“Don’t Panic!” These are two words (made popular by Douglas Adams in The Hitchhiker’s Guide to the Galaxy) that every day become more appropriate and valid. Credit has dried up as has funding by Venture Capitalists, Angel Funders and the like. If you are a bootstrapped company, a startup or a company in “stealth mode,” right now you might be wishing that you had taken a more stable job at a large corporation (hopefully not in the Financial sector) or that you had planned better for another bubble to burst. Well fear not…there is always a way to survive, through careful planning and management.
I would like to offer the following “Guide” of my own to those small companies or startups that are struggling now, on the verge of closing shop or just ready to give up. First, let me restate Adams’ words: “Don’t Panic!” There are methods to keep your company and vision moving forward, maybe in a different direction or perhaps a bit more slowly.
Here are a few things that you may want to consider as you re-architect your survival strategy:
- Start Now – don’t take a “wait and see” attitude. If you have a great idea, keep moving forward, but DO start your cash conservation immediately. The mere fact that you are searching for information and reading this post is a great sign that you are being active!
- Outsource – sure, doing things in-house can save you some cash, but only part of the time. Truly evaluate what makes sense (cents) in your day-to-day operations. If it takes your developer a week to do something and an outside “specialist” a day or two, evaluate the costs of both actions. If you aren’t paying your employees and they are doing work in their free time, try to factor in the time-to-market of that approach. While you may save money in up-front costs, you may lose it in terms of beating your competitors to market. Here are a couple factors within “outsourcing” to consider:
- Human Capital – frequently small boutiques who are experts in a particular field can do things faster and better than you can in-house. They, too, might be effected by the economic downturn and may be willing to cut some of their costs just to have your business.
- Operations – this can be both on the technical or just the basic company operations side. If you are providing healthcare benefits, see if you can change your plans or even ask your employees if they have other means to get healthcare (e.g., through a spouse).
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