“The things you regret most in life are the risks you didn’t take”– Lewis Carroll
Starting a new business
It will be quite some time before we understand the full impact of the Covid-19 pandemic. But the history of such shocks tells us two things. First, even in severe economic downturns and recessions, some companies can gain advantage. Among large firms doing business during the past four downturns, 14% increased both sales growth rate and EBIT margin.
Crises produce not just a plethora of temporary changes (mainly short-term shifts in demand) but also some lasting ones. For example, the 9/11 terrorist attacks caused only a temporary decline in air travel, but they brought about a lasting shift in societal attitudes about the trade-off between privacy and security, resulting in permanently higher levels of screening and surveillance. Similarly, the 2003 SARS outbreak in China is often credited with accelerating a structural shift to e-commerce, paving the way for the rise of Alibaba and other digital giants.
The Covid-19 pandemic has severely disrupted global consumption, forcing (and permitting) people to unlearn old habits and adopt new ones. A study on habit formation suggests that the average time for a new habit to form is 66 days, with a minimum of 21 days. As of this writing, the lockdown has already lasted long enough in many countries to significantly change habits that had been the foundation of demand and supply.
Companies seeking to emerge from the crisis in a stronger position must develop a systematic understanding of changing habits. For many firms, that will require a new process for detecting and assessing shifts before they become obvious to all.
The Business Plan provides the foundation for developing pitch decks and Information Memorandum (IM). The point to bear in mind is that VC’s only spend an average of 3 minutes, 44 seconds looking at them! (based on a study of 200 businesses) so it has to grab their attention and be credible when tested!
Why do only a fraction of companies actually scale up? G o back to when there was just the founder and perhaps one other. Add a third person and the degree of complexity triples from two to six. Add a fourth and it quadruples to 24. Expanding from three to four people has only grown the team 33% but the complexity has increased 400%!. To meet this challenge businesses need to grow leadership capabilities, scalable infrastructure and a strategic plan.
We have a long track record of helping new businesses launch and attract funding so contact us and find out how we can help you.