With a worldwide pandemic and a budgetary emergency, founders are defied with the reality of sustenance. The world has quickly moved under the entirety of our feet. Apparently medium-term, the monetary discourse has changed from estimated certainty to cloudy confusion. In case you are a startup owner, this will probably be one of the most challenging atmospheres you’ll ever confront. The best way to live-up your organization is to do things differently as an emergency requires being present and thinking in an unexpected way.
Although I have not faced such similar situations in the past, however with the 11 years of Entrepreneurial experience – here I’m laying down the critical paths which are:
- Stabilizing Financial Health and Accounting the losses
- Strategizing groundwork:
- Stabilizing Mental Health:
Stabilizing Financial Health and Accounting the Losses
This will be the most troublesome and challenging thing you do as a CEO since it includes a number of associated factors and outcomes, however, it’s regularly less about the ‘what’ aspect of it and rather more on the ‘how’. Your compassion and speed are the keys here.
- Accept the SITUATION (The show must go on), poetize Cash Flow and Learn how to keep it moving
Assume things are going to be worse than you think. Your previous financial plan is likely to be irrelevant and so it’s necessary to change your plan to reflect the new reality. Prepare and plan for a worst-case scenario and be delighted when you exceed it.
- Assume you WILL NOT generate revenue or raise FUNDS too soon.
Whatever actions you’re planning or doing; keep yourself in an assumption that funds flow during a situation is frozen and it may take time. So, it’s better to work on existing assignments/orders and bring them to closure.
- Focus on your team retention- Layoffs and pay cut decisions to be taken AT THE EARLIEST ONLY IF SITUATIONS ARE CRITICAL
As a leader, it is important to focus on a ‘we’re together, we’ll fight it out attitude’ to ensure team unity. Guide members more dedicatedly than before – help them deliver their best as their state of mind at home may not be the best. Now payoff or pay cut could be a very disappointing and non-sympathetic situation but let’s face it – if you’re someone who thinks you cannot afford to have staff without outcomes for X-number of months – then it’s better to make the decisions quickly. Similarly, if there is a projected delay in salary or such – keep your team informed of the upcoming situations.
- Hire talent wisely.
Sometimes hiring qualified resources may help you go through a downfall situation. A lot of people may seek opportunities at this time – so if you think you need helping hands – lay down your expectations clearly and start your hunt for what’s missing in your team.
- Implement performance-based salaries, honour efforts and share the risks.
Mostly applicable in sales areas, hold board meetings to organize the salary structure and introduce performance bonuses and incentives to motivate them and get ready to plunge into a revenue-driven model.
- Refocus on the marketing of services with the highest ROI
Identify the services that involve the lowest client acquisition cost and gives the best revenue outcomes.
- Negotiate pay-outs, contracts and leases
Remembering the fact that your vendors or service providers are also going through a difficult situation – feel free to ask for cost reductions, adjustments in payment terms or such.
- Focus on faster payments from your customers.
Release offers, discounts, coupons and create your funnel fast – this is the time when you should ensure your customers make fast decisions.
- Assess all infrastructure costs and expenses
Ensure you budget your minimum sustenance cost and include the essential infrastructure costs including third-party software costs, utility bills and such.
This is where you would need to reset your focus, re-plan and re-organize your priorities and move closer to achieving outcomes together with your team.
- Identify massive supply/demand opportunities.
This is the best time to position your company for growth. Your large competitors are likely to be knocked sideways and unable to react. Many of your smaller competitors will be short on cash
- Build a high-performance culture
In a downturn, everyone must perform. This becomes non-negotiable. Hitting 95% of your goal is missing your goal. If you don’t have a strong performance culture — clear, measurable targets for everyone — then create one.
- Explain what you are doing and why you are doing it.
- Give everyone clear numerical goals.
- Be visible with metrics company-wide.
- Be fair — refocus and revise targets to be realistic.
- Follow your customer’s interests – fill the required gap
It is obvious that their business priorities and behaviour may change, however, you must follow the pilot smartly that fulfils their current requirements.
- 10X your product in terms of functionalities and inventory
If you’re able to fill the gap, ensure you have enough of supply. If you’re into some IT product or service enhance the quality and make it meet the current need. Examples – While building a portal for a crèche we were asked to include e-learning video conferencing facilities within it; as it was the need of the hour.
- Minimize fixed costs, have more contractual costs involved
Hiring in-house members to execute a job may sometimes be expensive if they are not managed well, consider having freelancers or contractual part-time team members that help you achieve your goals.
- Replace manual processes by automation
It’s critical to introduce MIS and CRM tools that help you manage your team, their output and customer data rather than excel sheet based management.
Stabilizing Mental Health
Health is wealth – it is important to ensure you, your family, your team and their families are safe, secure and in good health and not very disturbed about their career in the present times or days to come.
- Empathize with team members and increase team bonding
Team members must adapt to the situation and must not feel lost. Discuss problems, challenges and difficulties – ensure strong communication and group discussions/chats at intervals to ensure they do not feel the boredom.
- Engage your team, make them feel happy
Call people. Sing a song for them. Send them a funny GIF. Send them a virtual cookie. Use your imagination in crazy ways and show your care.
- Have candid and honest conversations
Keep your team well informed on the situation, your plan, priority projects, execution plans, expectations and keep your team involved in whatever you are trying to achieve. It should end up being a ‘we’ll rock this attitude’.
- Celebrate every story
Be it sad or happy – a small or major success share every bit of your story and complete the journey together.
Yes, indeed it is a crisis and an economic break-down but let us all settle and think on how we can start re-organizing things for better days ahead. All the best.
Arobit Business Solutions Pvt Ltd.
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