Entrepreneurs today are focusing on the financial challenges posed by COVID-19. Companies, no matter how digitalized, need to look beyond the immediate liquidity issues. What lessons has this pandemic given to prepare for the “new normal”? How can we enable businesses to thrive in a post-crisis world? These are some essential things to tackle the 2020 crises in entrepreneurship for the future.
The First Phase of Planning
Adaptability will be critical to a business’s survival. Be prepared for the worst. Readjust if the situation improves faster. Startups should assume that all these three things will happen. Receivables will get delayed. Consumers may want discounts on services they’ve availed of. Contracts will not close at the last moment. The experts say communication with the team is vital in aligning goals. Startups should hold weekly meetings with the core team to discuss runway and cash burn. For most startups, the priorities should be liquidity, business continuity, and employee safety.
Be Patient, Funds Will Be Hard to Come By
Right now, any startup’s aim should be to have 12-18 months of cash in the business. It will be tough to raise funds. But still, numerous investors are searching for opportunities to give funding and earn a return. In order to triumph over fundings, startups have to understand the process of pitching business ideas to investors. With the increase in macroeconomic risk, valuations will reset. Many investors may not think regarding growth at any cost. They will focus on consistent growth with an aim towards profitability. So, adjust your business plan and messaging.
How to Delight Customers in the Pandemic?
2020 is not an ordinary year, due to social distancing or quarantine lifestyles, people’s habits and priorities have been altered. To acknowledge the change in lifestyle, businesses can offer at home necessity products or services temporarily. The temporarily offered products/services could be a trial version of your main product. This will bring in some revenue at present and also will boost up the brand awareness for the long term.
Assess Risks and Work Around Them
The business environment of 2020 has been hit hard by the Pandemic so founders must have some specialized members of the team. They should focus only on risk management. The primary aim of risk management is to create a framework. It allows the company to be proactive rather than reactive. It assesses the macroeconomics trends in the market. While assessing impact, go one layer deeper. See if it has affected your consumers and their operational sectors.
“In the middle of difficulty lies opportunity.” – Albert Einstein
Embrace the New-Normal
COVID-19 has given reason for more and more businesses to pivot their strategy and find ways to make remote work applicable. Employees are connecting with colleagues via collaboration tools and video-conferencing platforms.
Practically not every business can easily function with their employees working from home, but they need to adapt it gradually. Looking at the positive side of working from home is that there is a healthier balance between work and personal life. Also as an entrepreneur, you can hire a highly skilled or hard-working employee from any corner of the country or world as they will be working remotely.
An additional way of embracing the new-normal is through being online like never before. 3.81 billion people are using social media in 2020. It’s needless to state the importance of social media in business. Superior entrepreneurs know that the social media presence of the brand leads to a more trustworthy relationship between the business and its potential customers.
Take a Good Care of Your Piggy Bank
Cash is the king in any crisis. The opposite can also be true. A business left without money can turn into a failure. Look and analyze the cash flowing now. Based on low revenue scenarios, calculate the runway. You don’t have to do everything yourself, your business must have a financial advisor, and if not it’s time to hire one.
Entrepreneurship is not easy, you don’t have to just take care of the business asset but also care about personal finance. Well, expenses are never under control but a sensible option could be opening a recurring bank account. In a recurring bank account, a specific amount of money gets deposited automatically every month. Set a time to check the deposit each month.
Right now many aspects may look bleak. In the crisis, work isn’t regarding finding out the optimal choice now. The work is to find the choice that is the least wrong. And this choice may still hurt you. But it will be less than the other choices you have with you.
We may conclude that with proper initial planning, exploring funding options, satisfying customers, assessing risk, and coping up with the latest business trends will help entrepreneurs to tackle the crisis. The lockdown and pandemic will fade away gradually, but until that day, entrepreneurs surely have an opportunity to influence the outcome and come out even stronger.