The worst of the pandemic may be over, but uncertainties around the situation continue to affect our daily lives whether we like it or not. “Talks of newer variants and infection clusters continue to hamper full-scale revival plans and many businesses have been forced to change their plans due to the stop-start situation”, observes Jabong Co-Founder, Praveen Sinha. Whilst adapting to challenges is a key trait of an entrepreneur, sometimes forced adjustments can have long-lasting effects on a business. For instance, thousands of startups across the globe have laid off employees or put them on furlough as a response to lowering demand during the pandemic. This brings with it the negatives of bad press and bad consumer sentiment.
How are startups of 2021 cutting costs?
- Co-Working Spaces – Many unicorns of today, had their humble beginnings in co-working spaces, and real estate rent is a massive expenditure arrear on a business’s balance sheet. Many startups have canceled their leases in favour of shared spaces to see the pandemic out.
- Freelancers – Hiring freelancers for non-core work can prove to be beneficial as the business owners have the flexibility to choose among several options and pay competitive rates for competitive rates.
- Work from home – Many companies across the world and on home turf, have decided to give their employees a permanent option to work from home. For some, this may not be an option but business owners in media, advertising, e-retail, software can consider this as an option to reduce workspace requirements and in turn cut costs.
- Focus – Many startups tend to get carried away after millions in funding and try to diversify away from their core strengths. The present market requires focusing on the strengths and it’s time for startups to concentrate on what they do well and not be adventurous considering the market conditions.
- Embrace Technology – Innovation has come up with several handy tools to help businesses continue to thrive in the pandemic. “For instance, digitisation of the entire dine-in experience to ensure a contactless ordering experience in restaurants has been successfully implemented across restaurants in major cities,” observes Praveen Sinha Jabong Co-Founder. Consumers are likely to feel more at ease with such an experience in the new normal.
- Doubling up on Social Media Advertising – Advertising on social media has always been cost-effective and allows every business the opportunity to own the same marketing real-estate. In the new normal, where people are spending a lot more time online than ever before, this media form is the best way to communicate to your consumers and also the cheapest one.
Startups often face the pressures of cutting costs and turning profits on their balance sheets. The pandemic has further increased the pressure, especially on startups that had just started in the last couple of years. “The ones who can adapt to the scenario and be flexible with their planning will survive and come out stronger when we can go back to our normal lives”, concluded Sinha.