Startup Survival Guide: How To Succeed In The Current Economic Crisis

Six years ago, I took a chance and switched careers from a gold trader to a tech entrepreneur. This change meant altering my focus from concentrating on myself and my trade to becoming an innovator at the forefront of an emerging industry. While changing careers is always a transition, the real challenge was scaling a vision into a viable business. The lessons along this journey have been invaluable in preparing me and my extended team to face today’s economic uncertainty.

Since the first reported COVID-19 case in Europe two months ago, numbers have soared, shutting borders in a borderless economic union, disrupting some of the biggest economies and grinding lively cities to a halt. With the economy in disarray, startups are bound to feel the pinch of uncertainty and seek ways to sustain their business. As my past struggles as a startup entrepreneur are not unique to me, I wanted to share a few lessons that other startups, small businesses, and budding entrepreneurs can use to navigate the current unpredictable economy.

Sustaining Business Through Strategic Approaches

When it comes to sustaining one’s business throughout uncertain periods, there are two approaches that have proven to be useful throughout my entrepreneurial journey. They are categorized as hard and soft which can be applied together to navigate today’s uncertain economic climate and ensure the longevity of your business.

Minimizing Operating Costs

Firstly, hard approaches consist of more tactical structural solutions implemented to reduce costs to support the running of the day-to-day business. Cutting costs to minimize losses is straightforward and can be done through reducing expenditure, cutting production costs and going digital wherever possible. With a significant number of people already working from home, businesses should consider switching to flexible office spaces as a cost-effective method of maintaining efficiency.

Look Out For Government Stimulus Packages

Additionally, entrepreneurs should keep an eye out for government stimulus packages as another hard approach that can provide much needed monetary relief. Across the world, trillions are to be pumped into bolstering countries’ healthcare systems and sustaining industries impacted by border closures, lockdown, and home quarantines. In Germany, for example, an approved coronavirus stimulus package has included a hefty €600 billion for business loans and for buying direct stakes in companies, and an additional €156 billion to finance higher social spending. Other governments are also showing leniency by relaxing costs around business operations, allowing companies to suspend payments of selected social charges and taxes to minimize the impact on companies.

Invest In Employee’s Wellbeing

On the other hand, soft approaches should be implemented alongside hard methods to ensure good employee wellbeing amidst times of economic and employment uncertainty. Approaches such as investing in employee wellness and boosting morale that aid productivity and motivation throughout these indefinite periods of working from home and increased anxiety. At a time when businesses are slowing, an unmotivated team may aggravate the already sluggish output, adding more concerns for the strength of the business.

Consequently, having a strong leadership team to make strategic choices whilst practicing compassion and sensitivity to the varying needs of your employees is vital when steering your business through unfavorable economic conditions. Through my experience with my team, finding time to listen to their concerns and needs is a simple gesture that goes a long way.

Maintaining Innovation & Entrepreneurship

In periods of economic lull, it is best to use this time to evaluate the work that has been done thus far and recalibrate your focus as a company going forward. Often when the economy is healthy and businesses are booming, we tend to be occupied with the execution of work, leaving little time for reviewing and planning. However, this is vital when looking to maintain the health of a company. I do this through the three ‘R’s: reflection, research, and relations.

Reflect On The Wins, As Well As The Failures

When working towards solving a problem, we are often overwhelmed by a solution-oriented approach, throwing multiple darts to test which hits the bullseye. In such cases, coming together as a team to reflect on the triumphs and stumbles and evaluate the most effective approach can help sift through to find strategic solutions better catered to the needs of your company.

Research, Research & Research

There is no better time to learn about your customers and competitors.

Now is also the best opportunity to focus on more time-consuming research. Through market research and surveys, your business can make the best of the situation by landscape mapping and better understanding customers’ needs. In today’s shifting economic woes, research should go beyond merely finding new solutions but instead, understanding the shifting audience and market demographics to give you a lead ahead of the competition and the constantly changing corporate climate.

Build Relationships & Be Engaged In Discussions

By taking time to build stronger relationships with other industry leaders can form beneficial ties and potential business partnerships. While many corporate events and trade shows have been canceled or postponed, continue connecting (virtually) to other industry professionals to keep up with everything from new trends to technologies, placing you ahead of the curve when the economy recovers. This is an opportunistic time to find new technologies, understand new ways of solving problems and seek smarter solutions to adapt to a new reality.

While there are a lot of unknowns ahead of us, adversities are the best litmus test for our flexibility and resilience, positively challenging us to broaden our horizons, and forcing ourselves to become more innovative and entrepreneurial. Being startups and small business owners, we have the benefit of agility that other larger and more established companies do not, giving us the competitive advantage to restructure, recalibrate and re-innovate as and when we can and need to.

 

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