Keeping Your Startup Afloat During The Times of Pandemic
Generally, startups face different kinds of challenges before they gain some form of stability. Depending on the extent of the challenge, it can lead to the collapse of the business.
Unfortunately, in the year 2020, the world was hit by the COVID-19 pandemic, which led to many startups’ collapse while others are still battling for survival.
Although most countries have lifted the restrictions imposed due to the pandemic, startups need to understand how to keep afloat during the pandemic.
Besides, there are speculations that there might be a second wave of the pandemic, which might lead to the imposition of restrictions and certain businesses’ closure.
Here, you will find some tips on how to keep startups afloat during pandemics and even after the pandemic.
- Reduce Your Expenses
Reduction in expenses is one of the most important tips for startups to stay afloat during a pandemic. If you still have an outstanding capital budget or other projects that are not urgent, you should suspend those spending.
Since there is a reduction in the inflow of money, a reduction in expenses will help the business to maintain a slim running cost. Hence, it will keep afloat for a more extended period.
- Increase Your Revenue
After reducing your expenses, the next thing you should do is to make efforts to increase your revenue. Despite the pandemic, some businesses are still raking in profits. It is important to look for other ways of serving your customers.
For example, restaurants can start home delivery or turn their offline store into an online store where customers can place orders online and have them delivered to them.
- Consider Credit Facilities
Although most startups avoid taking up credit due to high-interest rates, it can help keep your business afloat. Consider accessing credit to help keep your business running. However, ensure you take up an amount that you can pay back quickly.
- Negotiate with Suppliers
During pandemics, suppliers are also aware that most businesses are passing through some form of challenge. As a result, they would prefer to get some money too.
If you are facing a severe cash flow challenge in your business, feel free to reach out to your suppliers or vendors to negotiate a flexible payment plan for their supplies. This way, you are still able to receive supplies with less cash.
- Consider accessing Government Support.
During pandemics, most governments roll out various forms of palliative to help cushion the effect and sleep businesses going. Whether it is a grant, loan, or tax cut, ensure you take advantage of such initiatives as they would help to keep your business afloat while the pandemic lasts.
- Take Care of Your Employees
One common occurrence during pandemics is that businesses tend to lay off staff as a way of reducing running costs. However, layoffs should only be a last resort. Consider taking options like having top management staff take a salary cut.
Even more, you can also arrange for reduced work hours or a salary cut in extreme cases. Ensure you take care of your staff as they are the lifeline of your business.
- Switch Production
During pandemics, there are always good and services that experience shortages. For example, during COVID-19, there are shortages of hand sanitizer, face masks, ventilators, and many others.
You can consider switching production to other products that are in high demand, provided you have the capacity to do so.
- Stay Positive and Maintain an Open Mind.
While you are trying to keep your startup afloat, ensure you stay positive, and maintain an open mind knowing that things will get back to normal.
Take the pandemic as one of those challenges every entrepreneur will face and approach it like that. A positive state of mind will help you remain healthy during the pandemic.