How Start-ups Can Make It Through This Economic Recession
Posted 15 Jul, 2020
Author - Priscilla Aimila
How Start-ups Can Make It Through This Economic
Right now, many start-ups are experiencing a downturn. For those who have
poured their lives into their business, this will undoubtedly feel frustrating
and disheartening. But here is the truth: You can get through this.
Navigating the impact
of the Coronavirus will not be easy, but with the right preventative measures,
start-ups can position themselves to ride out the storm. Below are a few important
takeaways from Jack Newton, the CEO and Co-founder of Clio, who experienced the
full brunt of the 2008 economic crisis few months after he launched his
Start-up. These tips will help your start-up not only survive this recession
but will position it to thrive on the other side of it.
1.Be an irrational
The current economic landscape is challenging, and it is going to make
running your new business even tougher. To get through, you will need to cut
company spending, adjust business goals, and make hard decisions. But ultimately,
it is crucial that you stay optimistic and keep your eyes on the future, for
the sake of your team.
The odds of success for start-ups are low even at the best of times, so
if you are not irrationally optimistic, you’ll likely give up. You need to
convince people to bet on you—customers, investors, and your team. The start-ups
that make it through will be those that face challenges with enthusiasm, so
their team members can hold on to a brighter vision of your company’s future on
the other side of this pandemic.
The odds may seem impossible, but as a company leader it is up to you to
stay pathologically optimistic and ignite confidence in your staff. Of course,
you will still need to accept the hard, sobering fact that we are in
an economic downturn. But alongside that awareness, staying relentlessly
optimistic in the face of what might seem like a hopeless situation will give
your company the fuel it needs to survive.
2.Experiment and act on insights quickly
Creating a business strategy that is successful for you will always be a
trial-and-error process. But in this financial climate, you will need to create
some discipline around the strategies you are trying out and move quickly based
on what you learn.
It is crucial to invest in and experiment with new strategies to see
what works. Maybe it is a six-month stint of paid advertising on a social
channel, or the development of a new hybrid job role that blends marketing and
administrative duties. What matters is knowing when these strategies are and
are not providing return on investment (ROI) and developing concrete guidelines
to decide what to do next.
If the social media ads are not proving successful after six months,
take a critical look at what adjustments can be made or stop spending money on
ads altogether if you cannot invest in improving them. If your new administrative
employee is enjoying the balance of their duties but feels overworked, consider
hiring a freelance receptionist or designer to help with the workload.
These strategic experiments are critical for finding out what works for
your organization; it is key to double down on those that are successful and
cut your losses (early) when an approach is not proving to be beneficial.
3.Spend it like it is your own
As an employer in today’s job market, it is easy to feel like offering
the best perks is essential to attracting the best talent. But the best
corporate culture is not driven by the flashiest perks. To attract talent, you
need to provide benefits that matter—those that show a high level of support
and understanding for your employees.
A good rule of thumb for you and your team is to spend company money
like it is your own. During a recession and global pandemic, the benefits you
offer may change, but the intention behind them does not have to. Developing
this mindset at the start of your company’s journey will be beneficial in the
4.Do not be too hard on yourself
The economic situation we are facing now is unprecedented. Not only are
we managing financial setbacks, we are also facing an entire cultural shift in
how we work, communicate and live. COVID-19 is testing businesses in ways we
could have never imagined or prepared for. Which leads me to my last point: Do
not be too hard on yourself.
We are all navigating a new business landscape with a multitude of
competing priorities. Stay focused and grounded but give yourself moments to
reset. Make time for the things you enjoy, like reading or cooking or movies to
stay balanced. A clear and level mindset will translate into the strong
leadership your company needs from you to be successful in the long run.