What’s happening to entrepreneurs during this crisis?
Turkish firms are somewhat used to crises - at least more than many developed countries. However, the COVID-19 crisis is unlike anything we have seen so far and believe me Turkish startups and entrepreneurs have seen it all, from terrorism to military coup attempts, from disastrous earthquakes to slumpflation. As the founder of Mutlubiev, Tayga Baltacıoğlu wrote on Twitter that peace time is over, now it is time to be a wartime CEO.
He has quickly added a vertical to their offerings. Mutlubiev provided service to clean houses. Now they clean and disinfect them, expanding works to cars as well.
On the other hand, English Ninjas’ Ali Servet Eyüpoğlu reports that their business, which connects you with native English speakers, has grown due to higher demand.
Meanwhile, Endevaor has finished a survey with 250 entrepreneurs. I strongly advise you all to read their report.
According to their findings, more than 65 percent of respondents has a company that has been operating for less than five years, and the majority has a team with numbers of five–25. Teams with one-five people also constitute a share to be taken into account.
- 90 percent of the respondents switched to working from home, and half of those who did not, think about switching in one-two weeks.
- Participants who said that the home-office system significantly decreased the work efficiency are in the minority. A portion of 75 percent says that almost equally, there is no change in yield, a decrease of 20 percent or increase.
- The part that worries the participants the most is the loss of existing customers/not being able to find new customers, followed by delayed payments. On the other hand, the overall uniqueness of the process and the lack of anticipation of the future also worries some participants.
- Almost 65 percent of the participants took some measures to reduce expenses. Most of these measures were to cut operational expenses or expenses such as marketing / business development / purchasing. On the other hand, some people postponed their recruitment processes or taxes.
- 75 percent of the respondents foresee a decrease in 2020 targets on profit. Half of them indicated that the decrease would be between 20-50 percent.
- Apart from profit targets, the biggest financial effects are projected as a decrease in HR budgets such as the termination of financial resources, postponement or complete dismissal of funds/grants/investments. The majority thinks that these effects will occur within a period of one-three months or three-six months. In addition, effects such as cash flow management issues, the team and therefore not being able to grow the business and changing the business model due to the change in the sector dynamics are among the expected consequences.
It is obvious that the startups and scaleups need funding and mentorship very quickly. They either have to find new sources of income in their current business, they have to pivot or adjust like Mutlubiev.