The startup industry is a great space for entrepreneurs; its unpredictability has enormous potential for profit, growth, and success. However, this unpredictability can also make the industry difficult to be in, and break into, especially during a crisis like COVID-19.
Countless startups are currently going through massive overhauls and layoffs just to stay afloat. In fact, an early international report from Sifted shows that the majority of startup owners expect their annual revenue to drop more than 25%. And, new startups are struggling even more; according to reports, there has been a significant drop in startup creation since this March.
Amidst the current uncertainty and difficulties that founders are facing in creating startups, it’s important that they are armored with every bit of information they can get for their startup’s success. In this article, you will learn tips on how to successfully launch a startup during COVID-19 despite its challenges, and prepare your organization for future success.
Tip #1: Build relationships with investors
According to research, 25% of startups don’t receive the initial funding their business model requires which ultimately inhibits their ability to grow. This is especially true during COVID-19 when money is tight for so many, and most startup founders are having difficulty even keeping money in their own bank account, let alone their business’. Therefore, it’s critical that you are able to secure outside investment for your startup to be profitable and grow within your first few years.
However, venture capital firms receive around 1,000 proposals every year. VC’s can’t support them all, and because startups rely on private investors to get themselves off the ground and find success quickly, it’s important you make your business stand out from the pack.
Work on building personal relationships with private investors to put a face to your pitch and help you stand out. You can do this during COVID-19 by attending remote networking sessions, lectures, and conferences and introducing yourself after to establish rapport.
Alternatively, you can reach out directly to them over LinkedIn by sharing relevant industry articles or informative studies that you’ve completed yourself. This rapport will also help you better understand their values and underlying concerns so you can better cater to your ultimate pitch to them.
But don’t forget your bottom line. Keep your startup’s information and numbers, like revenue expectations, market analytics, and competitor research, on hand so you’re ready if the conversation naturally turns that way. Startups with informed and confident founders are the most appealing to potential investors so it’s important you represent your organization well.
This will help you secure the coveted– and minimal– funding there is during this recession.
Tip #2: Create a long-term business plan to make it through the crisis
Planning is a critical aspect of starting a new business, especially a startup because it helps you stay organized. Despite many founders priding themselves on flying by the seat of their pants, it takes quite a bit of work ahead of time researching, securing funding, and budgeting to be successful in your first year. But during the coronavirus, it’s especially important to plan for roadblocks so you can determine how you’ll find success within the year in spite of the crisis.
Create your business plan as a guide for how you’ll fend off the recession’s impacts, find success, and grow to ensure you don’t become one of the 90% of startups that fail. Consider creating a budget with room for emergencies and doing research into changing consumer and market trends to help ensure your startup is relevant and financially well-equipped to enter the unknown waters of the coronavirus economy.
Then, describe your plan for success during COVID-19 in detail; spell out why a customer would buy your product now, and when you expect to begin making revenue. This information will be useful when you’re trying to secure additional funding from your investor relationships. Then, amend your business plan as you learn what works so that you can refer to this document during future times of crisis.
Tip #3: Focus on online marketing
Every startup requires marketing and advertising in order to effectively convey their brand’s message and product potential to customers. However, a startup launching while customers are staying home is likely at a disadvantage in the expensive and often in-person aspect of traditional marketing.
Instead, rely on online marketing techniques that are more cost-effective to meet new consumer trends. The digital world has become a very dependable avenue in the field of marketing. SEO and website development are relatively inexpensive ways to gain attention and capture sales. Social media is also a productive way to stay in touch with your customers and expand upon your brand’s messaging.
If you can’t afford to hire professionals who specialize in these areas, there are ways for you to take on some marketing responsibilities yourself. For example, you could build a blog on your website to draw in relevant traffic and showcase your brand as a knowledge leader in the industry. Then, you could promote these articles on social media– particularly Instagram, which 69% of marketers think is the future of digital marketing– to draw in new customers.
Whatever works best for your startup, be sure you’re taking advantage of the numerous free tools the internet has to offer to build your customer base and brand when first starting out.
The bottom line
To launch successfully and stay ahead of competitors during these uncertain times, your startup needs as much of your time and energy as possible. You need to determine the best ways to represent your brand to customers and investors, and the most effective strategy to manage your business in the long and short term.
However, keep in mind that times of crisis can also be times of opportunity for startups who are able to adapt faster than established corporations. Lean on your innovation and flexibility, as well as informed tips, to make it out on top.