Thriving In The New Normal: A Strategy Framework And Action Plan For Start-Ups And Small Businesses Post COVID-19
The COVID-19 pandemic has irreversibly transformed many aspects of the capitalist world and changed the way we operate in business forever — and it forces companies from all sectors and industries to fundamentally rethink their business strategy and future plans. Having delivered a profound shock to the world’s economy, remote working has become the norm, companies are leveraging technologies more than ever and most pre-pandemic plans are no longer set in stone or relevant.
While during the first months of the outbreak the focus was on how economies and companies can be protected during the COVID-19 crisis, it is now becoming critical to think about the future of all economic activities.
Companies from all sectors and industries must start paving the way for a new normal — and a good place to start is with an adequate post-COVID business strategy.
Generally speaking, start-ups and small to medium-sized companies may have a competitive advantage over more established organisations in adapting their business strategy, as they are more agile and quick to pivot their business models to suit new demands and trends. As such, many entrepreneurs have viewed this crisis as a huge opportunity to shape future landscapes and outperform traditional players.
But at the same time, they are also more vulnerable to market changes and fluctuations — especially those who haven’t been around for too long — simply because they don’t have as many resources to draw from.
We tried to paint an accurate picture of the key challenges start-ups and small to medium-sized companies may be facing in the times of COVID-19, based on which we’ve created a set of strategic recommendations and actionable advice that will hopefully help you to bounce back quickly and, more importantly, really thrive in the new business environment.
How much did the pandemic really affect start-ups and small businesses?
The impact that the pandemic had on the start-up ecosystems worldwide is undeniable and has been investigated in several rapid response studies.
One of these studies explored the immediate and tangible consequences of COVID-19 faced in the German start-up ecosystem. The study highlights challenges such as reduced sales along with the costs that remained fixed, and how this has significantly put pressure on the prospect of survival for these start-ups.
It also reported that the current climate is not very favourable for innovation as most key stakeholders (e.g. customers, investors) are also fully focused on responding and mitigating their own risk and uncertainties.
Although the prognostic is unclear as to how the pandemic will evolve, so far start-ups and small businesses have become familiar with, and adapted to, many challenges. Some examples are supply chain shortages, risks of laying off their people, difficult access to investment and funding, change of business plans and models, change of workplace and work dynamic, drop in customer demand … to name just a few of the most common challenges start-ups have been facing during the pandemic.
Because start-ups and small to medium-sized companies are generally more vulnerable and tend to engage in higher-risk activities than established organisations, they also have to manage constraints in accessing funding — which is why they’ve been at the centre of many COVID-19 business relief efforts by governments.
But enough of the problems — let’s look at the solutions.
A proven framework to not only bounce back but thrive in the new norm
We came across the 5Ps strategy framework by Henry Mintzberg, which the Harvard Business Review recently adapted into a post-COVID business strategy framework to prepare businesses for a post-pandemic world. According to them, a company should be aware of its 5Ps at any given time, but especially now: Position, Plan, Perspective, Projects and Preparedness. Here’s how you can use this framework to re-evaluate and strengthen your business strategy for the months to come:
1️⃣ POSITION: Think about the realistically attainable position for your start-up or small business after the pandemic. You should know where you want to head in terms of growth, but it is totally ok if you’re having to rethink and re-proportionate your goals from your initial forecasts, given the current circumstances. Remember, you are trying to regain lost ground while keeping your growth objective in sight!
2️⃣ PLAN: Create an actionable plan for your business that paves the way to reach your attainable position. This is how your strategy can help to step by step tackle disorientation that has been heightened by crisis uncertainty. Make sure you hold everyone accountable to the plan and share it openly, so everyone knows what they are working towards.
3️⃣ PERSPECTIVE: Offer a new perspective to your key stakeholders and team on how your business culture, ecosystems and social environments have changed and adapt to it accordingly. No more in-person catch ups in the office?! No problem — you’ve got weekly socials scheduled via zoom and a “just-for-fun” WhatsApp group (beware of serious topics here!) to keep the team spirit high.
