Category: Financial Planning


“Entrepreneurship is not a profession. It is a way of life.” The life of the entrepreneur is one of seeking and seizing opportunity. Entrepreneurs have historically been known as risk takers seeking to make their fortunes. Anyone can call himself an entrepreneur, or start his own business, but success requires knowledge, hard work, and determination and courage.

Starting your own business, being the boss and calling the shots is very attractive to anyone with an entrepreneurial urge.

It can also be one of the easiest ways to transition from full-time employment to running your own business provided you have solid skills and experience in your profession. The freelance market is booming as many businesses today (even very large ones) require a more flexible “just-in-time” workforce and prefer to employ contractors rather than full-time employees.

Personal evaluation:

Answering a few key questions will set the ground for the future, either employee or self – employed?

Analyze the business:

Once you have some idea of a business that fits your goals and lifestyle, the next step is to analyze your idea.

Who will be your customers?

Who will be your competition?

How much to begin investing?

How many / who to employ ?

Make it legal:

There are several ways to form a business:

Draw up a business plan:

If you will be seeking outside financing from friends, relatives, investors, or a bank, a business plan is a necessity. But even if you are going to self-finance the venture, drafting a business plan will help you figure out

It is like a pilot’s flight plan – a business plan helps you figure out how you are going to get from here to there.

Get funding:

Most small businesses begin with money from savings, credit cards, personal loans, help from family, friends, and do on. You should also check out Small Business Administration (SBA) guaranteed loans. These loans, administered by banks, offer great terms.

Set up shop:

Take advantage of modern apps and tools that help small business owners

As you cans see, starting a business today is easier than ever before -and a lot of businesses exist to help other small businesses. As an entrepreneur, you can take advantage of these to use as leverage to get more stuff done and focus on the things that matter most to you.PDFelement , Freshbooks, MailChimp,Candybar ,SurveyMonkey etc!

Salary for founders , opportunity costs,

The ideology is simple. Before you get funded you’re anyways your own time and money to build the start up. But once you’re funded, the founders and co-founders should take sufficient salary to comfortably bear their expenses. Coming  from the thinking perspective where I think that the core team should be able to take sufficient salary home to keep them happy. Have less employees, but effective ones. There’s no reason to go on a hiring spree like most startups do.

Allocation for your funds is very important and the major part of angel/seed fund should go for product development, salaries, server cost and in cases where required, marketing.

Pre-series A and for the subsequent series funding, the founders and core team should start taking salaries according to the market value in their field of startups.

Opportunity Costs

Let’s say you decide to quit your 5,00,000/year job and start a business. Starting the business will certainly have costs of its own, but it will also cost you the 500,000 you would have made had you stayed at your job.

Opportunity Cost is the value you’re giving up by making a Decision. We can’t do everything at once — we can’t be in more than one place at a time, or spend the same dollar on two different things simultaneously.

Whenever you invest time, energy, or resources, you’re implicitly choosing not to invest that time, energy, and resources in any other way. The value that would have been created by your next-best alternative is the opportunity cost of that decision.

Drafting a Business Plan

A good business plan should answer questions pertaining to each of the core business plan sections as follows:

The content in the business plan, your strategy and reasons why you’ll succeed, that will prompt others to invest or otherwise join you in your conquest to build a thriving business!

Finding the Funding !

There are some options for raising seed round in India,

Bootstrapping your startup business:

Self-funding, also known as bootstrapping, is an effective way of startup financing, specially when you are just starting your business. First-time entrepreneurs often have trouble getting funding without first showing some traction and a plan for potential success. You can invest from your own savings or can get your family and friends to contribute.

Crowdfunding As A Funding Option:

Crowdfunding is one of the newer ways of funding a startup that has been gaining lot of popularity lately. It’s like taking a loan, pre-order, contribution or investments from more than one person at the same time.

This is how crowdfunding works – An entrepreneur will put up a detailed description of his business on a crowdfunding platform. He will mention the goals of his business, plans for making a profit, how much funding he needs and for what reasons, etc. and then consumers can read about the business and give money if they like the idea. Those giving money will make online pledges with the promise of pre-buying the product or giving a donation. Anyone can contribute money toward helping a business that they really believe in.

Individual Influential Angels

There are over 250+ individual angel investors in India who are independent (not registered with Angel networks). Most of them rely on a lead investor and will typically follow than lead.

Angel Network Champions

There are 15 angel networks in India, but the 4 best ones are Indian Angel Network, Mumbai Angels, Hyderbad Angels and Harvard Angels. Innovation angels and Chennai angels are up coming but they have not done many deals yet.

Seed Stage Institutional Investors

There are 7 that of these that matter. Nexus VP, Blume Ventures, 5 ideas, Angel Prime, 500 startups, India Internet Fund and Seed fund.

Get Venture Capital For Your Business:

This is where you make the big bets. Venture capitals are professionally managed funds who invest in companies that have huge potential. They usually invest in a business against equity and exit when there is an IPO or an acquisition. VCs provide expertise, mentorship and acts as a litmus test of where the organisation is going, evaluating the business from the sustainability and scalability point of view.

A venture capital investment may be appropriate for small businesses that are beyond the startup phase and already generating revenues. Fast-growth companies like Flipkart, Uber, etc with an exit strategy already in place can gain up to tens of millions of dollars that can be used to invest, network and grow their company quickly.

Raise Money Through Bank Loans:

Normally, banks is the first place that entrepreneurs go when thinking about funding.

The bank provides two kinds of financing for businesses. One is working capital loan, and other is funding. Working Capital loan is the loan required to run one complete cycle of revenue generating operations, and the limit is usually decided by hypothecating stocks and debtors. Funding from bank would involve the usual process of sharing the business plan and the valuation details, along with the project report, based on which the loan is sanctioned.

Get Business Loans From Microfinance Providers or NBFCs

What do you do when you can’t qualify for a bank loan? There is still an option. Microfinance is basically access of financial services to those who would not have access to conventional banking services. It is increasingly becoming popular for those whose requirements are limited and credit ratings not favoured by bank.

Government backed ‘Pradhan Mantri Micro Units Development and Refinance Agency Limited (MUDRA)‘ starts with an initial corpus of Rs. 20,000 crore to extend benefits to around 10 lakhs SMEs. You are supposed to submit your business  plan and once approved, the loan gets sanctioned. You get a MUDRA Card, which is like a credit card, which you can use to purchase raw materials, other expenses etc. Shishu, Kishor and Tarun are three categories of loans available under the promising scheme. Learn more about MUDRA.

Dilzer Consultants Pvt Ltd

Sneha Ramamurthy