Starting up a new business is always challenging and more often than not most of the entrepreneurs end up making the same mistakes. We are listing 10 most common mistakes which you can avoid in your startup and ensure more smooth operations:
1 . Bookkeeping – Many a times, entrepreneurs take book-keeping for granted. While it could be challenging to maintain detailed entries without having any accounting knowledge. However budding entrepreneurs shall make sure to at least document all purchase and sale entries. This can be achieved through easy to use online tools such as Fingage.
2 . Payments – Another mistake most of the entrepreneurs make is payment of expenses through the personal saving bank account. This is a very simple mistake to fall for, and it should be ensured that all business expenses are paid through a current bank account.
3 . Cash Receipts – While it is very convenient to collect receipts in cash, but many times business receipts collected in cash end up as a spent for personal expenses. With digital payments thriving in India and upcoming UPI2.0 wherein you can link your business current account with BHIM app and collect instant payments, entrepreneurs should establish practices to collect receipts digitally wherever possible.
4 . Business Insight Metrics – Making informed decisions is critical to every business, and real-time access to various business metrics can ensure informed business decisions which can make a huge difference in business continuity. Check out the dashboard view in Fingage, which provide a real-time information on sales, purchases and business cash flows.
5 . Professional Invoice – As a startup, we are constantly judged by our clients, users, investors, and vendors on the basis of interaction we made with them. You can make a potential impact and build trust by sharing professional invoices. One way of achieving it is by way of maintaining an excel template, alternatively, you can also generate a consistent and professional invoice from Fingage
6 . Follow-up – Another mistake which many entrepreneurs make is offering long credit period. This is often due to lack of content follow-up. Mostly these delayed collections are forced by the lack of access to follow up tools to the founder. In Fingage, you can send constant reminders to your client asking for settlement and can send a digital payment link to collect the payment realtime.
7 . Compliance – Nothing haunts entrepreneurs as much as business compliance do. GST Filings, Income Tax Filings, TDS returns and professional tax are a few to mention. While many entrepreneurs chose to ignore the applicability of these business compliances however these business compliances fetches dividend in terms of a strong credit score for the future. Professional fees paid for business compliance shall be considered as an investment in the business and not as an expense.
8 . Build for Users and Not Investor – Many entrepreneurs often get trapped into the bandwagon effect wherein a startup’s success is evaluated by its capacity to raise a seed round and subsequent Series. This is a myth and many entrepreneurs have busted it by being profitable without raising any fund mostly because of wise business decisions. As an entrepreneur, you shall always build your product for the end user and not investor. Even after raising a million dollars in funding, if your user is not happy or his problem is not resolved, you won’t be considered as successful.
9 . Debt Management – While this may not be applicable in many cases but its very critical. Often due to lack of access to bank loans and credits, entrepreneurs end up raising loans on high-interest rates from the unorganized sector. This at times can prove to be fatal for your startup. The focus should be to start slow and build a robust revenue stream and once some traction is achieved, apply for credit from banks or NBFCs. Businesses managing their cash flow on Fingage get access to easy credit from our partner NBFCs.
10 . Have Fun – You don’t have to sweat all the time in the delusion of starting up, having a good time with family and friends is equally important to detox from all the pressure and anxiety from starting up. Make better choices and enjoy while building a business of a lifetime.
All the best!!
This article has been published previously at Fingage Blog.
Shubham is a Chartered Accountant by education and currently building a platform for freelancers, online sellers and digital SMEs to manage their business cashflow, compliance and credit requirements. He also writes extensively on his blog portal FileMyGSTR on matters related to GST, Income Tax Filing, ROC Filings & Trademarks. He can be reached out at firstname.lastname@example.org