During these times of self-isolation, many are fearing a long period of economic downturn. Navigating the impact of these uncertain times will not be easy for any company. We are going to discuss some preventative measures to keep your business afloat during the downturn.

1. Undertake Proven Cost-Cutting Measures

Start by cutting all unnecessary business expenses, including nonessentials projects, underperforming departments, etc. This is also a great opportunity to see if your business actually needs a brick-and-mortar. This may be the time to move your workforce to entirely working remotely or joining a coworking space (like Work Hive).

2. Turn to Freelancers

If you do not have the funds to hire a new full-time team member, reach out to freelancers. Comparatively to hiring a full-time member, freelancers are far less expensive to hire. Also, freelancers are in every industry and are readily available. According to the 2019 Freelancing in America report, there are a total of 57 million freelancers in the country. 

3. Be Smart About Alternative Funding Options

Startups can consider alternatives to a venture capital funding model, such as a revenue-based financing model. This model means startups can raise capital from a financier who claims a percentage of your future revenue. Another is trajectory-based financing, which provides nonsecure loans, guided by predictions of future business trends. 

It is also important to be wary of who is offering capital. Not all loans are created equally, and debt services can sink companies during economic downturns.

4. Develop a Plan of Action with Your Strategic Partners

Approaching your supplier relationships during this time can determine how well you navigate it. Call your suppliers and partners to gauge how they’re handling the downturn and to develop a clear plan of action for meeting the moment together. This will build trust and loyalty between you and your suppliers.

5. Consider Pivoting Your Business

Having an agile startup will help you stay afloat during economic downturns. If your startup is agile enough, consider pivoting in a direction that might be more profitable in light of the new reality. Fortunately, many startups’ core in-house capabilities — software development, cybersecurity, artificial intelligence, data analytics and so on — have value propositions across a vast swath of industries.