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Bure Valley Group is an investment introducer platform which links successful investors with exciting, innovative UK startups seeking funding. This content is for information purposes only and should not be taken as financial or investment advice. 

The cost of living crisis is putting more pressure on UK households and businesses in 2023 compared to previous years. Startups, in particular, need to navigate these economic waters with prudence given their already precarious position in the business lifecycle.

Building financial resilience will help startups to weather further storms, such as further rises to interest rates and inflation. In this guide, we offer ideas to help founders and their investors strengthen their moorings. 

To find out more about our EIS pipeline and other opportunities, visit our portfolio page here. For enquiries regarding our latest projects and funding, you can reach us via:

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Diversify revenue streams

When economic conditions are difficult and unpredictable, it is not always clear how the customer base will react. During COVID-19 in 2020, for instance, few could have predicted the widespread remote working that prevailed in the UK due to social distancing rules. This had a huge impact on highstreet shops which no longer had the footfall they once did.

Sometimes, it takes a big of creative thought for startups to conceive of new revenue streams that help provide some much-needed diversification. However, it is not impossible.

For instance, perhaps a website design agency could diversify its offering to also include digital marketing and content creation services. An e-commerce platform might look at diversifying its product range and breaking into new customer segments.


Retain a lean structure

Startups cannot afford to take on the financial “bloat”, or overheads, that many large businesses can manage – even in the best of times. When the economy is unhealthy, maintaining a “lean” business model is especially crucial.

Of course, this requires careful monitoring and management of expenses. However, it might also involve thinking out of the box to reduce needless costs. 

For example, is your startup operating in the most cost-effective way for its business premises? In some cases, relocating or allowing more flexible working options for employees (thus reducing the need for office space) can help you cut costs.


Create contingency plans

Does your startup have a set of “backup” plans in case things go wrong? 

For instance, if interest rates go up further, how might the business access capital if business loans become more exepensive or difficult to get?

If inflation rises, how might this affect the startup’s input costs? Is there sufficient bargaining power to help keep the threat of rising supplier costs under control? 

If supply chains are disrupted by political or economic events, how might the startup continue to meet demand from customers? 

The Russian invasion of Ukraine highlighted how the world is highly interconnected for food and energy. COVID-19 reduced the supply of semiconductors. These events were significant but difficult to predict. Startups can prepare, however, by considering the weak points in their model.


Practice effective cashflow management

A healthy stream of cashflow is vital to help cover operational expenses, invest in growth opportunities and navigate unforeseen circumstances.

This means having dedicated team members to watch and optimise the money going in and out of the business such as payroll, bills, purchases and investments. 

A clear system for tracking payments will be essential here. Sales invoices should be issued in a timely manner, helping to mitigate late payments from customers. The less time founders can spend chasing invoices, the more time they have to manage and grow the business.

The financial situation of a startup can change on a daily basis. A new forecast might be needed if a major client is suddenly lost. Keeping an updated cashflow forecast can keep the business on a ready footing.

For example, have stock and work-in-progress levels been reviewed recently? How much capital is invested into inventory? Have contractual agreements with suppliers been checked, such as costs and payment terms?


Leverage technology

The more a startup can utilise automation and technology, the more potential it has to become “lean” – enhancing efficiency, reducing costs and improving overall financial resilience.

For instance, could digital tools be used to support your sales team – by providing automated “follow-up” emails if customers have not replied in a while? Could cloud-based accounting systems take some of the heavy lifting away from your staff, freeing them up for some of the cashflow management tasks mentioned above?

Any technology that can help a startup’s small, time-poor team focus on strategic activities that drive growth should be considered. Examples of processes which could be automated include data entry, document management, inventory management and order processing.

Automation helps to reduce human errors. It also streamlines workflows, reduces bottlenecks and optimise resource utilisation. 



Interested in finding out more about the exciting startup projects we have on offer to investors here at Bure Valley Group? 

Get in touch today to start a conversation with our team and discuss some of the great investment memorandums we have available here:

+44 160 334 0827

 [email protected]