Business Strategies Startups Should Employ During The COVID-19 Crisis
We have clearly witnessed how COVID-19 has shaped the world especially in the countries where the virus is still spreading rapidly. The pandemic has not only adversely affected the health of the public but also of the economy. It is also quite natural that once-in-a-lifetime disruption like the coronavirus crisis is pretty difficult to plan for, and that the hit faced by small and medium-sized companies (SMEs), is pretty larger than big corporations. Right now with this headache of crisis, the immediate goal of startups from a plethora of countries is not growth but day to day survival.
However, it is witnessed that SME market in India which consists of a mix of startups are actually showing a huge potential to grow and seems to be overcoming the challenge. Some of the startups have really tackled this situation extremely well with the help of their vigorous strategy and technology-enabled services and have set an example for other startups.
As a startup business consultant, I have made a list of business tactics and strategies as suggested by business experts and local startups which have proved to be immensely effective during this pandemic –
1. Revalidate your business model for the “new normal” –The knock from Covid19 is not a temporary adjustment but a life time’s learning. Physical presence is not the only solution.
Your company’s business model defines how you conduct your business operations. So, take a look at the business model and try to speed up the process so as to properly cater to the current working restrictions and working format. Right now, the model of online business is gaining immense popularity due to social distancing habits. This is the time when you need to convert your physical outlets into online shopping store and cope up with the customer expectations and business conditions and adapt as much as possible.
2. Effective strategy and communication–Coronavirus has not only affected your business but also your customers and this is the time when you should put an immense focus on customer communication via customer support or telephonic services. Also, this is the time when businesses should not sacrifice on marketing, it helps you to keep a healthy relationship with your customers. Due to less revenue and cash flow, many companies are struggling to invest in marketing. This is the time when one can buy out the audience with the minimum spent on marketing budget. Cost of acquisition has gone down drastically. People are not moving out much but exploring via digital routes only. Companies who were previously not investing in digital marketing must prioritize it now as it helps you reach your target audience and is much cheaper and effective than the traditional form of marketing.
3. Cost Control – Not cost-cutting but cost control through competitive analysis. Every mid-sized companies and or startups are always on growing phase, they don’t have surplus reserves. They can hold the revenue hit for some time, but not gonna last much. They have to undergo cost correction. They might land up in a situation to lay off a few of their team members. But there lies a question, why was this resource employed on the very first go? Is it a performance-related issue, or just deferring the plans of growth. Now, it is a choice to make, laying off or sharing the load with other members? One needs to act really smart.
4. A proper cost control measure ensures that the cost incurred on products should not go above the pre-determined costs. It basically involves various activities related to budget preparation keeping the production in mind. A well-planned cost control plan ensures a reduction in the total cost of production. But if you depend on cost-cutting by cutting at the expense of employees or customers, there is a high chance that your startup business might take the wrong turn and eventually lead to extinction.The amount of money you spent on your business should definitely add a handsome value. Healthy business practices give you an edge amongst your competitors. Your focus must be on delivering exceptional value and in that way, your customer and employee loyalty can pave the way for your success.
5. Plan in advance and focus on budgeting – This is a time when everything has become uncertain and startups do need to plan in advance for their future operations according to what the current situation is. Plan your budget accordingly and always keep your expenses in check. In this pandemic, we have witnessed new ways of learning and fresh customer habits through which we can expect new opportunities to develop in this new normal. Every penny counts, plan it wisely, just not for today but also tomorrow. Not only startups but mid-sized companies also have to start working on their cash flows.
I have worked as a startup business consultant in Kolkata since few years, and my experience tells me that this is the time when your company’s sales will fluctuate, the team will panic, product timeline will fail and even your distribution strategies might also grow in unexpected ways. As a startup company, it is very natural that you will make a few mistakes in this global crisis but do learn from your mistakes because that is how you can handle this situation more effectively. In this period, try to float than fly. Be transparent to your team, vendors and customers about the earnings. They should know the true picture of your cash flows. There can be salary cuts, but don’t delay, ensure regular rotation of funds. If your business can sustain this pandemic, you can sustain any pandemic.