As of April 20, The COVID-19 has already affected over 200 countries around the world. The pandemic outbreak has a growing impact on the global economy since it is confronting every level of the world economy. The scale of The COVID-19 crisis reminds people of the 2008 financial crisis by pushing the world into a recession. Even though small businesses and startups are particularly vulnerable to this crisis, tech giants like Apple are also starting to feel the consequences of the pandemic.
We put together some tips that can help you protect your startup and survive the COVID-19 economic crisis.
Cash is King
It goes without saying that the vast majority of startups fail due to money-related issues, and this is particularly true during the economic crisis. To maintain a steady cash stream throughout the downturn, we are recommending either to start thinking about fundraising or revenue or prepare a plan to conserve cash. Angels will continue to invest but expect to receive smaller investments.
Even if we solve the COVID-19 pandemic much sooner than expected, the following recession will continue to impact the economy and society, and it will take years or decades to resolve. Make sure that you have at least 12 months of cash on hand. Try to be creative and resourceful by thinking of ways to get government grants. Don’t forget to explore the SBA programs that have been created to help small businesses.
Be Part of a Solution or Go Into Survival Mode
If you have the possibility to adapt your business to be part of a solution to the COVID-19 pandemic, shift your energy and resources in that direction. Even giants like GM and Ford closed their plants and teamed up to make ventilators and respirators. We recommend you to think of an idea or a product, something that will make people’s lives better during this difficult period and will serve as an opportunity to help your startup survive. Make sure that your potential customers can find you online.
Again, if you want your startup to survive, make any step that will have a permanent impact on your cash balance.
Make Sure Your Customers are Happy
You need to make your clients happy, even during the crisis. We recommend creating online learning courses, online consulting, things that could bring a smile to your clients’ faces in these stressful times. Since most probably your clients are also facing the same headwinds, the great ways of keeping your customers happy are delaying price increases, allowing contract extensions or downsizing contracts. Remember, we are all in this together.
