An Entrepreneur's Guide To Start-Ups Battling COVID-19 Testing times like these contribute to the emergence of new business models and leaders.
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The COVID-19 pandemic has severely affected organizations, communities, and institutes all over the globe. While big businesses have been forced to dip into their contingency funds, in the case of start-ups, even that option isn't available.
With meagre cash reserves and limited margins, start-ups are finding it difficult to get back on their feet. What's even more worrying is the fact that the current situation is expected to last longer, stretching the limits of entrepreneurs to an extreme. But, testing times like these also contribute to the emergence of new business models and leaders.
If you are an entrepreneur, looking to sail through this crisis, here's a list of measures that will help you emerge victorious.
Understanding the consumers: Apparently, the COVID-19 pandemic has significantly changed consumer behaviour all over the world. And with the added risk of uncertainty, companies and start-ups are required to adapt to such changes. With massive job and salary cuts across the globe, consumers are looking to cut down on their expenditure. Products with competitive pricing are more in demand compared to those that were in the luxury segment. Therefore, if the start-up revolves around expensive products, offering a discount is certainly an appropriate option now. Another way to persuade customers to purchase is by improving the overall quality or adding value to the products. This will help in changing the perception of the customers towards the brand.
Right Product Mix
People these days are focusing on their fundamental needs, thereby only buying essential commodities. Therefore, new businesses that mainly sell non-primary goods should begin to consider including essential items in their product list. That will help them a great deal in garnering the revenue as essential items happen to be the need of the hour.
Discounts have always been popular, but today they are in vogue. As people look to save money and their future, the idea of bulk purchasing is getting popular. Instead of going out to purchase commodities on a regular basis, people would prefer stocking it up for the long haul. This gives them a sense of security with regards to the daily supplies and also an opportunity to get discounts. This could be turned into an opportunity by coming up with offers that extend discounts on bulk purchases. Start-ups can easily reduce the price of the products while mentioning a minimum purchase amount. It will allow customers to buy in large quantities and also help in getting orders much faster than before.
Focus on Company Culture: Many companies and start-up businesses are responding to the call of the hour by adapting to the quick cultural changes in the workforce. Remote working practices are in full swing that is helping in ensuring the business continuity. Albeit this is a testing time for the businesses, and it will also serve as an excellent opportunity to discover what the company culture is actually like. Moreover, many believe that the Work-From -Home might become the new normal. It is particularly economical for start-ups as it will help them in saving on office space as well as on salaries. According to a recent poll, about 69 per cent of offices said that the world post-pandemic would likely want less physical and more digital workspaces.
Although these unfortunate times have caused much disruption in the functioning of start-ups, it has also helped the global community to come together in whichever way possible. The time is now that start-ups and entrepreneurs take refuge in digitalization post-pandemic.
Factors that need to be considered:
Migrant Labourers: Migrant labourers are the backbone of every economy. Unfortunately, in this pandemic they have been the worst impacted. As they travel back to their homes due to joblessness in the cities, the biggest impact could come on start-ups as they may face supply chain issues once the economy gets back on track. While the bigger companies will have the budgets to get their workforce to work and stay at their premises, the start-ups may need to figure out a strategy to ensure that their business is not impacted due to lack of ancillary service providers.
The Role of Banking: Banks and other financial lending institutions have the capacity to play an indispensable role in shielding the businesses from the possible downturn during this period of crisis. Many customers that inevitably include several businesses and start-ups are confronting urgent financial requirements. The actions, transparency, and communication of the banks can point towards stability and security that will ensure the customers that services will continue even during the crisis.
This is the time for the banks to traverse the extra mile for their borrowers and customers and strengthen the relationship. As cash crunch is one of the biggest impediments now, the banks should temporarily remove payments on loans and fees on transaction services. Different lending institutions should step forward to offer additional credit programs, that is, short-term credit extensions and new credit lines. Moreover, they can also share relevant objective information pertaining to economic and political developments that will help those businesses in weathering the crisis.