The recent effects of the global pandemic have led to a new global recession. Managing a startup business during the Covid-19 crisis has been challenging, and as we emerge into the new normal, it calls Startup Business Scaling Strategy for new practices and tactics. Even the most well-established multinational corporations have been affected in these turbulent financial waters.
New business models face a greater risk of going under than ever before to these tough economic times. Although navigating the effects of the virus is by no means an easy task, it is possible to scale your startup in a way that will allow it to survive the storm.
However, with the proper preventative measures, you can protect your startup from being negatively impacted. Here are a few tips that will help you do this.
This article will explore the strategies you need to know to improve and maintain a business’s performance in tougher economic times. Implementing the tips can help your enterprise stay afloat and improve your business’s chances of surviving during a difficult recession.
Startup Business Scaling Strategy:
1. Proven Cost Reduction Methods:
Inevitably, startups may find themselves experiencing a dip in revenue, or their funding starts to
dry up. The initial move is to find out the many different ways to reduce costs. But what can entrepreneurs do? The first and foremost step in budget-cutting or streamlining is to examine unnecessary expenses, such as non-essential departments or projects that are performing poorly.
In addition, in the current era of working remotely, you should consider whether you require an actual physical space for your business activities. In the absence of physical space, you might be interested in creating a workforce entirely remote or joining flexible co-working spaces; both are great options to cut costs.
Another approach is to look at the various options prior to signing any contracts with financial institutions. For instance, if seeking office equipment such as computers or handy storage boxes for organizing documents and other things, it is beneficial to research the market and compare prices before making any decisions.
2. Choose Freelance Workers:
The ability to fill critical vacancies while making sure that costs are kept low in difficult times isn’t an easy task. However, you can accomplish this by getting your work done by freelancers instead of hiring permanent employees. They are widely available in various fields and they’re cheaper than permanent staff. Hiring freelancers may also offer your business greater flexibility for projects. For companies to control their employment arrangements in a more flexible manner, remote workers are the best talent available.
Outsourcing is a growing trend, and one that the pandemic is likely to accelerate as more and more working-less begin taking on employment to earn income. If you’re in a position with limited resources, this is something you should consider.
3. Think About Your Funding Options:
For successful scale startups that rely on venture capital (VC) financing methods, recession can become the main threat. This is why you need to consider other options in addition to the conventional funding model of VC.
One possible option is to choose revenue-based financing, which is a well-tested method for startups in the early stages of growth and scaling. In this scenario, the business will be able to get the capital needed from financial institutions that will take parts of the future revenues.
Another option is to access the R&D Tax Incentives (also known as R&D Tax Credits, or an R&D Tax Offset) which is a non-dilutive financing option allowing companies to claim back a portion of their development expenditure.
R&D is much broader than what most people tend to think, and can occur virtually in any sector. If you’re working on the development of new products or services, platforms, systems, or new processes, you may be qualifying for this incentive – linking up with an R&D Consultant might be a good idea to help you check your eligibility for this scheme.
4. Networking And Professional Relationships:
Networking can be a powerful vehicle to success. Never overlook the importance of networking. It is as important as staying focused on your goals. Effective networking is vital and critical in career advancement that you can’t ignore the benefits of networking and relationship building.
In times of uncertainty, it’s even more essential to find new avenues for your business and make sure you are at the forefront of your mind. Engaging with industry leaders and experts can provide you with valuable information on how to scale your business to adapt to changes in the market and possibly boost the growth of your business. The way you network with others can highly influence your ability to succeed.
In business, networking is key to career growth that can open doors for your company scaling. So always put in the effort to network with people in your industry, even in tough times. Business people who do not network are missing out on the goldmines of leads and are most likely to make fewer sales.
5. Pay Attention to Your Competition.
It is essential to watch your competitors’ actions and their marketing approach.
Monitoring the competitors’ activities and progress can be a great way to help you on how you’re doing in your industry. Every business operates in a competitive market; therefore, it is crucial to understand how your competitors are marketing their products and services. Researching your competitors is one of the critical steps in developing a strategic business plan.
You Should Consider:
1. How are they doing it and how are they accomplishing this?
2. What strategies do they use and which are successful for them?
3. What techniques do they employ and what is most effective for them?
You should determine why they are successful and figure out those traits you would like to emulate, which will allow your business to remain ahead of the game.
1. Improve your company’s profitability by implementing proven cost-cutting strategies.
2. When hiring people, consider freelancers for various projects in order to save time and money.
3. Consider other methods of funding aside from Venture Capital.
4. Never undervalue the importance of networking. The benefits of networking can be far-reaching.
5. When starting a business, paying attention to the competition is an important consideration for every business.
A growing number of small businesses running in the covid-19 pandemic are failing in their early years. But the situation can be complicated and even more demanding if you’re running a startup. However, with the strategies mentioned above, small business owners can endure and let their companies grow despite the difficult times it faces. So that you’re still around to flourish when the economy improves and the challenges are over.