How to survive the economical crisis of 2020 as a startup
2020 turned everything quite crazy, right?
You are lucky if your team is feeling well enough these days. It is possible when you’ve been working for several years and got financially stable, or even have some extra balance for such cases. That means you are ready to overcome the challenge with as little trouble as possible.
However, let’s stay real: there is no good time for a crisis to come. It is never easy, even when your team is young and enthusiastic, and especially if it is newborn.
How not to lose control of your business during the pandemic?
According to the United Nations report, the world’s economy will shrink by 3%, and the gross domestic product in developed countries will plunge by around 5%. That means that even when working hard, you might not reach the same income because the majority of clients will not have the possibility to charge enough.
Nowadays the general demand is falling. So it would be smart for a startup to scale down the resource input while scaling up the profit.
Let’s take a look at some ways to do that. The following points may sound somewhat revolutionary. However, we are sure that the pandemic is only speeding up the changes which were anyway determined by the progress. That is why there isn't actually anything to be afraid of.
Adapting to the new economic reality
It sounds hard to survive a global crisis as a small startup. Although, you can take it as a great chance to evolute with the whole world. And to do that faster than any stable oldschoolish company.
The point we are going to focus on may seem quite radical. Look at it from the perspective of your realities and try implementing partly or fully. We are sure that holding an office is not a need anymore in 2020.
Forbes notices that when renting an office (which is a huge expense itself), companies charge giant sums into services and equipment. In the US it comes up to millions per year for a single company.
Also, the Harvard Business Review recently looked through the pros and cons of working remotely. The point we would like to mention here tells that workers get a proportionally higher salary when moving to places with a lower cost of living. It is often possible when working remotely. And it costs nothing to the company itself.
We know it can be hard to stop using a common workspace completely. It may be a good case to have an office in the form of a hub. In the Leadership in Spaces and Places, authors say that “the future office will be more of a place for cooperation instead of work alone -- a hub instead of an individual retreat”. The question to ask here is: do we need these hubs regularly and for the whole team? Probably, not.
The solution is to understand how many workers your business needs in one place at the same time when collaborating, brainstorming, etc., and how many extra places you might need regularly. It is really not necessary to hold everyone in the office from Monday to Friday. Technical departments are usually the easiest ones to work with remotely. All you need here is a good manager to be in touch with both sides.
During the last period, lots of companies started firing workers to get rid of extra expenses. It helps but let’s be honest: scaling your business down from its very beginning doesn’t sound much like a winner’s strategy. Limiting the input, you may lose a huge amount of money that might have been earned.
Act smart: manage, filter, delegate.
Recently, we collaborated with a Belgian logistics service. They already had an in-house team busy with service management, communications and partnerships building. They needed an actual web application to make things work. Surely, they could have searched for local web-developers, form a team, rent and fill a new office space… But they had a priority on terms and certain budget limits. So they tried hiring remotely, came to us and we successfully launched an app very soon.
As a result, they got a huge profit. Without the need to manage teams and spaces, they communicated with a project manager here, described all their requirements and felt free from the organizational headache.
You can imagine how much they saved up on this deal. Time and effort: because they didn’t need to hire and check a new team person-by-person; finances: because they didn’t need to support an office in Belgium but hired a ready-made remote team from Eastern Europe.
Hiring a remote tech team can help you profit finely, especially when your company has several main departments responsible for creative or strategic processes.
Make sure you fit each other
Of course, it takes less effort to hire a self-managing team. Moreover, it saves a ton of time in further perspective. But that is important to figure out how your collaboration will go.
Talk about all the cooperation details ahead. Prepare a list of questions and requirements for your first interview not to miss a thing. In Fivewalls we always have a list of things to approve with our clients and it never failed.
It is absolutely fine to understand you don’t fit each other. That happens sometimes because of irrelevant expertise for a certain project, etc. Sometimes you can fix certain points, sometimes you just wish good luck to each other. Anyway, it is always better to figure things out before starting.
Keep calm & carry on
No doubt, we all are facing a hard period this year. But generally, the world’s economy has never been stable. About a hundred years ago we had the Great Depression in the US and multiple wars all around Europe. The society came over that with a huge amount of experience. The pandemic should not stop you in going towards your goals. Accept the challenge, go on, do what you believe in.
We are always here to help you in releasing your ideas.
Say hello on [email protected] if you need a nice remote team for your project.
All the best to you and your projects!