The COVID pandemic has been helpful for some businesses, such as tech companies functioning remotely. We tend to hear the word ‘recession’ very frequently these days. The loss of economic activity leads to rising costs.
A recession leads to decreasing sales for companies. Due to this volatile situation, it becomes hard for startups to get funding opportunities. One of the scariest consequences of a recession is the lack of opportunities for startups to grow.
However, we can use some tips to sail through these testing times.
Promote adaptability
The COVID 19 pandemic changed the world within a year. Business founders never thought they would have to readjust in such a short time. Due to constantly changing circumstances, the recession of 2022 hit us like an unexpected storm.
Therefore, one should always have a strategy. Plus, discuss the importance of being a multi-tasker with your team. Do not restrict your employees to one type of work. With a startup, it’s crucial to have employees ready to try new things. This kind of approach might not help in the long run.
Team members learn about their strengths and weaknesses when working on different tasks. Plus, it shows their willingness to learn and mold themselves according to varying situations. Moreover, as a startup leader, you must make employees feel safe.
- Start looking for automated solutions for specific tasks.
- Boost your employee’s morale and creative energies through informal meetings
- Companies should consider hour reductions and more flexible schedules
There are better alternatives to firing.
Now, this is the scary part. However, it is inevitable when a recession hits the economy. Organizations have to make quick and logical decisions. In such circumstances, layoffs do happen. However, this is not the only way.
At this point, the startup leader might feel they have exhausted most of their options. Loss of capital and lack of resources add to the burden. Hence, sometimes, action must be taken quickly for the business to survive. Again, the startup founder must consider options that can be better for the future.
- Rather than directly firing employees, startups can grant compensated leaves.
- Start to renegotiate contracts with vendors due to the situation.
- If circumstances are too severe, then consider laying off.
Hold on to that cash!
Since the company could be at a sensitive stage, the primary focus should be on saving capital. Money is necessary to keep the roots of a startup cemented. This cash would help you survive until the next round of fundraising.
As soon as you start protecting your assets, wait for some time. Now, this will demand resilience and patience. Once the market stabilizes, the startup founder can think of the next step. With this approach, company assets remain secure.
- Collect your payments before its too late
- Cut down on unnecessary expenditures such as unused subscriptions, memberships, etc.
- Start researching disaster relief options for businesses, such as Facebook grants.
Rethink your marketing strategy
Marketing is integral, yet one shouldn’t overspend on it during such a difficult time. Utilize your team and ask workers to compile a report on suitable marketing channels.
Once you figure this out, the next step is to cut down the extra costs spent on the market. With this approach, the founder can save the startup budget. Another factor is to focus on marketing projects that give quick returns.
- Emails are one of the most cost-effective methods to stay connected with clients.
- Stay active on social media platforms like LinkedIn, Facebook, and Twitter.
- Build strong relationships with your existing customers.
Conclusion
After some time, investors would be willing to invest in businesses. Be patient and smartly grow your company until that time comes. According to Zapier, 74% of businesses surveyed in a 2021 survey said that automation helped them prepare to handle unexpected crises. Therefore, startups should always keep developing new techniques and strategies according to the ever-changing state of world affairs
At Gaper, clients work with remote software engineers from all over the world. Thus, online tools such as Notion and Google meet have been quite beneficial in increasing productivity. With the current state of warfare, rising fuel prices, and changing nature of workplaces – startups should be ready for sudden changes in the future.
How to navigate a recession as a young startup in 2022
The COVID pandemic has been helpful for some businesses, such as tech companies functioning remotely. We tend to hear the word ‘recession’ very frequently these days. The loss of economic activity leads to rising costs.
A recession leads to decreasing sales for companies. Due to this volatile situation, it becomes hard for startups to get funding opportunities. One of the scariest consequences of a recession is the lack of opportunities for startups to grow.
However, we can use some tips to sail through these testing times.
Promote adaptability
The COVID 19 pandemic changed the world within a year. Business founders never thought they would have to readjust in such a short time. Due to constantly changing circumstances, the recession of 2022 hit us like an unexpected storm.
Therefore, one should always have a strategy. Plus, discuss the importance of being a multi-tasker with your team. Do not restrict your employees to one type of work. With a startup, it’s crucial to have employees ready to try new things. This kind of approach might not help in the long run.
Team members learn about their strengths and weaknesses when working on different tasks. Plus, it shows their willingness to learn and mold themselves according to varying situations. Moreover, as a startup leader, you must make employees feel safe.
- Start looking for automated solutions for specific tasks.
- Boost your employee’s morale and creative energies through informal meetings
- Companies should consider hour reductions and more flexible schedules
There are better alternatives to firing.
Now, this is the scary part. However, it is inevitable when a recession hits the economy. Organizations have to make quick and logical decisions. In such circumstances, layoffs do happen. However, this is not the only way.
At this point, the startup leader might feel they have exhausted most of their options. Loss of capital and lack of resources add to the burden. Hence, sometimes, action must be taken quickly for the business to survive. Again, the startup founder must consider options that can be better for the future.
- Rather than directly firing employees, startups can grant compensated leaves.
- Start to renegotiate contracts with vendors due to the situation.
- If circumstances are too severe, then consider laying off.
Hold on to that cash!
Since the company could be at a sensitive stage, the primary focus should be on saving capital. Money is necessary to keep the roots of a startup cemented. This cash would help you survive until the next round of fundraising.
As soon as you start protecting your assets, wait for some time. Now, this will demand resilience and patience. Once the market stabilizes, the startup founder can think of the next step. With this approach, company assets remain secure.
- Collect your payments before its too late
- Cut down on unnecessary expenditures such as unused subscriptions, memberships, etc.
- Start researching disaster relief options for businesses, such as Facebook grants.
Rethink your marketing strategy
Marketing is integral, yet one shouldn’t overspend on it during such a difficult time. Utilize your team and ask workers to compile a report on suitable marketing channels.
Once you figure this out, the next step is to cut down the extra costs spent on the market. With this approach, the founder can save the startup budget. Another factor is to focus on marketing projects that give quick returns.
- Emails are one of the most cost-effective methods to stay connected with clients.
- Stay active on social media platforms like LinkedIn, Facebook, and Twitter.
- Build strong relationships with your existing customers.
Conclusion
After some time, investors would be willing to invest in businesses. Be patient and smartly grow your company until that time comes. According to Zapier, 74% of businesses surveyed in a 2021 survey said that automation helped them prepare to handle unexpected crises. Therefore, startups should always keep developing new techniques and strategies according to the ever-changing state of world affairs
At Gaper, clients work with remote software engineers from all over the world. Thus, online tools such as Notion and Google meet have been quite beneficial in increasing productivity. With the current state of warfare, rising fuel prices, and changing nature of workplaces – startups should be ready for sudden changes in the future.
