COVID-19 can create smash entrepreneurship for success and growth


In the face of the worldwide COVID-19 pandemic, Entrepreneurs need to face a replacement reality: that it's not only an enormous sanitary and health crisis affecting million or maybe billion people altogether over the planet .
Image Source : polico.com

This is often also an unprecedented downturn on the worldwide economy. As an example , France has lost 6 GDP points in 15 days and 10 million people in USA has been laid off. This reveals the breakability of our economies and its fundamentals. If the planet has quickly shifted under our eyes, the various scenario and reality aren't an equivalent counting on where you're running your business today.

The government, public health and economic responses are tremendously different if you're an entrepreneur based in USA or in Europe. As founders, you furthermore may do not have an equivalent action decide to put in counting on your sector and industry. If you're in online shopping, food delivery, video gaming or video conferencing industries where businesses are currently booming, isn't an equivalent as if you're running a business within the hotel, restaurant, retail, entertainment, or sport industries. These industries could take the chance to innovate with more digitalization and disruption implemented in their business models so as to extend the touchpoints with their customers.

Those Entrepreneurs should be able to lose 50 to 80 per cent of their turnover as their valourization. The Lime start-up (the urban mobility e-scooter star company), as an example , lost 80 per cent of valorization in one month. Last year, its last fundraising ($310M USD) established its valorization at 2,4Billion USD and now after the corporate laid off 110 people out of 600. consistent with theinformation.com, Lime begin is brief on cash and must raise money. Today its new valorization dropped at $400M USD. Ditto for Airbnb, the accommodation star company, Airbnb planned to enter the stock exchange in 2020 but the IPO are going to be postponed to next year. consistent with Financial Times, the corporate lost 16% of its valorization which decreased from 30 billion USD (2019) to 25 USD billion last week.

Good news

Nevertheless, there are two good news: 
Entrepreneurs are fighters, optimistic and resilient. they're going to overcome this difficult period because this is often in their DNA to recover .
 Every crisis isn't limitless, and therefore the end entrepreneurs can always undertake something.

 A corporation needs 3 assets to be profitable and sustainable:
Money (access to capital)
 A know-how or a selected expertise
 A team (people)
 Your 1st asset: Money

Keep playing to win, to not survive: Manage to survive and at an equivalent time, you'll steel oneself against the day after the crisis exit.
Action 1: The Diagnostic 
Accept your previous business plan is now irrelevant, outdated then prepare and plan for a worst-case scenario. you would like to face the reality:

Ask yourself: Where were you at the start of 2020 (in January)? Were you in fine condition or not and why? Where will you see yourself in Q3 or Q4 2020? what proportion money does one have in Cash today? what proportion money does one got to stay alive during the approaching 18 months? Prepare your plan for Q1, 2021.

 Action 2: Cash (expenses and revenue sources)

Cash is vital . Then it is time to review all of your expenses, non-essential expenses must be cut so as to scale back your cash burn rate. you've got to form your company leaner by transforming your fixed costs into variable costs so as to become more agile. Reduce marketing and events costs, everything which isn't essential to the lifestyle of the corporate should be stop . Pinpoint and appearance after your revenue sources. Analyze your customer portfolio attempt to guess who amongst your customers could be unable to pay anymore their invoices. Encourage faster payments from your clients. 

Action 3: Access to capital

Evaluate and calculate the potential risks. At an equivalent time, validate together with your VCs, your shareholders, your partners, your banker, your trust relationships if they're able to support you and to assist you during this crisis period and until where and when. Secure your funding which you evaluated to remain alive during subsequent 18 months. Bear in mind, fundraising on video conferencing doesn't work, a minimum of until today. Trust and confidence behind a screen aren't obvious to determine .

Do not: await the top of the crisis without taking immediate actions considering this sanitary crisis isn't under your control and responsibility.

Do: position your company for growth, downturn is that the best opportunity to enhance your fundamentals, see below. Your 2nd asset: Your expertise, your value proposition, your market - fit product Take this chance to enhance your fundamentals and to form them more robust. 

Your product:
The tech and developer team could use this point to travel deeper and to enhance your product. confirm you're creating a pain killer. Take this point to coach your tech team to new technology software (online and free open platform). 

The executive team: Take this chance to enhance your market fit, what's your real value proposition. A strategic thinking is feasible since for once CEO and executives aren't undergo to the short-term figures and therefore the dictature of monthly & quarterly turn overs and outcomes. attempt to step back change or adapt your strategy and put in place new processes.

Learnings
 After the COVID-19 crisis the teachings learnt are:
The travel limitation of products and business travelers (more remote working and remote meetings) thanks to the impact of the physical distancing. there'll be other sanitary crisis or new wars thanks to the worldwide overcrowding.
The potential growth dematerialization of products and services: we could witness of the booming of 3D printers to supply masks and ventilators in each country.
Agility is once we see Apple changing their operations to style , produce and ship face shields for medical workers.

The low-cost model where China and India, are the worldwide manufactures are going to be ended. Globalization also . This crisis will change the relationships between countries and states, new challenges, new stakes, new dangers, news threats (health and climate). Governments must and can demand to be independent and autonomous with critical medical supplies and medicines but not only they might wish to reduce future vulnerabilities. we will find out how Korea, Singapore, and Taiwan have rapidly contained COVID-19, but these people are able to accept person tracking and face recognition which aren't yet acceptable in democracy (i.e. Europe for instance). A world less open and doubtless , less free is to be expected. 

With containment within the main parts of the world , we'll see needless to say new ways of life producing new needs, then new opportunities for entrepreneurs. Some new business models, new offers about dematerialization need to be invented. within the coming years, the new king of the planet are going to be the "Amazon of dematerialization" and Entrepreneurs are going to be those ones who will implement this new world.


SOURCES

https://www.pfcfulfills.com/industry-insights/-ways-a-3pl-delivers-better-inventory-storage-ecommerce-fulfillment/

https://www.google.com/amp/s/www.bussinessinsider.in

https://www.emeraldgrouppublishing.com/journal/jeee/enterpreneurship-during-times-covid-19-pandemic-challenges-and-consequences

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