Along with creating a public health crisis, the pandemic has led to financial catastrophe. Industries are shutting down because of reduced or no revenue; organisations are downsizing because of which people are losing jobs, and so on.
Geetika Dayal, executive director, TiE Delhi-NCR, a global not-for-profit organisation dedicated to fostering entrepreneurship through mentoring, networking, education, incubation and funding that is spread across a vast network of 61 chapters in 14 countries, tells us how COVID19 has affected the start-up ecosystem and what are the ways to recover.
As a result of some of the preventive measures taken by governments worldwide to control the pandemic, small businesses, start-ups, and entrepreneurs have come out to be one of the most vulnerable groups that have been directly affected by these measures. COVID-19 has managed to cause extreme disruption, both socially and economically.
The executive director says that entrepreneurs should accept the fact that the recovery rate will be slow.
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“The next thing to do is work on how one would resume operations and decide on the phase-wise role out. Next, think about team planning and strategies and, most importantly, analyse your cash runway,” says Dayal.
Another important thing to do is to remain passionate about your work and work with perseverance. She points out that in the initial phase, start-ups should focus on surviving the market and eventually utilise time and people to make their plan of action strong for the coming challenges.
COMMUNICATION IS KEY
In such times when people are upset and scared, there is a lot of uncertainty that impacts the performance of employees. Dayal says that it is important for any organisation to be transparent with their employees.
“Maintaining good communication and keeping your employees motivated during these times will enable them to stand with the company and create a positive atmosphere that in the long run will help to better their performance,” she says.
‘Cost-cutting’ has a very negative meaning when looked at from the employees’ point of view. “In times of a pandemic, cost-cutting is the last thing employees want to hear, and laying off employees is not the only way in which a company can save money,” she says, explaining that this pandemic has let people in all sectors work from home or remotely, which has not only saved time but also helped start-ups save a lot on inventory and other services that are usually offered at workplaces.
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“Work from home is not only cost-efficient but has also helped employees to be more prompt with their work and better their performance. The only thing is that work from home should be more structured,” adds Dayal
Since everyone is now easily available, given the fact that everyone is working from home and are not caught up with the client, production and other meetings, it is essential to have a conversation with the board of directors, mentors etc. on the lines of how can a start-up be prepared for another impact in the future, if at all any.
“It is best to build upon an inventory that will last for a year or two, depending on what sector the start-up belongs to. Another effective measure is to work on the finance part and to work on policies and ideas that can help a start-up sustain the impact financially at least for a couple of years. This needs intensive planning, and the time is now to be prepared,” she explains.
Dayal points out that the last time the economy came to a slowdown, the start-up economy flourished.
The main reason behind this could be the rise in unemployment. She says that there is a possibility that people wouldn’t want to venture in the start-up sector; however, what many people miss out is that entrepreneurs and start-up founders are pessimists. “These founders work against all the odds, so it is unfair to say that there won’t be brainstormers raiding the market once the economy starts recovering,” she concludes.