As the global recession approaches, startups are feeling the pressure. Investment opportunities will decrease, and it will become more difficult to get clients.
What can startups do to survive this time?
From hiring freezes to spending cuts, founders are preparing to emerge unscathed from the recession. During this time, there are many ways to cut costs that don’t involve layoffs. It is enough to be a little savvy and thrifty and look for programmes designed to speed up startup.
Here’s a checklist of smart ways startups can cut costs and save during an economic downturn:
1. Get out of the office and work remotely.
Thanks to the pandemic, most people are now used to working remotely and communicating virtually with their teams. While many companies have moved back into the office at least a few days a week, it takes a lot to keep the space unused all the time.
Either giving up the office altogether or moving to a co-working space can save a lot of money. Kate Lister, director of Global Workplace Analytics, estimates that “a typical employer can save approximately $11,000 per year for each person who works remotely part-time.”
For fully remote workers, asynchronous work helps employees maintain flexibility throughout the day and create a work-life balance that suits them and allows them to be productive.
If you’re concerned about maintaining your company’s culture, it can be useful to get advice and inspiration from companies that used remote models before the pandemic. For example, Buffer and Zapier are both remote companies with global teams collaborating around the world. Both companies believe that regular, open communication is essential to the success of remote teams.
One important thing to remember is that fully remote businesses should always budget for in-person team-building events throughout the year to promote team spirit and bonding.
2. Choose Your Cloud Provider Wisely
Many startups use cloud services for everything from basic operations like data storage to advanced functions like artificial intelligence and machine learning. But many also find themselves in a situation where they accept free cloud points and buy products and services they don’t necessarily need.
Choosing the right cloud service provider can be difficult, especially as your business grows and your needs change. Ideally, you want the flexibility to reconfigure your cloud architecture or even switch providers as their needs change, but many startups are locked into contracts with high exit fees.
Adopting a multi-cloud strategy can be a good solution, allowing you to choose the services that best suit each team’s needs and take advantage of reserved instances and other discounts. There are also new lean cloud technologies on the market, such as serverless technology and Kubernetes auto-scaling.
Don’t forget to also check out Scaleway’s Shaping Europe’s Future Program’s Next 100 Next Projects, designed to support new and upcoming startups during the economic downturn. If you choose, Scaleway covers up to 80% of your cloud infrastructure costs for 4 months.
3. Instead of paying try to optimise organic reach.
Did you know that approximately $70 billion will be spent on paid search advertising in the United States in 2021?
Instead of wasting money on advertising, focus on organic marketing strategies that will deliver the same benefits for free.
SEO best practises for organic traffic include staying on top of your keyword targeting: Tracking keyword analytics helps you constantly see what’s working and what can be improved, so you can continue to optimise your approach and increase your reach.
Another strategy is to optimise the landing page itself: make sure that its design and user experience (UX) carry the load, that the content provides value to the audience, and that you have links to help the user navigate through the various pages.
All these factors will improve your ranking in search engines. Besides being cheaper, organic marketing has many business advantages over paid advertising. If your content is more strategically optimized, it is likely to last longer and generate longer traffic streams, unlike paid ads, which are only profitable when they are served. It also helps build a more loyal following by engaging your audience at every stage of the funnel.
4. Give Freelance Talent Access to Your Network
Most companies are hiring, but what if you have talent on your team that needs to be filled to continue growing your business?
Instead of hiring full-time, consider hiring freelancers or agencies for project-based work. Think about which jobs you need all the time and which you need only occasionally or seasonally. Hiring freelancers instead of full-time employees can save employers about $11.6 per hour per employee.
In addition to the financial benefits, outsourcing is an excellent way to use different skills, knowledge, and strengths adapted to specific projects in a way that is not possible otherwise.
There is a wide range of options from all over the world, and of course, when you find a good and reliable freelancer, there is no reason why you cannot hire them for additional projects and build a good relationship. with a full-time employee.
5. Clear Tools and Order
In the digital age, companies use a number of tools and applications to conduct their business. Sometimes we have so many tools and orders that we don’t even remember what they all are or what they are for. Proper investigation and cancellation of unused orders will reduce unnecessary costs.
There are many tools with similar features, so by browsing and comparing offers, you can find a better deal that works for you and save money. Additionally, some cross-functional platforms and tools combine and integrate features so you get more bang for your buck instead of a separate tool for each task or group.
Several EU-funded and privately funded programmes are open to support start-ups during economic downturns and allow them to continue to grow and scale:
For example, the European Innovation Council (ECI) has several funding options to support everything. research and training to create business plans for market scope and development.
As mentioned before, the Scaleway 100 startup programme offers cloud financial support for two months.
Climate-KIC offers a number of grants, especially for startups that accelerate the transition to zero carbon emissions and climate change resilience.
StairwAI is a good choice for low-tech SMEs that want to develop artificial intelligence technologies.
Eurosearch is a great place to find different financing options tailored specifically for different startups.
There is no reason to panic as the recession approaches. Instead, it’s time to consider spending, find the best options and discounts, and always keep an eye out for the many financing programmes and opportunities!