Most of the startups in India are getting to see a recession for the first time, including me, I am bit scared but I know India’s growth story is going to continue and there will be enough business soon for the startups to thrive, but until then what could a small startup company do to survive a recession, rather this recession.
Cost cutting: This is one thing we get to see a lot in an economic slowdown, but cost cutting should not be a mere reaction to a market slowdown, it should be more of a habit, especially if you are a small company, you need to look for every penny you could possibly cut. Now for a medium sized company cutting on marketing might not be a good idea, but I think it’s more of an imperative for a small startup to cut on marketing too.
Sell, sell and sell more: This is undoubtedly the most important thing you’d want to do to survive a recession. Rather than getting into panic mode and just trying to save the current business, you should pursue sales aggressively. Now you might find the close/prospect ratio drop down, but this might just be the right time to sharpen your prospecting skills.
Go Local: All the developed economics are seeing a huge drop in GDP’s but the case is not quite similar to the developing economies i.e., Brazil, Russia, India and china, Especially India and China, though there is a dip in the growth, The growth is estimated to continue, though at a slower pace for time being. BRIC consumer is going to take the world out of recession. So this might be probably THE right time to go LOCAL.
Fire some of your Customers: Now this is a bit counter intuitive, we have always learnt to try retain customers no matter what, but you always have some customers who use your resources extensively without contributing much to your business, now every business is a for profit endeavor, and every business should concentrate on increasing the bottom line. Here I’d agree that increasing top line is important too, but it should not be at the cost of bottom line.
Motivate your employees: This is a must do. Instead of focusing on the work and helping the company succeed, In an economic slow down people tend to get panicky and start looking for jobs outside, in this trying times an important thing for you to do is to motivate people, meet them on a frequent basis and show them how they could help the company come out healthy out of the crisis.
Now probably nobody knows when the economy will recover, but all we can do is hope that the economic reforms and new markets will soon help us get out of this recession. Do you guys have more tips? Can we make this into a top 10 or top 50 lists? Do leave your tips in the comments and I shall keep updating the post!
Not too inspiring, have read better articles on the same topic that have been doing the rounds since november last year
Nice article! Especially, “Go Local” makes sense…
@Ajitesh @Rizwan
Thanks for your comments.
Firing customers is a wild idea. Don’t do it.
Understand motivating the employees part, but what do you answer to the employee’s question as to whether the startup will do layoffs or not? if the employer cannot give an honest answer, there is no reason why the employees will not look outside. Employees are after all liabilities for the company under the cover of “assets” – so loyalty cannot be one-sided.
i guess all the points are very clear and crisp !!! good article -Pradeep !!! I dont know why others are so critical in reviewing it..and for God sake ..this is not meant to inspire …common guys !
@sudhir
true the article was not for inspiration,but your comments sure did inspire me
Isn’t this what you would anyways do in business … ?!! Recession or no recession ?