News By/Courtesy: Sneha Suresh | 31 Jul 2020 15:58pm IST

HIGHLIGHTS

  • Need to re-plan and adopt to Covid World
  • Cash management and valuation uncertainty
  • Dynamic markets and need to take a decision

Until the COVID-19 war is won, survival has to be the prime focus for startup businesses. Let’s take a look at a few tips for startup businesses and their owners and managers to help them get through the crisis and stay in control of their companies.

This pandemic is extremely different from the financial crisis in 2008. Not all firms are on the losing side, with the value of some companies going up on the stock market and particular businesses experiencing more demand than they were prepared for. In fact, some companies are looking to hire!

But on the other hand, many businesses are suffering and struggling to cope. Their usual supply and distribution channels aren’t accessible, have been temporarily closed or there just isn’t enough demand for their products and services.

Issue 1: Cash Management
One of the biggest challenges faced by small businesses is cash management. Companies need to be prepared for extended periods of lockdowns and preserve cash. There is a very high likeliness that investors won’t honor deals. Valuations are significantly down so getting money into businesses is going to be difficult.
Cash-Poor startups aren’t likely to be as distracted by end goals by engaging too much in side-projects and can focus on their core models.

Issue 2: Valuation uncertainty
Valuations in the current market are very dynamic and will have a direct bearing on investor’s decisions into businesses and so the owners need to have a realistic approach. If possible, it may smarter to wait until the market has cleared the impact of the pandemic and stabilized before raising money again.

Issue 3: Adapt and Change 
Pivoting your business model is a smart and advisable decision to take. With the dynamic market, ever-changing circumstances, several firms in various sectors are moving in the way they offer their services to accommodate the different customer bases, especially during this crisis. An example is an online platform, from education to groceries, online modes of delivery are one of the most popular and required services during the pandemic  

During a crisis, is when strategic management practices and fair stakeholder treatment is especially visible and necessary to survive. Making quick transparently and equitably will have positive impacts on your business for a long way to come.


In times of crisis is when one needs to step and take action, adapt to our new reality, and make efforts not just to survive but thrive.

This article does not intend to hurt the sentiments of any individual, community, sect, or religion etcetera. This article is based purely on the author's personal opinion and views in the exercise of the Fundamental Rights guaranteed under Article 19(1)(A) and other related laws being enforced in India for the time being.

Section Editor: Pushpit Singh | 31 Jul 2020 22:46pm IST


Tags : Business

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