With a global recession looming, European startups are feeling the pressure. Investment opportunities diminish and customer acquisition becomes more difficult. So what can startups do to survive in this day and age?
From hiring cuts to budget cuts, founders are preparing to get through the recession unscathed. There are many ways to cut spending in this day and age without layoffs, it’s about being a little smart and frugal and looking out for programs designed to boost startups.
Here’s your checklist for smart ways startups can cut back 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 virtually with their teams. While many companies have returned to being in the office at least a few days a week, it takes a lot to maintain a space that isn’t used all the time.
Either ditching the office altogether or moving to a co-working space can save a lot of money. Kate Lister, President of Global workplace analysis estimates, “a typical employer can save about $11,000/year for each person who works remotely half the time.” For those going completely remote, asynchronous working will help employees stay flexible during the day and create a work-life balance that suits them and allows them to be most productive.
If you’re concerned about preserving your corporate culture, it might be helpful 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, with global teams working together from around the world. Both companies believe that frequent, open communication is essential to the success of their remote teams.
An important thing to remember is that completely remote companies should always budget for in-person team building events throughout the year to promote 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 find themselves in a situation where they accept free cloud credits and end up buying products and services they don’t necessarily need.
Choosing the right cloud provider can be tricky, especially as the business evolves and your needs change. Ideally, you would like the flexibility to reconfigure your cloud architecture or even switch providers as these needs change, but many startups are locked into contracts with high outgoing costs.
Adopting a multi-cloud strategy can be a good solution, allowing you to select the services best suited to the needs of each of your team and take advantage of reserved instances and other discounts. There are also some new cost-saving cloud technologies on the market now, such as serverless technology and Kubernetes autoscaling.
Also check out Scaleway’s Next 100 startups shaping Europe’s future programme 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 was spent on paid search advertising in the US in 2021?
Instead of wasting money on advertising, you can focus on organic marketing strategies that bring the same benefits at no cost.
Best SEO practices to help with organic traffic include staying on top of keyword targeting: monitoring keyword performance analytics will help you keep a continuous overview of what’s working and what can be improved, so you can fine-tune your approach you can keep optimizing and improving your reach.
Another strategy is to optimize the landing page itself: make sure it has a loading-friendly design and user experience (UX), that the content adds value to the audience, and that you have backlinks to help the user move between different pages of your website. navigate. Place.
All these factors will improve your ranking in search engines. In addition to being a cheaper option, organic marketing also has many business benefits over paid advertising. When your content is more strategically optimized, it is more likely to last longer and provide long-term traffic flow, unlike paid ads that 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 a hiring freeze, but what if you have some talent gaps in your team that need to be filled in order for the company to develop further?
Instead of hiring full-time, consider hiring freelancers or agencies to take on project-based jobs. Think about which features you need on an ongoing basis and which you only need occasionally or seasonally. It is possible to hire freelancers instead of full-timers save employers about $11.6 one hour per employee.
In addition to monetary benefits, outsourcing is a great way to access different skills, expertise and strengths tailored to specific projects in a way not otherwise possible.
There is a wide range of options to choose from all over the world and if you find a good and reliable freelancer there is of course no reason why you can’t 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 know what they are or what they are for. Doing a good clean-up and canceling subscriptions for anything that isn’t used helps cut down on unnecessary expenses.
There are many tools that have similar features, so if you browse to compare offerings, you may be able to find a better deal that suits you and save a little money. In addition, some cross-functional platforms and tools consolidate and integrate functions, so you get more value for money instead of a separate tool for each task/team.
6. Take advantage of financing options
You may be taking all possible measures to save money, but sometimes an extra helping hand can provide a little more security. There are several open programmes, 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 building business plans to scale and develop for the market.
- As mentioned earlier, Scaleway’s 100 Startups program offers 24 months of cloud funding support.
- Climate KIC has a number of grants available specifically for startups accelerating the transition to low carbon and climate resilience.
- For low-tech SMEs that want to develop AI techniques, Trap is a good option.
- Euro search is a great place to find a range of funding options tailored specifically 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 financing programs and opportunities out there!