#5 Lucrative Financial Decisions For Today's Entrepreneurs
You're reading Entrepreneur India, an international franchise of Entrepreneur Media.
Finance pivots the formation of new businesses and helps entrepreneurs take advantage of the opportunities to grow. Planned application of financial tools is integral to the success of every business. Your business could be built on a long-term vision or a personal principle, but it will only function successfully if it is financially sound. To make a business venture financially viable, entrepreneurs must handle finance efficiently and stay away from debilitating expenses, in addition to having adequate capital in hand to take care of basic expenses.
In a conversation with the Entrepreneur India, Jaideep Raha, Managing Director, Jetex Oceanair, a freight forwarding and logistics management company, shared some valuable financial decisions for budding entrepreneurs.
Neglecting Accounts And Book Keepings Is A Common Error
“Have a good accountant who is honest and diligent. A careful auditing is required right from the Day One. This is specifically important for new businesses and start-up entrepreneurs, as they could concentrate on marketing and sales promotions and on setting up operation base to match up to the present fierce market competition and meet customers’ satisfaction and gain foot hold in the market. This leads to neglecting accounts and book keepings. This is one of the general mistakes most of the new entrepreneurs make. And over a period of time these goof ups snowball posing bigger problems for the company,” advised Raha.
Costs Control Mechanism Is Of Utmost Importance
“Take stock of your opening balance in bank and cash in hand and also the closing balance and cash in hand every day. Here, too, external and internal audit are very much necessary. Balance your funds on cost and business expansions.Minimal risk is advisable with finances.I have seen many start-up entrepreneurs lose out in the initial stage because they lose track of the day-to-day cash and payables and receivables,” he warned.
Knowledge In Taxation And Statutory Issues Saves A Lot Of Trouble
Raha has advocated giving utmost importance to taxation and statutory issues and going deep into the subject as this, according to him, is one area which witnesses drainage but always remains unnoticed till late. “Failing to handle taxation properly may lead to serious consequences. The Indian taxation system is very complicated. And until you have a good tax consultant or accountant in your team, who is proficient in taxation issues, it is very difficult to manage tax related matters. This leads to difficulties in business operations, heavy penalties and legal issues,” he notified.
Cash Handling By Trusted Employees Only
“Do cash handling yourself in the initial stage, or keep your eyes open on the process when done by others. There is a saying in Iran and in countries of the Middle East that, ‘You tie yourself to the camel firmly and then have faith and trust in God.’ I guess the very basic idea of any business operation is to play safe and be vigilant,” he opined.
Know Your Dealers
“Do the necessary homework and study records before making an advance payment or giving credit,” said Raha, adding, “Do not over trade at all. Credit controls are very important. Do not invest where you can’t invest time.There are conmen round the corner always, at the drop of the hat you might have to encounter them. My advice to budding and new entrepreneurs is that don’t get swayed by rosy pictures and big numbers by unknown players in the trade. Deal with only highly reputed organizations. This has two-way effects — your money is secured and your market reputation also increases.”
Jaideep Raha founded Jetex Oceanair in 1989 and has since then earned the distinction of giving a one-window gateway for customers in tea shipping and in air cargo and sea cargo consolidation. The company now aims to establish itself as a PAN India Company and IPO in the next seven years.