Issues all entrepreneurs must watch out for!
The fire of passion can take you this far. As an entrepreneur, you need much more than that. You need a cool head and those hardworking hands that will chart out and do the things that will make your dream come true. As Peter Drucker famously said, ‘execution eats strategy for breakfast’.
So what are the things that the cool head and busy hands of a start-up founder must do? AT TiE Pune’s Business Hygiene event, Mandar Mhatre, Charter Member and CEO, Apex Fund Services spoke at length on issues that a start-up founder cannot ignore while setting up shop.
Says Mandar, “most start-up founders are so busy with the product and its marketing that they often overlook some vital aspects of business like the various compliances. You have to be finicky about all ROC filings. Paying GST and other taxes. Once you cross ten employees, labour laws come into force. Issues like PF and insurance just cannot be ignored or delayed. If you miss out on PF then you can end up in jail. It’s possible that founders will have limited bandwidth to look into such matters so it may be a good idea to outsource these functions. Whatever you do, it’s important that you put in place systems that will look into these aspects.”
Finance of course is the lifeblood of any business. But as a founder, you must have your books in order. Are you accounting correctly and in a timely manner? Do you have a MIS in place? Are you managing your liquidity well? Are your receivables and payables in order? Why is this so critical? Let’s say you have for example Rs. 1 lakh in the bank and you have expenses of Rs. 3 lakhs. At the end of the month, you should still have that Rs. 1 lakh in your account. But the ground realities are often different. As a start-up founder, you need to have a tight grip on your payables and receivables. Yes, you may have limited control on your payables but your receivables? Do you have systems in place to manage this? You should be able to project your cash flows and take remedial action for any deviation. If not then your finance management is awry.
Updates: Once a start-up gets investor money in his business then reporting becomes a fiduciary responsibility. And this helps in more ways than one. Not only will your investor know how your business is faring with his money but will also bring in some discipline in you. It will help you monitor progress. And you will soon realise that as you start to share more and more, chances are you will get help from unusual quarters. Your investor may know someone who could help you with a tech glitch you are facing, or a sales connect. But strangely many people shy away from asking for help.
Culture: A company is made up of people. Be it a tech one, manufacturing anything. People make a company and for a start-up founder, it is very important that he communicates the ethos of his company clearly to his people. What is the reason you started this company, what you want to achieve, and how? What is your strategy? Have you defined it and planned how you will execute it? What are the steps? What are the abiding principles and so on? This will build a cohesive organisation with a culture that matches your vision.