What Does a Global Economic Crisis Hold for Start-ups?

What Does a Global Economic Crisis Hold for Start-ups?

What Does a Global Economic Crisis Hold for Start-ups?

The entire world has shaken up now from the Coronavirus Pandemic and the resulted Global economic crisis. Stock markets have crashed several times and industries from all the sectors are affected. Tech start-ups have been hit badly as it would be more difficult for them to raise capital, search investors, and develop their products. It requires expertise and guidance of a superior mobile app development company in India like Brill Mindz who helps you to take proper steps in the digital world to sustain this difficult time.

What is the effect of the pandemic on industries? and What Does a Global Economic Crisis Hold for Start-ups?

People are affected by the reduced inflow of money in all the sectors. The majority of companies are delaying investments as a measure to trim costs in all segments. People are not spending money like before and delaying the decisions of making huge purchases and travelling out for works. All these measures of social distancing and following isolation norms are accurate medically and much needed to curb the spread of the epidemic. But inversely, this has led to a massive drop in corporate and customer demand that is causing a global economic crisis. Some companies have asked employees to work from home, but the economic costs in terms of delayed projects and investment are huge. Hence start-ups must take necessary measures to handle this crisis.

What does a Global Economic Crisis Hold for Start-ups?

A Substantial Drop in Productivity:

Even though tech companies have asked the employees to work from home, it could have a risk of a decrease in productivity. The environment would not be similar to a regular office, and the dependency works could be delayed. If they neglect taking necessary steps to strategize works and have meetings at regular intervals, this could lead to a bigger problem.

Issues with Investments:

Start-ups will have good ideas, but they are not enough to run the business. It requires a well-planned business strategy and pitches this to investors for getting funds. But with the current issue, it would be very difficult for companies to get investments easily. This is a time where cost-cutting is running across all industries, and investors are hesitant to provide funds to even smartest ideas. Optimizing and reviewing all kinds of expenses cannot be ignored by start-ups.

Interruptions in Supply-chain:

Coronavirus has its biggest impact on supply chain management. The manufacturing field is facing the biggest financial loss in this period. If your start-up is providing software services in manufacturing, the crisis could lead to delays and variations in product quality finally affecting cash flow.

What can start-ups do to be on track?


Start-ups usually face the problem of cash flow. Hence, they have to plan well to conserve their capital. This is very crucial as there cannot be preventive measures taken for this in later stages. It is important to have a sufficient amount in hand by trimming all the unnecessary expenses. Follow a strategy to increase productivity with just minimal required funds. Even if the Coronavirus crisis eases its hold much sooner, the after-effects will continue for a longer time.

Work from home for employees:

Remote work is the best option for companies to prevent the further spread of coronavirus. Many top organizations are following similar advice and insisting on maintaining social distancing norms. But the success of this depends on the strategy developed by the specific companies in having regular meetings when required to solve dependency issues.

Conduct Online meetings:

With the social distancing norms in place, many events are cancelled or delayed. But you could keep the show going by having online meetings with clients or any possible investment opportunities. Many online tools aid you in this process and you could grab the opportunity in this period. People could be hesitant to take the initiative, but you could step on the gas and be aggressive in your approach by not delaying any prospects.

Delay hiring:

Start-ups could focus on certain cost-cutting measures like delay hiring processes. They could manage the tasks with existing employees with careful strategizing of all the processes. Capital spending plans must be altered according to the situation and changing market trends.


If you are a company that works on providing software services for online education, remote works, or OTT platforms (online entertainment shows and movies), then this could be the best time for investment. You could think of creative plans to provide the best options for people who are more into looking for online activities for improving knowledge or getting unlimited entertainment. This could be the best time for you to execute your ideas as you will find investors who are much interested in providing funds for this sector.


As start-ups will face many difficulties in the coming days especially with receiving funds. Companies that adjust and sustain this period will be in the path of growth and reap benefits once the pandemic eases out. Online works and great shift towards start-ups are the next big thing that is lined up in the market. Therefore, you need to plan all those strategies that will help you to survive this period effectively.

Bottom line:

There is no certainty over the duration and overall impact of the upcoming financial crisis and there are many results possible. The predictions from may source tell that the impact could be worst but not extended. Whatever may be the situation, start-ups must be well prepared in advance to handle the economic crisis arising after the drop of coronavirus spread. The company must be flexible and adapt smart strategies that could help in meeting apt opportunities. For all this to be possible, you must associate with a reliable digital partner who will help you in adapting the right methodologies and cost-effective measures. If you are looking for a trusted digital partner for your start-up who could help you in adopting effective measures, your best bet should be the best mobile app development company in IndiaBrill Mindz. 

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