FINANCIAL TIPS FOR ENTREPRENEURS LAUNCHING A STARTUP :
WHY STARTUPS FAILS MOST COMMON REASON :
1 in every 5 Million non-funded startups reaches unicorn status worth at least $1 billion. And for every funded startup, 1 in 10.000 becomes a unicorn. Suppose we consider that only about 1% of startups which are looking to increase venture capital actually finished getting funded, and these counts are even difficult to read. Most Good funders and good entrepreneurs should be good in risk reduction, or they may just fall below 10 of the most common reasons. Why most startups fail worldwide. Below is the analysis of those most common risks.
There is no market demand for your product: We mostly see in the startup scene that a number of companies believe their innovation that the market will adjust or beg for it and money will start to flow in. There are many startup founders who do not fully understand what their product is able to achieve in the market, especially in the initial stages. This is the main reason for many kingpin when a company switches its course and product to satisfy other markets.
The market might not be ready for your product: Most companies launch products before time and additionally before market demands or technology is not there yet, Other companies launch too late even though they might not notice that it would already be too late. The key parameter here is always to ask questions yourself with competitors along with common sense When sales are not taking off. And this would be the best time to call a ‘stop-loss’ or invest time and capital/efforts in another market.
Inability to raise capital: People always get shocked by the time and number of rejections required before they succeed in raising capital for the startups, generally this process is started too late and entrepreneurs go to save their life from using a group of investors- The 1st ones. Fundraising for any startup is something which needs at least 6 months of prospecting, meeting, calls, and visits. The more you make a routine of fundraising routine the more precise you are about what you require from a company and what investors are looking for. After that, make a committee responsible for this and name two people who will be responsible for raising funds and report to the team every two weeks.
Ignoring and not avoiding cash burn: There are many founders of the startups who are technicians or engineers at heart - that means they don't want to develop a perfect product or solution to one problem and launch after that. This can become a huge problem when you must be cashing in the quickly as possible for your company to keep the doors open. In order to prevent cash flow problems, There are some important signals usually are low-profit margin, high payroll cost, Small recurrence purchase, High churn rates, Clients delaying payments. This would become a chance the more your startup's cash flow see their situations the closer you are extending the treasury and having the need for more cash because of huge distances between paying suppliers and getting paid by customers.
TOP FINANCIAL TIPS FOR ENTREPRENEURS LAUNCHING A STARTUP :
Starting a company is the easiest way, But if you are planning to set up and launch a startup you need to take care of these tips to avoid the most common financial mistakes. If you think these tasks look so demanding, then getting a consultant from a good financial advisor will be helpful as an entrepreneur.
Restricted your Fixed expenses at the initial: At the initial stage of a startup, to keep your spending or expenses low is the key to constancy, You don't need to rent or purchase a huge office in the middle of the city or utterly cater meals for three times a day. Operate in a minimum way so that you can allocate the majority of your capital to grow. This is the main perk or financial tip for launching a startup. There are too many startups focused on the wrong things eg, fancy and huge offices, with top amenities and forget that making revenue should be the top priority.
Cash flow management is the crucial factor: There are many startups who fail due to a variety of reasons, But this one is most out of others running out of money. You need to take care of where every single rupee or dollar is coming and going. If you don't stay on top of your cash flow ultimately you are going to put your business in a very dangerous condition. Your idea may be good, that does not matter when you run out of money you hit a stone wall. Build a budget and stick to it.
Keep track and observe all spending: Being as a startup there are going to be many expenses coming at you from the various direction, So to overcome this we recommend you to use accounting software to remain organized because to hire a full-time staffing coordinator to handle all your budget books, in the beginning, is not very budget-friendly, This will help to make it easier when tax time rolls around every year, It not only helps with cash flow management when you start growing that time accounting becomes more complex, So you need to consider or hire a professional.
Focus on customer acquisition: You have no business without customers, The earliest you resolve or figure out how to acquire customers and scale, this is the greater chance of your company making it, Once you start identifying different acquisition channels, then you should start working on optimization to lower your costs. Sometimes it becomes impossible to test every acquisition channel at the first, in terms of time required and cost, So focus on the best opportunities, Once you properly scale those, You will find the financial capability to explore other channels.
