Strategies To Be Followed By Startups In the #NewNormal COVID-19 challenges can be eliminated if entrepreneurs adapt to the current times, adopt new strategies, and are open to experiments and pivot their business plans
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Almost all businesses have been knocked side-ways by the global COVID-19 pandemic. However, when it comes to the startup ecosystem, the carpet has really been pulled from under these companies' feet. A recent survey conducted jointly by FICCI and Indian Angel Network revealed that 70 per cent of startups across the country have been impacted by COVID-19 while as many as 12 per cent have had to halt operations altogether.
These are difficult times that no one was prepared to deal with. The prolonged lockdown had a massive impact on the startup ecosystem. Given that they rely largely on a constant flow of capital and investments, which due to the pandemic came to a complete standstill.
With the ongoing crisis, to keep startups afloat has become quite a challenge. However, this challenge can be eliminated if entrepreneurs adapt to the current times, adopt new strategies, and are open to experiments and pivot their business plans. That's because the pandemic has not only affected our present but also our future.
The fact here is the global pandemic has changed the definition of normal. The ways and strategies that used to work for businesses pre-COVID-19 may not work for them in the future. To put it simply, only those startups that are willing to embrace the change and adapt proportionately will be able to thrive in the new normal era.
The pandemic became a wakeup call for entrepreneurs to pivot and turn to adapt to the ever-changing world of business. Also, this is important not only in times of crisis, but also in everyday business situations where disruption lurks around every corner. So, here are a few actionable strategies to help your startup find its "new normal' during COVID-19 and beyond.
What can startups do to survive in the new normal?
Innovation is the key to survival of startups. And to develop innovative solutions for the future, startups must recognize which customers to target and what technologies to apply, etc. Thus, startups seeking to accomplish a better position in the new normal, it is important for them to chalk a business strategy step by step.
Be proactive with customer outreach: Startups need to realize that the pandemic has brought a huge behavioral change perceivable among the consumers. Their tastes, spending habits, needs, and wants have gone through a seismic shift. As an entrepreneur, your challenge is to identify the new trends, get past consumers' inhibitions, and make them believe that you can solve a certain problem. Be proactive, when it comes to reaching your customers. As a startup, define your outbound strategy and generate leads from all the possible mediums. Social media platforms and digital marketing are your strongest ally during these times.
Adapt to a dynamic environment: For any startup, it is important to identify how the business environment is changing. Simply, recognize why businesses are shutting down or halting their operations temporarily. In such a scenario, to address all these concerns, as a business leader, you need to make a business operating plan which is more conservative than you think is necessary. In other words, plan for the worst and hope for the best. For example, tech-driven startups must embrace the current climate of digitalization. Those businesses focusing on technologies such as big data, cloud computing, and IoT will be positioned in a better spot to lead much-needed global, economic, and societal change.
Cash is king: For any startup, funding is fuel to propel forward. While debt and equity-financing will continue to be available, over-reliance on them will become riskier. In these times, a startup must revisit its costs. For instance, does it really need that office in Mumbai? Take an approach to calculate how much capital is needed to keep the company afloat in order to reach key milestones, and cutting corners on unnecessary costs. As early-stage startups have no revenue, the burn rate is mostly equal to their total monthly spending. Thus, reducing burn rate is important. Startups should try to have a runway of at least six months to allow time to raise new capital.
We don't know yet which new companies will be born out of the 2020 crisis. But it is no secret that in the coming years, startups and unicorns will disrupt our societies, and change the way we live, consume and communicate.