How can startups survive the economic storm ?

My blogging rate has gone down drastically due to the lack of internet connection in my residence [Blame it on my my recent relocation but I am sure that ThoughtsPrevail would bounce back !!!].Today, we have a guest article by Kelly Kilpatrick who shares some mantras on “How to keep your startup afloat during the economic crisis“.Kelly writes on the subject of best business schools and can be contacted via her emailNo one likes a downturn, least of all when it has to do with the economy, not just of a company or even a country, but of the entire world. It’s a domino effect that we’re witnessing now, as the mighty fall of a few big names are bringing down others associated with them and causing a global crisis the likes of which have not been seen for a long time now. When even the huge conglomerates are known to be shaking in their boots, is it any wonder that the little startups and fledgling businesses in doubt about their future? However, all is not lost, not yet. To use a cliched expression, where there’s a will, there’s a way; so hold your head high and let your positive attitude take you forward in these difficult times:

Believe in your abilities
A bird on a shaky branch is not afraid, because it is confident in its ability to fly even if the branch does give way. An apt analogy for our present situation – even if the economy of the world is unstable, as long as you believe in your abilities to make it through this bad patch, you’re going to be ok.

Adopt conservative measures
It’s not the time for risks, not when people are struggling to stay afloat. It’s best to be as conservative as you can, both in terms of current business principles and future plans.

Go back to the basics
It’s now more than ever that you need your customers to stand by you; so pick up the phone and let them know that you’re counting on their support and that you’re committed to providing them with the same kind of service they’ve been receiving all this time. True, you already have a relationship with them, but in these tough times, you must focus on re-affirming the relationships that you already have rather than looking to forge new ones.

Cut unnecessary expenses
Money is definitely going to be tight for a while, so it’s best to cut back on your overhead costs and any expenses that could be considered as frivolous. Focus on reducing the recurring expenses – these, even if not a large amount, could add up each month to a significantly huge sum.

Ditch unprofitable ventures
If there’s a department that’s not doing too well, it’s best not to persist with it at this time, not when money is hard to come by and you’re struggling to cut your losses.

Cut production costs
If you can do so without compromising on the quality of your products. If you can’t, and if you know your market is secure, raise the price of your products. Of course, you will have to deal with unhappy customers, but if you put it across to them in a positive way, they’re likely to understand.

Boost your employee morale
Unhappy employees cost you a lot in terms of time, money and productivity. So make sure your employees are mentally secure; even if you have to lay off a few of them, make the rest realize that their jobs are safe. Or if you could get them all to take a pay cut rather than force them out of a job altogether, that would work fine too.

Getting a new business to grow is hard work even in the best of times; and now that we’re going through the worst, you must work even harder to make sure you stay afloat.If you have to lay-off people, this article by Guy Kawasaki , would definitely help you in laying off people while making others feel safe .