The pandemic has impacted industries across the world –with figures showing that almost 40 million people have lost their jobs since the health crisis. It therefore comes as no surprise that business confidence has been shaken. Many aspiring companies set out with a promising vision for a future – that did not include the pandemic.
The sharp drop in confidence levels has undoubtedly been caused by the prevailing and unprecedented impact of Covid-19. Studies have shown that many startups are worried about surviving the pandemic – as many reported having no contingency plans in place. A ‘plan B’ always comes highly recommended in case a company’s initial launch does not meet expected sales figures. Should a primary target not be met, a viable alternative must help diversify channels to help mitigate the impact of potential loss. The formal documenting of policies and procedure for startups, might seem cumbersome but there is a lot to gain from a careful, methodological approach; such information can be of great value when you are in need of clear guidelines to help you in a moment of crisis.
Despite the sharp decline in confidence levels, experts believe that tech startups are the most likely businesses to bounce back from the crisis. Ritam Gandhi, founder and director of Studio Graphene, said that while coronavirus is the biggest challenge faced by businesses today, startups are well positioned to overcome adversity of this scale. “They are nimble, agile and able to respond to the challenges that arise on a day-by-day basis,” he said. “What’s more, demand for technology is higher than ever – consumers and businesses need innovative solutions to the problems they are currently facing. So, there are opportunities for those who can pivot and keep pushing forward.” In fact, many businesses in e-commerce, digital payments, e-learning and med tech have seen positive impact amid the health crisis. But travel and tourism platforms have not been so lucky.
With revenues hard hit in these few months, many small business owners have experienced significant cash flow difficulties. While adaptability is a key characteristic of smaller companies, dried up resources and funding may disrupt plans to move forward post-pandemic. Law360 reports, that “regardless of sector, the inability to generate adequate cash flow jeopardizes the ability to meet obligations to lender, creditors and investors.”
While the pandemic has shaken confidence, reports show that the vast majority of tech startups will plan to hire more staff and hope to raise further investment this year. Businesses need to explore new markets if they are to survive more permanent changes caused by Covid-19. The shift in consumer behavior may even bring about new opportunities for those who started out with an entirely different vision. But, strategies must align with and not fight, new, emerging trends.