The Entrepreneurs’ Perspective on Covid-19 and the Business Environment
Chandigarh Angels Network (CAN) is proud to present its report titled The Entrepreneurs’ Perspective on Covid-19 and the Business Environment.
This unprecedented crisis has had a significant impact on our lives and imposed a “new normal” on businesses too. Being a part of the startup ecosystem for the last five years, CAN wanted to gauge the impact of Covid-19 on entrepreneurs through a survey. 105 entrepreneurs from diverse sectors across India participated in the same.
A vast majority of respondents (70.5%) stated that the viral outbreak has either significantly or moderately impacted their operations, leading to a decrease in cash flows for most of them (65.7%). However, over a quarter of the entrepreneurs saw no change in their cash flows.
As expected, with Covid-19 lowering the paying capacities of the public, the biggest concern for entrepreneurs (24.8%) was the fall in demand and revenue. Apart from this, the other strong concerns were difficulty in fundraising (22.9%) and running out of cash (19%).
Startups have had to make significant changes to their operations to stay afloat. Some of the key decisions that the respondents took included cutting down unnecessary operational costs (60%), reducing sales and marketing spend (26.7%) and compromising on salaries (25.7%). However, surprisingly, about 24.8% of entrepreneurs admitted to making changes and carrying on as usual.
With many industries being affected by the crisis in one way or another, 62.9% of the participants were pessimistic about their current market while only 23% were optimistic. Additionally, a majority (72.4%) stated that they had made pivots or were planning to make some to attract new customers. Out of these, about half had made minor pivots while 22% had made major ones.
Out of the 59 participants that were in talks with investors for funding, there were two prominent sides when it came to the effect Covid-19 had. While 32.6% had completely halted their fundraise process, 34.8% had made no change in their plans (such as reducing the valuation or round size) and were aggressively pursuing investors. As far as changes in the attitude of investors are concerned, 60% felt that they were responding slower than usual, while 22.2% saw no change. Sadly, 17.8% expressed that there was no response.
It is hard to comment as to when the crisis will come to an end and will give businesses a chance to accelerate again. As far as the entrepreneurs’ opinion is concerned, close to 40% said that their company should take between 3 and 6 months to recover while 28.6% thought it would take them anywhere between 6 to 12 months. On the contrary, more than half of the respondents felt that the economy overall would take at least a year to recover. One third felt that it would take India 6 to 12 months to redeem itself and get back on track.
Now, even as the economy is revived and businesses are allowed to operate, over 55% of the survey participants predict a significantly changed work culture. In comparison, 41% feel that there will be a moderate change.
However, it was most heartening to see that 80% of entrepreneurs were confident that they could tackle such a crisis efficiently in the future. They have learnt, adapted and grown during testing times- values that are at the very heart of entrepreneurship. While only time will tell how our “new normal” will really look like, it was essential to hear from the startup community about their strategy and thoughts in the Covid-19 crisis.
