5 financial tips for startups

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5 financial tips for start-ups

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Introduction:

Introduction In the past decade, the number of startups in India has increased owing to easier business entry hassles, simple legal constitution, and good funding support from VCs and Angel Funds. That said, like individuals, even startups need to perform their financial planning to survive . Following are 5 financial planning tips that will make sure that your startup survives

Make your business scalable to take it globally:

Make your business scalable to take it globally The way business is performed has undergone a major transition in the past 2-3 decades. Today, focus has changed from managingthe business from end-to-end to increasing focus on one or two key processes that could help build a competitive advantage. It is more often this competitive advantage that makes a business model scalable, which helps takes a business global. For instance ,

Make your business scalable to take it globally:

Make your business scalable to take it globally Mark Zuckerberg just focussed on creating a content management company with zero content of its own. With this focus in mind, he grew his startup – Facebook into the world’s largest content management company with zero content of its own, making this a competitive advantage. Therefore, making your business model scalable is the first step for survival.

Get a stronger hold on your cash flows:

Get a stronger hold on your cash flows Cash is a crucial element for business and even more important for startups . As a startup , you need to ensure highly frugal cashflow management and map your cash flow closely to your profitability. Thus, any cash flow that is not generating business profitability should be avoided since it can hamper your business prospects. Startups must appoint consultants and not full- timeworkers since this could save critical cost to company, helping them survive in the long run.

Explore startup funding from Alternative Investment Funds (AIFs):

Explore startup funding from Alternative Investment Funds (AIFs) AIFs have become an increasingly popular alternative funding source to the banks in the past decade. Today, Venture Capital Funds and Angel Funds increasingly invest their money in startups with bring business prospects. Thus, as a startup , you must explore AIFs as an alternative funding source to stay afloat in the business. Moreover, VC Funds and Angel Funds also act as business mentors that not only provide you with appropriate guidance, but also help you build your client network.

Work towards going public through IPO:

Work towards going public through IPO One of the best ways of generating funds for pan-India business expansion for startups is to offer a share in its company to the public through an initial public offering (IPO).IPO allows a company to invite people to invest in its business by providing with the ownership stake to their extent of shares subscribed in the business through the IPO.Thus , IPO allows a startup to list its company on popular stock exchanges such as the BSE Sensex and NSE, enabling them to trade its shares publicly in the open market post listing. This is one of the best ways of survival for a startup .

Get your startup SME or MSME status:

Get your startup SME or MSME status There are certain eligibility criteria that a startup needs to satisfy to be termed a Small and Medium Enterprise (SME) or a Micro, Small, and Medium Enterprise. Once you satisfy those criteria as a startup , you can benefit from SME listing, government funding help, and other benefits. This could be important for business survival.

Thank You:

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