Entrepreneurs are faced with unprecendented circumstances to navigate. There is much to consider and priortize. To help companies navigate the current uncertainty, we created an easy to use cheat sheet on how to manage your pricing strategy during a downturn.

You can get our free cheat-sheet here.

We will be sharing more resources in the coming days and weeks, so keep a look out on our website and social channels. 

Be safe and well.

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On a global scale, coronavirus (COVID-19) is challenging our institutions to contain and communicate, let alone manage and cure. Coronavirus is changing how we live our lives. 

Understandably, the new reality has raised fear and uncertainty. And its showing. 

The public markets have seen massive stock market selloffs. Large-scale events (e.g. SXSW, Google IO) are canceled or rescheduled. Universities and schools are shutting down public events and moving to online learning. Whole countries are shutting down. Investors are issuing caution and warnings to portfolio companies and the general markets alike. Then there’s toilet paper hoarding…

All indications point to the situation getting worse, before it gets better. 

Having seen some of the biggest downturns of the last two decades – the tech bubble of the naughts, 9/11, and the global financial crash – and recent events creates a necessary moment of pause and reflection. 

Where do we go from here? What does this mean from a business perspective? 

Our forecasts never include a global virus pandemic. Most forecasts are more often than not, up and towards the right. As we navigate the new reality, we want to reflect on some thoughts, as we take stock of the current business climate and plans forward.  

1. Entrepreneurs are resilient

What makes entrepreneurs special is that entrepreneurs are built to overcome adversity. It’s in their DNA. The genesis of any company starts from a position of doubt. Doubt that the product can work. Doubt the company can be a viable business. Doubt from everyone not on the team (or your mother). The desire to build a solution to a problem, is not timed to the markets. Entrepreneurs did not start their companies by timing the market and market conditions. They started their companies because they saw a need for what they are building, and was driven by passion and grit to make that a reality. 

2. Strong business fundamentals are key

Weathering the storm – any storm – requires a strong business foundation to stand on. In better times, “you can put lipstick on a pig”, but when uncertainty increases, it is hard to hide a business standing behind weak fundamentals. This includes everything from the company’s capital position, business model, pricing power, and team and culture. It’s not the good times that test what the company is made of, but the rough(er) times that see what the company can do and will go. 

3. Proactive planning creates new ideas for growth

If planning was an admin exercise in the past, planning will be more critical as the macro environment rapily evolvates. “Fail fast” can be a very unwelcomed premonition in times of uncertainty for company leadership, and the employees that depend on them. As a leader, this is where level of preparation and strategy is key. The paradigm is shifting. In the short term, the greatest impact is to make the most out of every new deal and customer, and position the company to weather the current storm. Longer-term planning is to capitalize on missteps of competitors and build a value creation machine that will help the company grow faster and deeper. 

4. Don’t be a toilet paper hoarder

There is caution and conservative decision-making, then there’s panic and paranoia. Knowing where to conserve, and where to spend will be one of the hardest decisions companies will have to make. Making panic decisions and following the herd must be avoided. It is behavior we are seeing today, but as Oxford University researcher Zhibo Qui points out in the current crisis, rising anxiety makes more people likely to conform and fail to address the real issues. 

For those who started their first company (or first job) in the last ten years, this will be the first time exposed to this level of macro-uncertainty. It’s vital to form pragmatic decisions based on known information, and scenario plan to navigate the months ahead. One suggestion made by Sequoia Capital to its founders and companies in their “Black Swan” memo, to to rethink and reassess how their companies run. When it comes to marketing it’s not only about reining in spending but to “consider raising the bar on ROI for marketing spend”.  This is not only about stopping or cutting spending – EVERYONE will do that in a market downturn – but how to maximize what is achieved. 

5. Easiest way to lose money is not to make any 

The other side of market uncertainty – apart from cost management – are opportunities to grow. If it was hard enough to gain and grow revenue traction in good times, a global health crisis will not make it any easier. Optimization, efficiency, and effectiveness are terms that we will be hearing more of in the coming months especially when it comes to sales and growth. It is vital that proactive steps are made not to manage loss, but to discover opportunities to continue building revenue traction. There is plenty out of your control, but how you plan and execute – and with what speed – is entirely in your court.  

6. Be Safe

It goes without saying that the threat of coronavirus (COVID-19) is real.  Take all necessary precautions to keep yourself, your family, and your team safe. There is no business priority greater than the safey of you and those around you. Be prudent and pragmatic. 

Final Thoughts 

Last year we wrote about navigating uncertainty and capturing more value. As we start to watch what unfolds in the current crisis, it is inevitable there will be company failures. Some will be due to the company’s business fundamentals, some because of just rotten luck. An investment that you expected to close stalls, drying up remaining runway. A new customer who delays purchasing because of fear of the current market environment. 

There are no answers to the depth and length of what is to come, except to plan and prepare, and execute. Take constructive steps to navigate uncertainity is one way to positively influence what happens next. It is up to company leaders to begin preparations to not only weather the storm, but to seize opportunities where there seems like none exist, capitalize on competitor missteps, and ultimately get the ship to the ultimate destination. 

Be safe. Be smart. Be kind. We’re in it together.

How is your company navigating the current market uncertainty? Let us know what you think. 

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The post Thoughts On The New Business Reality For Entrepreneurs appeared first on HelloAdvisr.