You’ve followed your passion and launched your startup. All of the pieces seem to be coming together until you’re hit with something outside of your control: an economic downturn, or maybe even a full recession.
Does that mean it’s time to close up shop for your startup?
The answer is no, and you don’t even necessarily need to simply hold on for survival. If you’re smart and proactive, you can actually grow your startup, even in the face of economy-based challenges.
When you’re the founder of a startup, you can follow some of the tips below to keep it growing, even when others around you might be folding.
Focus on Hiring the Right People
No matter the macroeconomic factors impacting your business at any given time, you need to have the right talent on board to be successful. This is an area where a lot of startups have difficulties, even when they’re not also in a recession or downturn.
They tend to either be too lean with their hiring, or they get in a hurry to grow so quickly that they bring a lot of the wrong people on board, which leads to high turnover rates and issues with productivity.
If you want to grow your new business but you’re facing outside economic challenges, put a lot of focus on the hiring process. Don’t cut out hiring altogether, but keep it smart and lean. Take the time to find the right people to help you build a stable infrastructure poised for growth.
Look For Lending Outside of Traditional Banks
During a recession, banks are going to become incredibly strict with their lending, and it’s going to be difficult for a startup to get any kind of capital from traditional financial institutions.
In the Firmex report on mid-market mergers and acquisitions called “Riding Out the Downturn,” it’s recommended that businesses look beyond these conventional capital providers and instead toward “non-bank banks.” They describe them as large, sophisticated and user-friendly, and along with eliminating some of the hurdles of a traditional bank, the report points out that they tend to be cheaper and more efficient.
As a startup, regardless of the external climate of business and the economy, you should be looking for innovative marketing and advertising strategies. These work well in a recession because they tend to be inexpensive, easily measurable and based on data and real insights.
Don’t think that a recession or downturn means you eliminate marketing and advertising altogether. Instead, just take the time to make it more targeted, finding the channels that work best for your business.
These are moves that are likely to carry over and continue being highly beneficial to your startup even once you’ve weathered the storm of the economy.
Don’t let a recession spell the end for your startup. Instead, let it represent new opportunities and new ways of doing things that could lead to not only your survival during economic headwinds but also the creation of a foundation that will allow you to thrive in the long-term.