November 20, 2008

How can startups survive the economic storm ?

My blogging rate has gone down drastically due to the lack of internet connection in my residence cry [Blame it on my my recent relocation but I am sure that ThoughtsPrevail would bounce back !!!].Today, we have a guest article by Kelly Kilpatrick who shares some mantras on "How to keep your startup afloat during the economic crisis".Kelly writes on the subject of best business schools and can be contacted via her email

No one likes a downturn, least of all when it has to do with the economy, not just of a company or even a country, but of the entire world. It’s a domino effect that we’re witnessing now, as the mighty fall of a few big names are bringing down others associated with them and causing a global crisis the likes of which have not been seen for a long time now. When even the huge conglomerates are known to be shaking in their boots, is it any wonder that the little startups and fledgling businesses in doubt about their future? However, all is not lost, not yet. To use a cliched expression, where there’s a will, there’s a way; so hold your head high and let your positive attitude take you forward in these difficult times:

Believe in your abilities
A bird on a shaky branch is not afraid, because it is confident in its ability to fly even if the branch does give way. An apt analogy for our present situation – even if the economy of the world is unstable, as long as you believe in your abilities to make it through this bad patch, you’re going to be ok.

Adopt conservative measures
It’s not the time for risks, not when people are struggling to stay afloat. It’s best to be as conservative as you can, both in terms of current business principles and future plans.

Go back to the basics
It’s now more than ever that you need your customers to stand by you; so pick up the phone and let them know that you’re counting on their support and that you’re committed to providing them with the same kind of service they’ve been receiving all this time. True, you already have a relationship with them, but in these tough times, you must focus on re-affirming the relationships that you already have rather than looking to forge new ones.

Cut unnecessary expenses
Money is definitely going to be tight for a while, so it’s best to cut back on your overhead costs and any expenses that could be considered as frivolous. Focus on reducing the recurring expenses – these, even if not a large amount, could add up each month to a significantly huge sum.

Ditch unprofitable ventures
If there’s a department that’s not doing too well, it’s best not to persist with it at this time, not when money is hard to come by and you’re struggling to cut your losses.

Cut production costs
If you can do so without compromising on the quality of your products. If you can’t, and if you know your market is secure, raise the price of your products. Of course, you will have to deal with unhappy customers, but if you put it across to them in a positive way, they’re likely to understand.

Boost your employee morale
Unhappy employees cost you a lot in terms of time, money and productivity. So make sure your employees are mentally secure; even if you have to lay off a few of them, make the rest realize that their jobs are safe. Or if you could get them all to take a pay cut rather than force them out of a job altogether, that would work fine too.

Getting a new business to grow is hard work even in the best of times; and now that we’re going through the worst, you must work even harder to make sure you stay afloat.If you have to lay-off people, this article by Guy Kawasaki , would definitely help you in laying off people while making others feel safe wink.

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13 Comments:

At Nov 21, 2008, 11:49:00 AM , Blogger Manish said...

1. Nice article. Thanks for it. I click 'The Art of Laying People Off' by Guy Kawasaki. I liked the point 'Don’t let people self-select'.

2. Economic Down turn is best time to build up competency for future boom.

3. However it is not always possible particularly for start up. The problem will intensify when best people leave and join (1) established company or (2) another start up. Both adversely impact moral of existing employee. Everyone needs some nice counselor who can explain that all the negative thoughts related to - not so bright future - only exist in mind.

Keep Posting such guest articles

Manish
http://layers7.blogspot.com/

 
At Nov 23, 2008, 5:47:00 PM , Blogger chaitanya.gk said...

Hey Himanshu..nice article..I thought I would ask you some tips on buying shares.

 
At Nov 24, 2008, 8:37:00 PM , OpenID thoughtsprevail said...

Hey,
@Manish:
Thanks very much for the comment.Yes,true , during these tough times, small companies or startups can definitely go on a shopping spree for good talent.

Definitely Engineers would be more than happy to join startups now :)

In fact, keeping the moral high should be one of the priorities now since many guys won't be able to deliver because Times are made tough(even though they are not tough)

-Himanshu Sheth

 
At Nov 24, 2008, 8:39:00 PM , OpenID thoughtsprevail said...

Hey,
@Chaitanya:
Thanks very much for the comment.May be I would be the wrong guy to give you any tips on it (:

In fact, when I invested in Reliance Power IPO, I thought I have made the wisest decision, but now I feel I have to wait for many years to get the returns :)

Do keep visiting and commenting !!!

-Himanshu Sheth.

 
At Dec 9, 2008, 10:12:00 AM , Blogger Jadu Kumar Saikia said...

Himanshu, all your points are valid, nice article. Thanks.

//Jadu. unstableme.blogspot.com

 
At Dec 9, 2008, 10:15:00 AM , Blogger ContentXn Network said...

Hi,

I invite you and all bloggers to join contentxn.com as publishers.

http://www.contentxn.com/contentxn/pub_register.php

We look forward to working with you.

Navneet,
www.contentxn.com

 
At Dec 10, 2008, 7:08:00 PM , Blogger ! ky said...

hey nice post...
n nothing wrong in giving tips or suggestion its somethin u know better than others n u share it out considering it is upto the others person wat u say correct na...

nice blog dude...

kven.
http://www.kollywoodmoviereview.blogspot.com/

 
At Dec 13, 2008, 11:59:00 AM , Blogger ContentXn Network said...

This comment has been removed by the author.

 
At Jan 1, 2009, 2:05:00 PM , Anonymous Jessica said...

Hi Himanshu
Have not seen a post from you for a long time. Is everything fine.
Awaiting a post.

TC

 
At Jan 1, 2009, 2:05:00 PM , Anonymous Jessica said...

Hi Himanshu
Have not seen a post from you for a long time. Is everything fine.
Awaiting a post.

TC

 
At Jan 2, 2009, 10:25:00 AM , Blogger Himanshu Sheth said...

Hey,
@Jaidu:
Thanks for the comment.Had lost from the blogosphere and would be back now(in few days) in 2009 :)

@ContentXN:
Have already joined the network.Would resume blogging soon,let me see how it helps me !!!

-Himanshu Sheth.

 
At Jan 2, 2009, 10:27:00 AM , OpenID thoughtsprevail said...

Hey,
@Ky:
Well,that is a big compliment :) I was with a startup of 3 members and this is where things started(after my blog).Yet to start something off but can definitely say that I had my hands dirty with a startup :)

This blog is more like a personal blog but with some other stuff collected from the internet.

Thanks again and hoping to see you back when I am back :)

-Himanshu Sheth.

 
At Jan 2, 2009, 10:30:00 AM , OpenID thoughtsprevail said...

Hey,
@Jessica:
Thanks very much.I am all fine except that I am mostly with my work with barely any spare time to blog.

I recently shifted to Hyderabad with a product based startup and life is great...Real startup stuff !!!

I would be posting in this weekend and It would be great to see your comments on the same :)

-Himanshu Sheth

 

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