How to Survive a Crisis

Crowdsourced Advice from Latvian Startup Association Members

After the turbulent first months of the year, startups are bracing for both opportunities and uncertainties. Latvian Startup Association “Startin.LV” joined forces with local startups and investors and summarised learnings that helped other companies weather the storm.

Here are 9 practical tips you can apply to your startup today!

1. Reducing salaries

Reducing salaries is a difficult move because it both directly impacts the employee’s income and decreases the company’s morale. To make the change, introduce it as a temporary change and present the team with a plan to get back to the previous salary, maybe introducing a 4-day workday on the account of the salary cut in the short run.

2. Do team cuts as quick as you need to

If you have no other choice than to scale down your team, do it as soon as possible and try to do it once so the company doesn’t burn limited resources. In this way, you’ll have both a severance package for those who you need to lay off and dry powder to survive.

The best thing that you can do for your former employees is to help them find a new job — use your connections to connect them with the prospective employer. You can also get in touch with Your Move (rudolfs@yourmove.lv) — hopefully, they can connect them to another company hiring now. This way your former employees will appreciate you going the extra mile.

3. Clear & honest communication from the CEO

Any organisational changes are affecting company’s culture, therefore, the most important thing to do for your team — to be firm and honest. Being able to trust management and CEO is crucial in this situation. Your employees deserve to get answers to their questions (even to unpleasant ones).

Most importantly — don’t give promises that you cannot keep. One tip here is to host a weekly all-hands meeting with all your employees and enable an online tool (e.g. sli.do) to ask real-time questions. Although the questions might be brutal, it gives the chance to everyone to get their voice heard.

4. Cut costs and improve operational efficiency

The first one is an obvious one. Cut your costs wherever possible. Do you have a spacious office? Using expensive but non-essential equipment? Paying for external services or paying more for things that can be more efficient if outsourced? All these things can sum up to a large amount of money on a monthly basis. This is your chance to start from zero — re-plan all costs that your company is spending. Look at places that are not obvious at first, even credit card processing fees can be lowered resulting in huge gains.

5. Assume that many of your current customers will leave or delay purchases

In other words, prepare for the worst. Take a fresh look at your business model starting with revenue and ending with product line or services. Is it sustainable? If not, don’t mask the reality and wait for the dead-end but make decisions fast. Assume that many of your customers will leave or delay purchases, then figure out what your business could look like. The hard truth is that if your business model didn’t work well before the crisis, most likely it will not work better now.

6. Make quick & measured decisions

Need to implement ambitious changes, redesign your business model or lay off people? Don’t waste time. Leadership is bringing clarity to your team. Think through, get necessary advice and plan time for implementation. Despite the fact that management decisions usually take time, this is not the time and place for hesitation.

7. Don’t be afraid to ask for help

This time can be exhausting for employees as well as for the managers and leaders although they are expected to be all mighty, they are not. If you are struggling mentally or physically, don’t be afraid to ask for help from your friends, family, co-workers, and other founders. We invite all “Startin.LV” members to share and ask for advice on our internal channels as well, or just drop us an email on info@startin.lv if you need help with anything specifically.

8. Fundraising in time of the crisis?