It’s been two weeks since the lockdown began here in India. News reports of doom and gloom pervade the airwaves. The stock markets have fallen, millions of dollars of net worth wiped out, the un-organized sector is hit hard due to the large scale migrant worker exodus. From our friends and family, real-life stories emerge of high- performing employees being laid off, people winding up startups and trying to get back to corporate life, small business owners unable to pay employees in these testing times. There’s very little good news coming our way. Startups and small businesses have felt the deepest impact. Business losses, cash crunch, and the looming uncertainty of when the lockdown will be over are all contributing to higher stress levels amongst business people.
The last week for me personally, has been a wakeup call, with a large number of friends and family expressing their fears of the economic impact. As a friend of mine put it ” Do I have any prospects left anymore?” that got me thinking. First that We need to come together to help each other in these trying times, sharing our knowledge, opening our contact lists and helping with whatever means at our wherewithal. Secondly that a basic roadmap to resetting business may help. I expanded my marketing consulting practice in 2008, right after one of the biggest recessions in the world. No one expected it to survive, but it did survive and thrive. Here are a few tips on how to reset for a post- corona world, based on the lessons learned then.
When in doubt use First principles. Let’s try reasoning from first principles, break this complicated problem down into basic elements and then reassemble them creatively.
Principle 1: Uncertainty is a constant.
Investopedia states that approximately 20% of new businesses fail during the first two years of being open, 45% during the first five years, and 65% during the first 10 years. So chances of a startup or small business going under are pretty high anyway. Any startup- founder worth her salt knows this.
So while Corona has added to the uncertainty, there’s no point in worrying about something that so far beyond one’s control anyway. You may say dear reader that this is easier said than done. While we all are aware of this principle, being present to it, and finding ways to beat the stress that comes from it are also needed. One effective way to beat this uncertainty fears to pin your belief in Faith. By faith, I don’t mean only religion. While Religious beliefs do give people a strong support system during tough times, it’s time to start working on your faith in yourself. Building your self-esteem and self-discipline might be the best practice to follow. Meditation, sports, hobbies, exercise, whatever your method of being more centered and stress-free to build on it to break the cycle of stress
Principle 2: What business are we in?
My first job, was at the ad agency Enterprise-Nexus, during the late ’90s. The first 6 months there, was” boot camp for life”. After our normal 10 hour workday, all of us (trainees ) had to attend 3-hour lectures, followed by projects, assignments, etc. I was run ragged, but the learnings then have stood me in great stead to this day. One catchphrase our guru Raghunandan drilled into us was ” Is there a gap in the market? Is there a market in the gap ?”. I invite you to ask yourself this question. Step away from the fancy projections you shared with VC’s and ask yourself with complete honesty. Is your startup in the right niche? Have you timed your market right ?. What impact will corona have on your competitors? Is there a viable gap in this market? what steps do I need to take post-lockdown to remain viable?. (Altius has a checklist created specifically for this challenge. if you would like to use the Altius template for business viability click https://mailchi.mp/69a1d4b6dee7/altius-checklist).
This is the time to take a good hard look at the business, your priorities and take a call on whether you wish to continue business as usual or change tracks. Introspection, reflection and your chosen mentors advice on what your next steps should be, whether its business, as usual, time to pivot, or changing some terms, whatever the decision may be, you will be ahead of others on this curve.
Principle 3: Cash is king.
This is a constant of business regardless of size. Those who have good control over their cash flow and know how to avoid over-reach have the highest chances of coming out on top at the end of this pandemic. There’s no rocket science to cash control Optimize Spending, ie spend on essentials, not on luxuries, put aside big expenses till you have a couple of good quarters, rent items rather than buying them, re-negotiate with all vendors are steps that will help you much needed cash.
This is also a good time to shore up the other end of the cash spectrum, the input. If you have raised some funding, this would be a good time to get on calls asking your investors to take charge as your de facto senior sales team. If you run a bootstrapped startup, this is a time to relook at how you can add some angel investors or cash infusion. Relook at all sales and marketing plans, no dollar goes out unless it comes back bringing a couple of its friends.
Principle 4: Keep your customer close.
Keep your employees closer.
Two of the biggest stakeholders of your business need reassurance during these times. Customers need to know that you will provide much-needed services and goods, to keep their lights on. While employees need to know that they will still have stable paid employment at the end of this trying period. With both these stakeholders, you need to be in constant, honest communication.
For employees, this is the time to step up and show your empathetic side. Given the nature of the crisis, you may need to let some people go. Help them handle this transition, offer a decent benefits package, make available counseling services for employees dealing with job-loss. Nope, it’s not that expensive, and it’s worth investing to retain key employees, who will be watching your treatment of their colleagues very closely.
For customer’s its time to explain honestly, the state of the business and the steps being taken to ensure no outages for customers. Assure them of timely delivery of goods and services, once the lockdown is lifted. When appropriate share the steps you are taking to mitigate outages. Ask for support and build a human connection with them. These folks are the ones who will keep you afloat.
To sum it up, there is no business as usual post-Corona, the sooner we put systems in place to tackle its impact the higher the probability of success. To this end, I am putting together a Cohort of startups& mentors to help one another during the aftermath of Corona. The aim is to bring together like-minded folks who can support, counsel & help each other’s business during the next two quarters. Do email me/ reach out to join in.