Advice For Funded Small Businesses And Those Seeking Funding
Advice For Funded Small Businesses And Those Seeking Funding
“Spend every dollar as if it were your last.” This is a quote from Sequoia Capital, a leading venture capital firm in Silicon Valley. No, this was not a quote from yesterday but from 2008 when we entered what would be called the “Great Recession.” While the coronavirus is probably not going to lead the USA or the world into a recession, it certainly will cause a significant disruption.
Perhaps, not so ironically, Sequoia just issued another message to its funded companies last week where they communicated that the “Coronavirus is the black swan of 2020.” The message had three parts. One, stay healthy and safe regarding family and friends. Two, disruptions are/would be occurring as it related to business revenue, supply chain and travel. Three, they offered advice and counsel across six major areas that included cash runway, sales and marketing forecasts and critical operations expenses.
While the effect of the coronavirus seems surreal and that opportunities are limited, remember this: lots of successful companies have been created in downturns. Adversity sometimes brings out the best in us as we move to be as creative and innovative as possible, not to succeed but to survive. Uber, AirBnb, WhatsApp, Square, Pinterest, Slack and Twilio were all started in 2008 and 2009.
Here is some advice that pertains to funded startups, startups seeking funding and also to small businesses.
Manage your cash. You know the saying, “save your money for a rainy day”; well, that day is now. Examine the cash you have on hand and imagine how you could make it last for at least six to nine months. And it you don’t have enough cash on hand, look at how you could cut expenses or increase sales by doing something different.
Examine or revise your sales forecasts. Don’t fool yourself and believe your most optimistic projections. Get very realistic. The goal is not to hunker down and hide but to devise or brainstorm ways you could actually sell more of your products or services. Perhaps it’s new markets, customers or leveraging a partnership.
