How can start-ups survive the coronavirus crisis?
Photo by Tim Mossholder on Unsplash
You have undoubtedly heard countless people state that we are currently living in ‘unprecedented times’. Despite it being uttered so frequently that it is quickly entering the realm of cliché, it is undeniably true.
We are all of us having to adapt to a new way of living, working, socialising and planning. The future is not as clear as it once was, and yet to sit still is by no means an option. We must all prepare for what is liable to come and be ready to alter our approach should it be required.
The small business conundrum
Of course, when it comes to running a small business, the issues and challenges associated with the ongoing coronavirus crisis are likely to be exacerbated. The majority of small businesses operated on thin profit margins prior to the pandemic’s arrival, and the fact that they have now been unable to run at full capacity for the majority of 2020, and given that there is no definitive end in sight, financial concerns are clearly going to be at the forefront of the minds of all small business owners and start-up bosses.
Research suggests that SMEs account for a staggering 99.9% of all businesses in the UK – which is estimated to be around 5.9 million individual firms – and in 2019 employed around 16.6 million people, generating a colossal £2.2 trillion. These businesses form the backbone of the UK’s economy, and it is absolutely crucial that such companies not only survive, but thrive, as we stride towards the future.
So, with that in mind, let’s take a closer look at what start-ups should be doing now, how they can set themselves up to be prepared for the future, and what the business landscape is likely to be like going forwards.
1. Manage your money
This is, quite frankly, the key priority. With numerous researchers and scientists suggesting that it may take around 18 months for any vaccine to be found and subsequently rolled out, preservation is vital. While once the focus may have been on how to grow the business, the emphasis for many will now solely be around survival; this means balancing the books, considering whether money is being spent unnecessarily, seeing whether there are grants available, taking advantage of furlough schemes if viable, and potentially even altering the overall business model so that it can continue to reap some kind of income during this time.
2. Put the hunt for funding on pause
Many start-ups require large amounts of funding so as to create the business’ foundations. However, now is arguably not the time to be hunting for funding. Investors will currently be thinking about consolidation rather than speculation, and therefore any prospector that does make the decision to invest will be very likely to offer a smaller amount than would be normally deemed acceptable, and will likely want a greater share of the business than usual as part of the bargain. If possible, keep clear of investments and funding for now, and wait until the market returns to some semblance of normality.
3. Be prepared to make tough decisions
There is no magic solution that will allow any business to survive if it is unable to operate. It may be the case that properties will have to be sold, employees will have to be let go or savings will have to be eaten into. These are, of course, by no means decisions that any business owner wants to make, but to refrain from making tough calls is only likely to be permanently damaging in the long-term.
4. Consider adaptation
Of course, the very best outcome is that your business is able to, in some way or another, continue operating. This may necessitate some business changes. You may need to put additional focus on your online offering, or you may need to pivot somewhat so as to provide different products, services or solutions. One of the biggest things that start-ups have going for them is that they tend to be built on foundations borne of creativity, ingenuity and experimentation, and there has never been a time more suited to trialling new methods in a bid to remain not only relevant, but appropriate for the current climate.
5. Get your house in order
Towards the end of 2019, a Direct Line Business research project concluded that ‘millions of small businesses’ were at risk should they experience a period of disruption.
While a global pandemic was not mentioned as one such cause of disruption, it is very clear that we are currently in the midst of a period of exceptional disturbance, and while this current situation is by no means the fault of any business or its owner, it highlights the value of being prepared for any and all disruptive eventualities.
If the current period has proved anything then it’s that preparing for the worst, no matter how unlikely, is a very sensible approach. Obtaining the right business insurance is absolutely crucial and can be the difference between a company going under and it being able to continue operating in the wake of a disaster, crisis or period of unplanned downtime.
To conclude
There is an array of challenges that all small business owners and start-up bosses must contend with over the coming months and, potentially, years. Focus must now be on survival rather than growth, and though difficult decisions may need to be made along the way, those people that are willing to face up to the reality of the situation and implement tough choices are liable to be those that will be on the best footing as we move forward.
With kind thanks to Hubert Day for writing this article for Business Biscotti, you can contact Hubert via email: This email address is being protected from spambots. You need JavaScript enabled to view it.
