This is actually an email we wrote to our Startup Founders at the start of the COVID situation. We are sharing it publicly in the hope to help more Startup founders who are facing difficult times.
By now you have probably read all the news on how Covid-19 is impacting the economy – both globally and locally. Some of you may have already felt the pinch, while the others are bracing for the impact to come, or you might be one of the few businesses that stand to benefit from this crisis. The magnitude and speed of impact will very much be dependent on the industries you are serving plus how strong your business foundation is.
We understand the stress you are facing – be it with your business or family. Whichever stage you are, we would like to offer 8 very practical guidelines for you to manage this period of uncertainties.
1. Taking care of yourself
You are a core essential part of your business equation and hence, you have to take care of yourself by eating right, getting enough rest, exercise/meditate. By staying optimal during this period of uncertainties, it can help you make the best-evaluated decisions when needed. A clear mind ensures an intellectual rigour decision.
2. Taking care of your team
While we are all working remotely, this does not mean the team engagement has to stop.
- Have a daily 15-30 minutes morning sync up meeting with your entire team to prioritize everyone’s focus and boost their morale.
- Quick 5-10 minutes check-in with your respective team members personally daily (If you have a large team, do delegate this to your respective team leads).
- Besides work progress check-in, find out how they are doing on the home front/personally. This will go a long way for you in building employee loyalty.
3. Cash runway
Is your runway sufficient to withstand a few poor quarters in the event the economy takes much longer to recover? If not, it is time for your review your contingency plans and review areas where you can cut costs. Spend wisely and forecast for the gloom scenario so you are aware of what your options may be to tide you over until the economy recovers.
If you plan on fundraising in the next 6-12 months, do be prepared that your fundraising process may be more challenging than usual due to the market conditions. However, (a) companies that managed to persevere on during the gloom market, and (b) founders that are on top of the numbers – be it forecast vs actual, metrics reflecting on business performance will give the future investors the additional confidence on the company and leadership.
5. Sales Forecasts
If your company is not one of the few businesses that stand to benefit from this crisis, it would be wise to revise your sales forecasts (base vs stretch) to reflect the current market conditions. Map out the different scenarios so when the time comes, you are more prepared to handle it.
This is the time to really relook at your P&L and ask yourself which are the expenditures and projects you can afford to cut down / delay / maintain so that it is business as usual for you OR without hampering your planned growth initiatives. This exercise will help in the event things turn downward, you are able to decide quickly which are the first ones to go.
7. Be Realistic. Ask Yourself the Hard Questions
Who are your customers? What do they need the most during this crisis and are you able to meet their needs or provide value accordingly? Is your product & services a core item or secondary? Can their business run without your product & services? How lean can you operate without affecting your business input/output? How adaptable is your organization to such rapid changes? If your answers do not give you the majority confidence, it is time for you to sit down and work on your contingency plans.
8. Opporthreat (Finding Opportunity in Threats)
There might be things that could not have worked in normal situations but may / can work in the current situation. After the dust settles down, winners will emerge, whereas other startups will fail. In this situation, running a business is not a sprint, but a marathon. Those that don’t burn out will capture the market in the end.
Unfortunately for us, this is not the time to be business as usual (BAU). Founders should definitely take time to reflect and plan on the points above. Every challenge presented and how well you are able to address it reflects on how well planned you are despite the uncertainties. A well thought out scenario planning not only gives you the edge to act quickly when needed while your competitors may be scrambling for their plan, but it also instils confidence to your team/clients/investors that you are in control and doing the best you could.
Lastly, we would like to encourage you to reach out to your respective mentors for guidance during these trying times. Our mentors have gone through difficult times during prior 1997-99, 2007-2008 financial crisis. Do seek out their inputs on how they manage to survive and turn their business around. Also, feel free to reach out to below if you have further queries. We are happy to support you.
Stay healthy, hustle on and we will see you on the other end!