The Indian business scenario looks very inviting for more and more businesses and startups to open shops, with entrepreneurs who are determined, ambitious and excited to jumpstart on new ideas, innovations, and unique value propositions. The recent rounds of seed funding are acting as major incentives for small business owners to dream big.
The First Year Milestones When Intuit India commissioned a research on small businesses and asked around 350 small businesses in India about what would they consider to be their biggest accomplishments in the first year as a business owner, we got some interesting answers:
89% said they consider the acquisition of their first customer as their biggest accomplishment in the first year of running the business, 86% voted for the moment when their product / service went to the market, 76% voted for hiring their first employee, 76% thinks opening an office / physical business location as a milestone, And 57% voted for making a profit / that feeling of being on top of my business’s financial situation as the biggest accomplishments in the first year of business.
Life Cycle of a Small Business The first three years in business are critical to build a self-sustaining business. While most businesses are focused on their business idea in these years, as the business grows, it is imperative to look for better financial management tools and expert advice for financial management. “Interviews with small business owners made it fairly evident that they wished they had dedicated more time in setting up a financial management system.”
Source: Intuit Commissioned Financial Management Whitepaper While businesses start with a lot of enthusiasm for financial planning, the interest falters as they realize that they should have planned for goals, targets and financials before starting up. 33% of small business owners in India take more than three years to realize that business sustainability relies on efficient financial planning, suggests the white paper.
With around 85% of small businesses in India funded by personal savings, only 57% small-business owners feel confident of their financial state-of-affairs within the first year. 54% business-owners feet that the first year of operations was the most difficult, as they were not financially savvy and finance planning was almost absent; And, 79% of small business owners wished they had been better equipped to manage their company growth through a better understanding of their financials.
So, Start Early It is critical that small businesses establish their financial management processes in the first year itself, and refine the plans by their third year, to make the most of the market. Owners who start early, reap the benefits early as well. So what are you waiting for? Start your business financial management now! The white paper, commissioned by Intuit India, reveals essential data on financial management trends and practices amongst small business in India.
“Financial Management – An Essential Tool for a Healthy Business,” represents data collected via qualitative and quantitative interviews with 350 Indian small businesses. The small businesses researched have a full-time employee strength ranging from one to 99 and annual revenue falling of less than INR 60 crores. Watch out for more on this topic in our upcoming blog posts.