Although many view difficult times as a great calamity for entrepreneurship, they still can be manageable. Moreover, crises make founders reconsider the company’s strategy and look for new incentives for development. So take advantage of hard economic times to gain new opportunities, increase market share, optimize business processes, and facilitate the acquisition of new partners.

Reduce costs
Although small budget items may seem insignificant, they keep your startup afloat. Think about unused software licenses, T&E (travel and expense), extra office spaces, unnecessary equipment, and lunches for free. To achieve maximum effect, make as many small cuts as possible to secure the enterprise.

Reduce costs as much as possible. Expensive repairs or complex marketing research should be postponed for better times. Analyze the prices of your suppliers’ competitors – perhaps, you will find someone whose prices will be more reasonable.
Let time work for you. You cannot stand idly by while your company is about to close. Involve the entire team in saving your startup and explain what each member can do in order to help.
Be honest
Some managers are afraid to make a negative impression about the company`s state. However, honesty is the best policy. If you are sincere with employees, they will definitely appreciate it and take cuts as necessary measures.
Tell your team members what problems your startup is experiencing now and what kind of sacrifices you have to make to tackle them and let your business thrive.
Allocate resources wisely and rethink your team`s structure
In uncertainty, you should allocate your finances especially carefully. There are several levers to save money and the main one is compensation.

Take the initiative in saving jobs by using a stock payout. It is important to understand the different motives of people – for some, money is crucial, while others will prefer to receive shares as a reward. Segment employees according to their needs – cash or equity. This way, you can create a win-win situation for everyone, while improving your financial situation, strengthening long-term loyalty, and preserving jobs.

However, compensation is necessary not only for your staff. In vague times, a wide range of suppliers will be open to accepting shares instead of cash. These can be landlords, consultants, spare parts suppliers, insurance companies, or mortgage holders.

Manage risks
Try to minimize risks by streamlining your capital. Reduce the amount of loans as much as possible. If the demand for your products drops, monthly loan payments can ruin your startup. It is better to get rid of foreign currency loans altogether: repay them ahead of schedule if possible, or try to negotiate with the bank about their reissue in your country currency.

If your company is related to import, it makes sense to look for its local alternatives. In case it`s not possible, you should insure your currency risks. This can be done with the help of forward currency contracts which allow you to fix the exchange rate on the day of the contract conclusion and acquire it later.
Enhance your sales system
In order to stay afloat you should maximize your sales. Adjust your target audience since the demand can shift to another customer segment due to the crisis. Develop new standards and a rewarding system for sales staff. Take advantage of various marketing channels, from online ads to billboards. Arrange promotions and special offers to attract additional customers.

Be creative in the search of new fund sources
Traditional investment methods such as venture firms and startup accelerators may lose relevance in the light of the economic collapse. However, there are faster and even more profitable sources for difficult times.
We advise you to negotiate with clients of your portfolio companies about the patents sale. Strategic clients who consider you an important part of the business will be happy to acquire access to your intellectual property. In exchange, you receive an advance payment on a multi-year contract. In other words, they gain both security and funds.
Nevertheless, transactions should not be limited to customers only. You can also negotiate with partners, suppliers, law firms, landlords and employees who are interested in your company.
Identify what niche your company occupies in the market. This will help you react quickly to changes in the market environment and adjust your plan in time.
Also, pay attention to public procurement or tenders conducted by large organizations. Perhaps, you will find new customers or hot markets. The proximity to “big money” enables you to survive the crisis much easier. For example, at the peak of the Great Depression, the US government started to build highways. This initiative helped to reduce the unemployment rate and help many companies to survive.

Maintain partnerships
Even though the situation is forcing you to break relationships with your stakeholders or partners, avoid it by all means. If you realize you will not be able to fulfill your obligations on time, be sure to inform the bank or partner about it. Although the crisis will pass, your reputation will remain forever. So make sure you treat your partners honestly in order to keep your startup`s credibility.

Keep hiring employees
The economic downturn is a great time to look for talents. It is during recessions that many creative people appear. In 2001 and 2008, many businesses lost momentum because they stopped employing new specialists. In fact, they lost interest in hiring. But by stopping the flow, you are unlikely to resume it further.

In tough times, entire recruitment departments are prone to leave their companies. However, it`s a huge mistake. Don`t stop hiring new talents during the crisis to keep up with major tasks. Invest in key positions before they become difficult to fill.
Restructure your startup if necessary. Think in advance whether there are niches in the market where your company could go in case of a strong drop in demand. For example, a clothing atelier may well be converted into a clothing repair company as an anti-crisis measure. In difficult times, people buy fewer new things but repair more often.
With all the negative consequences, an economic collapse can become a good ground for development despite all adversities. Make smart choices and you will see the results. Of course, it means a lot of stress but the return is worth it. In these times, you should act with a strong imperative, otherwise, your startup may die.
If bankruptcy can be avoided, fight for your project. Focus on making assets more productive and successful. Invest in your sales department and the rest of the revenue chain. Look for new opportunities to grow, and one day they will definitely come. By believing in what you are doing, you will reach success even in the hardest times.