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 • 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 • 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 • 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) • 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 • 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 • 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.
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