4️⃣ PROJECTS: Have in mind all projects you can and have the ability to launch, then prioritise your set of projects according to what will future-proof your business. Ruthlessly disregard or park the ones that will put more pressure on your critical resources.
5️⃣ PREPAREDNESS: Assess how prepared you are to actually accomplish what you set out to do, and be realistic about it. This pertains to the preparedness of your company in terms of resources and ability to tackle new business challenges and risks, but also the preparedness of your team after the draining COVID-19 months.
6 things to do today to help you come out of the pandemic stronger
Now, before you take out your big whiteboard and re-work your entire business strategy, to not only survive but thrive in the new normal, here are a few more actionable steps and “quick win tips” that you can consider implementing in your company:
✅ Tackle your short-term challenges first: What is probably top of your mind is, first and foremost, your short-term financial needs. Explore gathering capital through internal measures, governmental support, loan guarantees, direct lending, or start-up grants … This is also a great time to renegotiate those supplier contracts!
✅ Connect and learn from others. Look for post-COVID business support initiatives that offer guidance to start-ups and small businesses in times of crisis. You can also enter a support program or connect with investors and entrepreneurs remotely from all over the world. A great platform we discovered is Lunchclub, where they connect you to interesting humans from all walks of life, based on what you are looking for and what your interests are.
✅ Instil an entrepreneurial mindset in your employees: The reason why start-ups and small businesses have it easier to pivot and change without mentally losing half of their workforce, is because people who work in this environment usually have a very entrepreneurial mindset and embrace adversity. Make sure that your team knows that these are particularly tough times but that it can also be a huge opportunity for personal growth.
Tip 🔥: Start by shedding more light on the purpose behind what each and everyone in your team does, make a lot more space for new ideas, create a safe no-pressure environment that promotes creativity and realness and empower people to take ownership of their role within your business.
✅ Always look for opportunities in adversity: Many established companies have their fixed roadmap and plan 12–24 months in advance and, because of that, miss out on the ‘low hanging fruit’ opportunities because they aren’t quick or flexible enough to jump on them. Start-ups and small businesses in general, on the other hand, are not as rigid in their planning and processes and can therefore always find opportunities in adversity. You might find a lot of new opportunities and business ideas emerging from this crisis that you previously didn’t think were viable — but now these have become necessary to survive and thrive.
Tip 🔥: If you have the capabilities to quickly launch and test new ideas yourself, go for it. Otherwise, you might want to think about partnering with other businesses to help cater to the current demand.
✅ Adopt a profit-first approach: Carry as little liabilities as possible to adapt to changing market conditions and make it a habit to always track expenses against revenue stats. During this pandemic, it is of utmost importance for businesses to conduct a proper assessment of fixed and variable expenses as well as actual revenues. It will give a clear picture of where your company stands financially and help you to plan ahead more consciously.
Tip 🔥: We’ve seen many businesses considering adopting the remote work model even after being back to normal (whenever that is). Think about how much time and money you could save time by permanently giving up your office space and fully adapt to remote working culture.
✅ Show the human side of your business & communicate more with your customers: We are all in this together, so the ideal way is to stay transparent with your consumers about what your business is going through. Customers can empathise with companies facing a crisis, as long as the communication is transparent. After all, we are humans trying to do their best — so show this side of your business more if you truly want to connect with your audience.
While the uncertainty discourages any experimenting, we hope you take away at least one thing: many successful and innovative businesses have emerged from periods of crisis. Many we all know today were in fact started after the global financial crisis. So, if you have a million-dollar idea, go for it. COVID-19 business opportunities are here now and won’t last forever! We’ll soon reflect on a few of our own lessons learned from launching this company (yes — humanplus was born during the pandemic!) and how we — despite all the challenges — have managed to grow nicely month by month and having fun doing so.
Whether you are a conscious business planning to skyrocket post-COVID, or just want to connect with us, please do visit our website to learn more about humanplus or book a 30 min strategy call (free) with Kat here.
Big thanks to Manal Belghali for the research and invaluable contribution to this article.