“It’s been one hit after another for small businesses, and now we’re in this unusual situation where we just don’t know what’s going on with the economy,” Paige Ouimet, a business professor at the University of North Carolina, recently told The Washington Post.
It all raises the question of how businesses only just starting out could — and should — contend with this economic uncertainty. However, as it’s hardly the first time that startups have had to navigate choppy financial waters, here are some tried-and-tested methods to consider.
Have confidence in your business idea
In an article for Entrepreneur, Donna Griffit reports having asked a founder of a major Silicon Valley VC for his thoughts on current startups’ chances of securing funding.
He responded: “Entrepreneurs should remember good companies will always get funded. I anticipate there will be a flight to quality but that funding will continue at a slower pace likely with lower valuations.”
Show investors why your company is relevant
What problems are people currently facing — or likely about to face? If your startup is aimed at addressing these pain points, it might only be a matter of time before you come across an investor who sees the growth potential in your business.
The post-pandemic landscape has left many people continuing to work from home, meaning that you could offer solutions for facilitating this trend. Similarly, with the threat of climate change a major issue right now, a sustainable business can make for a real winner.
Don’t desperation set in
Yes, you will inevitably have to be cautious with your corporate spending for the time being. However, when you do approach an investor, you want to espouse confidence rather than desperation. After all, why would an investor be eager to pour their own money into a struggling business?
You should endeavor to give your startup the look of a long-established professional outfit. You could, for example, ask a broker like Office Freedom to help you in booking a slick-looking office at an attractive price.
Find other clever ways to save money
Necessity is the mother of invention, so the saying goes — and, indeed, difficult economic times can familiarize you with cost-cutting techniques you might never have discovered otherwise.
Still, you could remove a lot of trial and error from the equation by heeding Investopedia’s advice. To this end, you could source supplies from businesses on the brink of closure, shop around for the best deal when looking for a business credit card, and use a startup-friendly bank account.
Engage in corporate networking
You can start doing this through establishing contact with a local business group or your chamber of commerce. Basically, the more relationships you form in the business community, the more easily you could attract the resources and customers your startup needs.
This is the case whether your immediate objective is simply your startup’s short-term survival or instead to build on corporate growth you have already achieved. The economic picture might be daunting at the moment, but it is important not to lose faith.
Kidal Delonix is a contributor to Mr. Hoffman's blog. The views and opinions are entirely his/her own and may not reflect Mr Hoffman's views.
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