Startups and small and medium enterprises (SMEs) have cut marketing expenses, manpower, and operating costs in the last three months due to coronavirus. Despite this, 14 percent of startups and SMEs are considering shutting down their businesses altogether. This has been revealed in an online survey by the community social media network LocalSircles.
35 percent expected growth in business
LocalSircles has done this online survey on 28,000 startups, SMEs, and entrepreneurs in the country. 16 percent of startups and SMEs are not sure about the future. He has only cash left to run the business for three to 6 months. However, 35 percent of the startups and SMEs surveyed are expecting growth in their business.
80 percent cut fix cost
The survey by LocalSircles stated that 80 percent of startups and SMEs have cut their fixed costs. Startups have made this cut to keep the business running and to do business on a low budget. According to the survey, travel and mobility-related start-ups have been more affected due to the nationwide lockdown and restrictions on movement from one state to another. Over the past two months, several startups have fired employees, including MakeMyTrip, Udaan, Swiggy, Zomato, Lendingkart, Ola, Curefit, WeWork India, Sharechat, and Uber India.
38 percent of the funds have ended
Twelve percent of the firms surveyed said that they now have only one month left to run the business. At the same time, 38 percent say that their fund is already exhausted. Four percent of firms said they had already closed their business due to declining revenue in the lockdown. The revenues of many SMEs and startups have fallen by 80–90 percent in the last two months. In such a situation, it is becoming very difficult for them to run the business.
No success in raising funds
According to Sarva, many startups and SMEs have made considerable efforts in the past few months to raise funds, but have not been successful. The reason for this is that investors are no longer much interested in investing in startups and SMEs. Apart from this, a liquidity problem has arisen with many investors.