Setting up a startup company isn’t a small issue. Facing ups and downs is the most common thing for an entrepreneur. Risk factors will play an important role in a startup. Amongst these, the financial crisis is a way too obvious for a startup company.
It is just not enough to have an excellent product with ramping sales and pleased customers. It is very important to have your finances under control.
Here, we share with you some steady fast tips on how to manage your startups during a financial crisis.
1) Be prepared for the crises even before they happen
Much financial crisis gives you an early warning signal, all you need to do is identify the early potential crisis that can happen to your startup.
The only objective behind this is to take certain measures to stop it in the early stages of the crisis.
You can also do some research from your past crisis and can learn from other’s past mistakes. Lastly, analyze your startup’s readiness for each potential crisis.
2) Listen to the voices which come from outside your organization
Always keep monitoring the media. Be the first one to know the negative media coverage about your organization so that you can take a quick fix action before it gets out of your control. Do monitor print media as well as online and live media for updates.
Think wisely to respond to the negative reports.
3) Know your bank balance and always have a budget planned ahead
A startup CEO must know what exactly his bank balance is today. Create a new budget at the beginning of each fiscal year. Update it whenever it is necessary. Review your budget whenever you plan a large purchase.
4) Have an emergency cash cushion
Always have an emergency financial cushion. You never know what is planned for you in the next month. Some experts in this area say 10% of your annual budget should be saved for future crisis. Saving this amount in a separate bank account will give you peace of mind.
5) Keep cool
It is quite natural that facing a crisis can be a panic creating the situation. And mind it, this will be all of a sudden. As a CEO of the company, you will discover yourselves in a hot seat, bombarded with questions, doubts, and negativity as you struggle to get through your path.
Keep your nerves steady and don’t surrender yourselves to frustration, panic or anger. Be mindful that your staff is watching you and looking up to you to help find a solution for this crisis.
Lead from the front in order to get the situation into perspective.