These days you might have heard and read a lot about the success stories of young entrepreneurs who have achieved great heights at an early stage of their lives.Besides,hard work and self confidence there are some other driving factors that lead them on the path of success.
In the present scenario, its very common for young people to quit their jobs and invest in their own startup companies.Starting a new business is not an issue,but running it profitably and moving your product or services in the right direction seems to be a big deal.You may face a lot of hindrances that may even lead to failures.But,that might just prove to be your ladder to success.
Moreover,you tend to personally finance your business until you get an initial round of funding.This ends up in mixing personal finances with the professional expenses.
Hence,Good Financial Planning plays a pivotal role in turning your small business to a successful company.
So,here we are discussing 5 Financial tips for Startups that might be helpful in scaling your business to new heights.
5 Financial Planning tips for Startups in India :
1. Set your Goals well in advance : As and when you think about starting your own venture,set well defined business goals for yourself.Its always a good practice to fix targets to achieve in the long run.You should examine the various aspects of your startup and set specific guidelines to pursue your goals.
e.g. If you are in the services line,make a strategy as to what kind of service you will provide,how to crack potential clients and procuring new projects,to meet deadlines and above all provide quality services.
2. A well planned Budget is the key to Success :Budgeting is the most important factorin running a successful business.Well planned budget is the key to overcome your problems.You should be clear as to how much initial capital you can invest into your business.Set a separate budget for the initial setup and operating expenses like
- Initial Setup cost.
- Infrastructure cost.
- Assets/Business equipment.
- Business development.
- Advertising cost.
- Other Marketing strategies – Online and Offline.
- Employee costs etc.
Segregate the fixed and the variable costs to be incurred.A well defined budget right from the beginning will help you achieve your targets with much ease.You can keep a track of how strictly you are following your budget.
Any major deviations from the set budget can be looked upon and corrected on timely basis.However,minor changes based on your business needs are natural and nothing to worry about that.
Government is also supporting the emerging entrepreneurs having innovative startups.So,try to avail the maximum benefits that are available to startups.The benefits will help to reduce your overall costs.
3. Keep track of your expenses : Keep a check on your expenses and reduce them wherever possible.Cost cutting at the initial stage will leave you with some extra money that can be utilised to grow your business.Avoid excessive use of credit cards since that leads to a huge burden of debts.Its not the right time to waste your money on lavish office setup,trendy furniture or expensive business tours.
Reduce your Infrastructure cost to minimum,just get the basics done as per your business needs. Just keep it simple and try to invest to get some return out of it rather than mere spending your money.
4. Cash flow management and review :The founders should be aware of the movement of funds especially cash flowing in and out of their business.This is one financial metric you should be able to manage effectively.
Also,in India as per Income tax rules ,you should not make payment in cash for an amount exceeding Rs.20000. Make payments using cheques or net banking from the business account.Avoid making business payments from your personal accounts since that might create confusions at a later stage.
5. Proper Time management :Finally,you should be disciplined and know how to effectively utilise your time.If you have a well thought out plan,an amazing concept just go for it rather than wasting your time thinking only.Its such a fast moving world,bring your thoughts into action before somebody else does it.Don’t waste your time on mere planning, go for its implementation and that too at the right time.
Time is the most valuable asset you have,so spend it wisely.
So,all the startup buddies,just stay focused,plan your strategy,implement it and you will definitely head towards accomplishing your goals.
“To succeed in your mission you must have single minded devotion to your goal” – as quoted by A.P.J.Abdul Kalam.
So,just go ahead …open the doors to your success!!!
Any additional tips you want to share from your startup experiences ? Any suggestions you want to give to the budding entrepreneurs ? Would like to hear your valuable feedback !
Also go through our popular blog posts : 10 Financial planning tips to follow in your 20s !