Nov 16 – Nov 22 this year is being celebrated as the Global Entrepreneurship week around the world. With Indian startup ecosystem growing at such a fast pace we’ve seen a surge in the number of aspiring entrepreneurs with great business ideas.
And with India being one of the hottest investment destinations, raising the money for turning their ideas into reality is no more a dream. So if you’re also a budding entrepreneur or planning to start up, take note of these four things that you need to put in place to keep your financial house in order:-
1. Calculate your monthly cash burn – Cash burn is the amount that you need every month to run your business. So if you don’t want to run out of money too soon, identify the things that you spend on every month without which you will not be able to run your business.
2. Set up proper accounting system – Once you’ve identified the amounts that you disburse every month to run your business, it’s important to account for the revenues too. From time to time this lets you know whether you company is doing well or not. As your business grows make sure you incorporate a proper accounting system which records revenue, costs, assets, liabilities, taxes etc.
3. Hire and Expand only as you grow – One of the greatest expenses for a company is its people. So find out ways through which you can keep your staffing costs low. When you hire you just don’t pay salaries but you incur other additional costs such big office space, equipment, supplies etc. So when you plan to hire or expand just ask yourself “Are you ready”?
4. Doing your finances on your own – When you start up you don’t have enough capital and hence you are the CEO, CFO and the COO of your business. But when you grow it’s always better to look at things that you are best at and for rest hire the experts. If you’ve reached a stage where you take a lot of financial decisions, it’s time to hire a CFO.
Now that you’ve THE IDEA, THE FUNDS and THE FINANCIAL BASICS that you need to remember, it’s time to go. What are you waiting for?