As the entire world goes through testing times, it is critical for fellow entrepreneurs to keep the capital under tighter control than what we are used to. We as entrepreneurs are normally completely focused on growth, which requires a continuous inflow of capital, which may come from accruals from startup or from self/investors funds.
In the current scenario which hopefully will end soon, we may take the following approach:
- Reallocate capital to areas that will improve the business on an immediate basis. In the Fintech world, this may mean digital onboarding, automation of operations/underwriting/reconciliation, enabling digital payments, deeper integration with partner ecosystem etc.
- Any fresh investment in the long term bet can be rescheduled for better times.
- Relook at the hiring plan as it may have to be re-tuned to current times. Some of the critical roles may have to be looked at from Insourcing / Outsourcing perspective.
- Invest heavily in skill-building for team members through online courses. Employees would have extra time now due to no travel and may need your support in learning new skills.
- Invest in training and deployment of tools like Zoom, Slack, Asana for enabling work from home
- Move towards variable costs, wherever possible including for rentals. For example, you may move to a smaller space or simply exit your office place for next few months
To many, these ideas may look knee jerk reactions, however for early-stage entrepreneurs, it is critical to keep the startup afloat and unleash capital at the right time and right place.