How to prepare yourself for future disasters like COVID-19 Coronavirus Pandemic.
It’s a very challenging situation, We all are facing from Jan 2020 to Present. we remember when we heard first news about COVID-19 Coronavirus that time didn’t take it seriously.
As a startup, you need to be prepared for this kind of disaster (COVID-19 Coronavirus) to keep your company operation running as well as to take care of employees.
We aren’t the ones facing the financial crisis during this time there are lots of startups on the same boat. One of our friend's well-established startup company having more than 300+ employee started to the liquidation process. Nobody prepared when they have an idea to start a new startup.
Secondly, Funding is fine you are able to raised money even it is series A or B so on. But the challenging situation is how you planned the budget so you can survive longer as well prepared for such kind of Pandemic.
We are a team of 10 working for different clients to develop Mobile, Web applications as well as Cloud solutions.
- Web Team (2 Engineers)
- Mobile Team (2 Engineers)
- DevOps/Cloud Team (2 Engineers)
- UI/UX Team (2 Designers)
We are using a coworker space which cost us around $600 to $1000 per month include services such as
- Plug & Play Workspaces
- Meeting & Event Spaces
- Business Lounges
- Well-Stocked Pantry
- High-Speed WiFi
Payroll cost us around $40k per month
Each month we have to keep $50k to $70k to run the company operations.
Challenge We Faced During Coronavirus COVID-19 Pandemic
From Jan 2020 to Mar 2020 everything was running fine as well we are working remotely from home from March 2020. We are working on 4 different projects starting from Feb 2020 estimated cost of that projects are around $150k to $200K.
Furthermore, we have to finish those 4 projects by the end of April, and Unexpectedly we heard about the whole month lockdown in April and our clients asked us to hold projects we were working on. We were not sure the lockdown will be for 1 month or it will be extended further but we will not receive money from the clients during the lockdown whereas we have to pay to employees for April month $40k.
Lastly, at the end of April month lockdown extended to 1 month more till May so now, we have another 1 month to pay to employee $40k. We paid $80k for 2 months from April to May payroll.
How we managed to pay $80K
Thanks to our CEO who planned very well budget at the start of each year. How we planned will share it with you.
We always have backup plans for example each year we know how much we have to spend for example.
Assume you are starting your business or startup company you have $500k for 1 year to run the company.
Then you must count your expense as we showed you earlier. In our case each year we spent $50 to $70k to run the business. But we always keep a 3-months expense for backup or emergency use. Which is
$70,000 x 3 = $210,000 ( $70k for 3 months)
Each year we have $210,000 for backup out of $500,000
Whenever you start a new company or already running you must keep a 3-months expense for backup or emergency use.