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07 Apr
  • Editorial Team

Start-ups are full of new ideas, vigour and confidence to make their own place in the highly competitive business world. While they are focussed on making their dreams come true, many times they get caught off-guard by a crisis. As opposed to established companies, more often than not, startups do not have back-up plans or the experience to deal with a crisis. Hence, the crucial first step is to acknowledge that there’s a problem. It’s important, then, to take a step back and look at things from a macro point of view to be able to survive the tough times.

Here is a quick checklist for the start-up CEO to manage a crisis and survive.

Checklist for managing crisis

1. Contingency planning – Start from a blank slate

Handling a crisis requires quick planning to deal with the situation. The focus should be on survival rather than growth, and liquidity is of utmost importance in such times. So plan and re-plan. Fiercely criticize your own plans to come up with the best logical one.

2. Create scenarios – from worst to best

Carefully perform cash flow analysis for different scenarios. In today’s difficult times, the best case scenario may actually be a not-bad scenario and the worst scenario may be difficult to even comprehend. But it is important to be realistic while forecasting cash flows so that proper planning may be done to arrange for the upcoming difficult times.

3. Arrange finance – Venture capital

The times ahead call for higher injection of capital as sales are bound to be lower and the supply chain would be disrupted. Consider the lowest revenue scenarios and look for venture capitalists that may trust your company to gain foothold again in the long run. Communicate your future plans well to gain trust.

4. Reduce inventory and focus on sales and revenues

For start-ups, it is important to realize that sales and revenues will be difficult, and it would be important to reduce inventory and have more liquidity. It is imperative to keep in touch with customers and let them know your plans to handle the services.

5. Conserve cash through cost-cutting and recalculate ROI

Use the crisis as an opportunity to cut down costs. Use smaller premises or work from home to save rent and focus on cutting down all unnecessary expenditures. While many businesses look to fire people to save on salaries, it should only be considered as a measure of last resort. Instead look for reshuffling the teams and put talented people on top. Focus on stabilizing your core operations and recalculate ROI from marketing. Coming out from a crisis is also not easy as people spend reluctantly, so better targeted marketing efforts may be required.

6.Build and use networking to look for tie-ups

Engage in social networking, through online options in current times, to build up networking and help each other’s businesses. Sharing best practices, asking and receiving help on a common conversation platform may also help in having tie-ups that may help sail through the tough times together.

7. Communicate well

While working from home would help in cutting down the rent cost in a crisis like today’s, it also means higher communication would be required to keep a track of every employees work and achieve synergy in operations. The advice is to communicate often and use several group calls as well as individual calls to direct work.


Every crisis can be seen as an opportunity if tackled properly. While the current business scenarios are indeed unprecedented and difficult, they also present newer opportunities of having more online communication and saving on rent premises. It may be time to think about such opportunities later, but at the current moment, it is better to focus on core operations to keep the continuity, while communicating as frequently as possible with all the stakeholders in the company. The difference between crisis and disaster is preparation and communication. So be better prepared and take proactive steps to deal with crisis.

Did You Know


The act of paying out money for any kind of transaction is known as disbursement. From a lending perspective this usual implies the transfer of the loan amount to the borrower. It may cover paying to operate a business, dividend payments, cash outflow etc. So if disbursements are more than revenues, then cash flow of an entity is negative, and may indicate possible insolvency.

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