With a global recession looming, Europe’s startups are feeling the pressure. Investment opportunities are dwindling and customer acquisition is becoming increasingly difficult. So what can startups do to survive during this time?
From hiring freezes to spending cuts, founders are preparing to weather the recession unscathed. There are many ways to cut spending during this time that don’t involve layoffs, it’s just a matter of being a little smart and frugal and looking out for programs designed to give startups a boost.
Here’s your checklist of smart ways startups can cut spending and save during the recession:
1. Scrap the office and go completely remote
Thanks to the pandemic, most people are now used to working remotely and interacting with their teams virtually. Although many businesses have returned to being in the office at least a few days a week, maintaining a space that isn’t in constant use costs a lot.
Either giving up the office altogether or moving to a coworking space can save a lot of money. Kate Lister, President of Global Workplace Analysis According to estimates, “a typical employer can save about $11,000 per year for each person who works remotely half the time.” For those who work entirely remotely, asynchronous working helps employees have flexibility during the day and a Creating a work-life balance that suits them and allows them to be most productive.
If you’re concerned about maintaining your corporate culture, it may help to get some tips and inspiration from companies that operated remote models before the pandemic. buffer and Zapier, for example, are both remote-first companies where global teams from around the world work together. Both companies are finding that regular and open communication is essential to the success of their remote teams.
One important thing to remember is that fully decentralized companies should always budget for in-person team building events throughout the year to encourage team spirit and connection.
2. Choose your cloud provider wisely
Cloud services are used by many startups for everything from basic tasks like data storage to more advanced functions like AI and machine learning. But many also end up in a situation where they accept free cloud credits and end up consuming products and services that they don’t necessarily need.
Choosing the right cloud provider can be difficult, especially as business evolves and your needs change. Ideally, you want the flexibility to reconfigure your cloud architecture or even switch providers as those needs change. However, many startups become locked into contracts with high exit fees.
Adopting a multi-cloud strategy could be a good solution, allowing you to choose the services that best suit your team’s needs and take advantage of reserved instances and other discounts. There are also some new cost-saving cloud technologies on the market now, such as: B. Serverless technology and automatic scaling of Kubernetes.
Also check out Scaleways Next 100 Startups Shaping Europe’s Future Program designed to support emerging startups during the recession. If selected, Scaleway will cover up to 80% of your cloud infrastructure costs over a 24-month period.
3. Optimize organic reach instead of paying for a boost
Did you know, around $70 billion were spent on paid search ads in the US in 2021?
Instead of throwing money into ads, focus on organic marketing strategies that get the same benefits at no cost.
One of the best SEO practices for helping organic traffic is staying on top of your keyword targeting: Monitoring keyword performance helps you stay on top of what’s working and what can be improved, so you can Further optimize your approach and improve your reach.
Another strategy is to optimize the landing page itself: make sure it has a loader-friendly design and user experience (UX), that the content provides value to the audience, and that you have backlinks that help the user find themselves move across different pages of your site? site.
All these factors improve your search engine ranking. Aside from being a cheaper option, organic marketing also has many business advantages over paid ads. When your content is optimized more strategically, it’s likely to last longer and see a longer flow of traffic, as opposed to paid ads, which are only profitable when live. It also helps build a more loyal following as you engage the audience at every step of the funnel.
4. Cast your net in the freelance talent pool
Most companies implement hiring freezes, but what if you have some talent gaps on your team that need to be filled in order for the company to move forward?
Rather than hiring full-time, consider hiring freelancers or agencies to take on jobs on a project basis. Think about which items you need on an ongoing basis and which only occasionally or seasonally. Hire freelancers instead of full-time employees save employers around $11.6 one hour per employee.
In addition to monetary benefits, outsourcing is a great way to access various skills, expertise and strengths tailored to specific projects, in a way that is otherwise not possible.
There is a wide range of options around the world and of course once you have found a good and reliable freelancer there is no reason why you cannot hire them for additional projects and build a good relationship like you would with a full-time employee.
5. Clean out your toolbox and subscriptions
In the digital age, companies use multiple tools and apps to run their business. Sometimes we have so many tools and subscriptions that we don’t even remember what they all are or what they are for. Good decluttering and unsubscribing from anything not in use reduces unnecessary spending.
There are many tools with similar functions. So by browsing and comparing the offers, you might be able to find a better deal that suits you and saves you some money. Some multi-use platforms and tools consolidate and integrate additional functionality, giving you more bang for your buck rather than having a separate tool for each task/team.
6. Use funding opportunities
You might be taking all the measures to save money, but sometimes an extra helping hand can provide a little bit of reassurance. There are several open programs, both EU-funded and privately sponsored, to support startups during the recession and enable them to continue to grow and scale:
- the European Innovation Council (EIC), for example, has a range of funding options to support everything from research and mentoring, to business plan creation, to scaling and development for the market.
- As mentioned, Scaleway’s 100 Startups program offers cloud funding support for 24 months.
- Climate KIC offers a range of grants specifically for startups that accelerate the transition to zero-carbon and climate-resilient development.
- For low-tech SMEs looking to develop AI techniques, Stairs is a good option.
- Eurosearch is a great place to find a range of funding options specifically tailored for different types of startups.
There is no need to panic as the recession approaches. Instead, it’s time to spend wisely, find the best options and discounts available, and always be on the lookout for the many grants and opportunities!
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