How start-ups should respond to COVID-19 business challenges

On the occasion of National Technology Day, Ratish Pandey, Business Coach, spells out a couple of pivot points which start-ups may consider to ride through this crisis.

The pandemic, Coronavirus, has created a health crisis across the world, severely impacting economies in its wake. India is currently reeling under its influence. We have started feeling the impact and is likely to get worse before the recovery begins, the pace of which is yet indeterminate.

One important and growing segment of our economy of the last few years has been the start-ups, who by the very definition are enterprises started by entrepreneurs to seek, effectively develop, and validate a scalable business model. This model of business relies heavily on funding. Funding in the current scenario of economic crisis and uncertainty is likely to be scarce. So, where does this leave the start-ups, is it the end of the road for them? No, it is not, but it is the time for them to tighten up their shoelaces.

Here are a few pointers, for the Start-ups, to consider during these tough times…

In the face of uncertainty of funding, the first and foremost focus is the Runway—taking stock of one's funds. Concentrate on optimizing to make your funds last longer—'lengthen your runway'. This would involve reviewing costs, overheads and inventories. Identify what can be reduced and mobilized. Undertake scenario planning, plan for the worst while hoping for the best.

Your People are your biggest asset. In the current scenario, they are a scared and insecure lot. Worried about their job, the virus, their safety, their family's safety, in general, they are worried about everything. You need to lead with focus and positivity. Set new standards, new and incremental goals. You may need people to do new and different jobs, which may require repurposing your team.

While COVID-19 has caused the economy to tailspin into a downturn it has also opened up new opportunities.

There are two Pivot points for a start-up to consider…

One, is there a new need or demand in the market that you can cater to with your current set up? If so, quickly move to create the new offering, reach out to your existing or maybe new customers.

Two, reflect on what is needed to be changed in your existing portfolio to stay relevant in the changing market situation. It could mean, repackaging or repositioning your offering, exploring a new segment or working in conjunction with other startups, till things lookup.

During this tough period investment in Marketing is a must. It is imperative to stay in communication with your customers, investors and your suppliers to keep them vested in you.

Startups need to continue to explore alternate Funding options. Alternatives such as Venture Debt Funding models are some options. This will help stretch your runway and keep the businesses on the growth path.

Finally, it is important in these tough times that Entrepreneurs leading start-ups, maintain a positive mindset. They need to adopt whatever method that works for them to attain this mindset. Lead from the front, keep connected with your employees, your customers and your suppliers, you will get your business back on track primed for success.