
Look into ways to adapt your services into a digital product. Gyms and nutrition-based startups, for instance, can use their digital platforms to offer home workout programs and diet plans to their existing customers. This will also help them attract health and fitness-conscious individuals who’re either uninterested in or are unable to find the time to enroll in a gym or consult nutrition experts.
Diversify your products and services
If you’re facing a decline in demand for your products or services, you should look to diversify your inventory. There are plenty of successful examples to learn from – from travel companies starting interactive online tours to food suppliers expanding their service sphere to include the delivery of groceries and other essentials.
Should the pandemic stretch longer, you should be prepared to change the way you sell your products or services. Look for ways in which you can adapt your product to the consumers’ current needs and limitations. Dine-in restaurants can switch to a largely takeaway model. Resorts paid home-stays, and travel-related businesses can promote pre-bookings accompanied by discounts to keep the revenue coming. Advertising strategies such as pre-ordering, digital product launches, and gift certificates are other useful means of staying visible and keeping the consumers engaged.
Use social media and online marketing to ensure your existing customers are informed of your startup’s new offerings. Existing customers are more likely to try your new products based on past favorable experiences and promote your new products via word of mouth.
While change is a necessary part of ensuring your startup’s survival, it’s imperative these changes are not too drastic and the focus doesn’t shift from offering the solutions that your startup was originally founded to provide.
Create a remote working strategy
If they haven’t already, Covid-19 related business and movement restrictions can halt the day-to-day operations at your brick-and-mortar office or store in the future. You must devise a remote working strategy so your staff can remain productive even if they cannot physically be at the workplace. Make sure your staff is equipped with all the requisite tools for remotely carrying out their assigned tasks.
Effective communication is key to keeping your operation on track and keeping your employees engaged and motivated in remote working situations. Remote working mobile apps such as Serene, Slack, and Zoom can help you manage time and workload in an easy, efficient way.
Plan for the future
There’s no telling how long the second wave of the pandemic will last or even if this wave will be its last. Your plan for the future should include strategies for running your business in a post-Covid-19 startup space, as also, in an environment where restrictions on the movement of supplies and personnel have become the norm.
You shouldn’t find yourself unprepared if the pandemic dies down shortly and consumer behavior shifts back in favor of the traditional brick-and-mortar business models. Ensure you have the resources in place to commence business operations from your original workplace on short notice and that your employees are prepared to resume work from the office/store.
The key to surviving the pandemic lies in taking stock of the current market situation, identifying unmet consumer needs, and coming up with innovative solutions – something you already accomplished when you founded your startup. With the right approach and careful planning, you can do it again and see your startup past these troubled times.