Practical solutions for startups during the COVID-9 Pandemic
With the COVID-19 pandemic running into the 2nd month since the first case was announced in Kenya, there has been a shift in the operations of startups and Small and Medium Enterprises. The rising cases coupled with government imposed restrictions on movement should however not spell gloom and doom to entrepreneurs.
While some businesses have been forced to shut down others have since pivoted their business models and operations to best suit the current times. The COVID-19 challenge has revealed a crop of new innovators who are designing solutions to meet the unexpected needs that have risen from the pandemic. This is a trend we can hope to see in the coming months with more innovations emerging within the healthcare, logistics, remote working solutions and productivity software sectors. For impact investors, this is an opportunity to acquire a new pipeline while continuing to provide technical assistance to entrepreneurs.
Even as the virus continues to spread startups can ensure they come out of the crisis stronger. To begin with they have to leverage their board of directors, advisors and mentors who may have been through past downturns and have seen various strategies that best work in these times. They can help the team think through various scenarios they can take to ensure the business survives.
As companies are re-evaluating their operations to reduce costs, salaries may have been the first item on the list. It is important for companies to reduce their cash-burn and increase their runway as much as possible. In the case where employees have been asked to take pay cuts, startups can consider trading cash for equity in the company. This will motivate the team as they feel they have a stake and believe in the vision for the company in the future.
Keep a lookout for opportunities your company can explore during this time. If there is a way you can pivot or change some of your core business to be part of a solution to the COVID-19 pandemic, grab the opportunity and do it. This will diversify your operations and provide a source of income. A good example is Kijenzi, a 3D printing company with a focus on hospital equipment that has taken to producing social distancing aids like touchless door openers and face shields among other PPE’s.
As you monitor the situation, there are numerous resources that are available for companies with solutions to the COVID-19 virus. Take advantage of this time to position your company as part of the solution and raise money towards fighting COVID-19. Startups can survive a time like this and if they are wise enough they can come out at the top. Ensure the safety of your employees and continue to follow government directives on social distancing and safety measures.