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Aug 10

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Unorganised Accounts Can Cost Your Business with Funding

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Unorganised Accounts Can Cost Your Business with Funding

Have your ever wondered after talking to any investor about the market – how they decide which companies to invest in, and you’ll find that they ask one question over and over: What’s the risk level? For startups trying to get their companies off the ground, mitigating risk is crucial.

All investments are inherently risky, but anyone who’s going to pump cash into your dream is looking for a safe bet. If you’re out there talking to investors, presenting a pitch deck, talking to banks, or even asking friends and family for support, know one thing: they’re going to go over your company’s history and accomplishments with a fine-toothed comb. They want to know that whatever they invest, the odds are high they’ll see a return.

Ten out of ten times there’s one factor that could stop a deal in its tracks—sloppy maintenance of accounts.

Organised Accounts indicate that you know how to run a business, and they provide basic facts about the health of your business that are irrefutable. Investors are going to want to see how you grew from the day you launched until you entered their boardroom, and they’ll look through your accounts as proof of that growth. If your accounts are a mess, they won’t get the answers they’re looking for and they likely won’t trust that you’ll know how to manage their investment.

If you feel like you’re almost ready to pitch investors, it’s critical to take a good hard look at your accounts. What can you do to check their validity? Where do you start? We’ve collected a few helpful tips to set you on the right path.

Don’t Delay

The longer you wait to organise your accounts, the more expensive and time-consuming it will be. If investors are on your horizon, the best thing you can do for your business is to start the clean-up process right away.

The process takes time and will require the help of a trained professional, who likely charges by the hour. Isn’t it better to invest in your business than in your accountant’s rate? Get ahead of that expense now, and you’ll thank yourself later.

Organised Accounts Have Power

It’s easy to misjudge cash on hand, especially if your company is subscription-based. For many companies, losses are hiding in plain sight, and prepayments and recurring contracts make it easy to misjudge projections. When you have accurate accounting numbers at your disposal, you can avoid these kinds of issues and make smarter decisions about how to run your business. Investors will want to make sure you have a clear understanding of how to analyze your own company’s finances. You may not need to know all the in’s and out’s of accounting, but you do need to know how to read financial reports and use them to impact your business.

Investors Love Transparency

Clean, concise, easy-to-read financials are a clear sign to investors that you’re not trying to hide anything from them. When investors come on board, they will want to maintain a strong relationship with you and to work together as partners. Sharing financial data with investors in a transparent way extends the invitation for partnership. It implies trust and willingness to let them into the process.

Organised Accounts Are the Law

Your shareholders are entitled by law to have access to organised and professionally maintained financial records and statements. It’s essential for companies of all sizes to be compliant with the Generally Accepted Accounting Principles (GAAP). GAAP-compliant books are one of the first things an early stage investor will look for.

Prepare for an Exit

One thing startups always have on the table is the possibility of an exit through acquisition. If you made it through a few funding rounds and potential buyers are sniffing around, unorganised accounts could cost you big time by sending those buyers running. Whatever your exit strategy is, organised accounts can help you on the road to that vision. Messy accounts, on the other hand, can only hurt you.

Conclusion

Don’t let your accounts decay into a patchwork spreadsheet of numbers and guesses. Work with an accountant or take advantage of some accounting software to get your accounts in order. When it comes time to pitch to investors, the only thing you’ll need to worry about is your pitch.

Aug 03

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The Starter Manager Guide – Startup Management

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The Starter Manager Guide - Startup Management

Owning A Startup

Owning a startup is not easy, nor is managing one. Like its larger cousins, you still need to manage a startup efficiently and effectively in order to survive over the long term. This can be extremely difficult for some. Many startup owners start their businesses because they’re experts in their trades, not because they’re experts at managing a business.

Despite the challenges, being a startup owner does come with many invaluable benefits and rewards.

1) Barriers to Entry

The barriers to entry can be relatively low with a startup. For example, you can start a business in your garage.

Many household brands that we know today started in a garage somewhere. Think of Disney, Hewlett-Packard, Apple, Microsoft, and Dell. Of course, this doesn’t mean that your next venture will make you a billionaire tech mogul.

However, starting a startup doesn’t require the expense of office space or large amounts of furniture and fixtures. This frees up valuable capital that you’ll need to get your business off the ground.

2) Passion, Hobbies, and Experiences

Passion can also inspire you to transform a hobby into a thriving business venture. A woman indulged her passion for hand-making designer leather handbags. She joined with a cousin and as a result, they now own a company that has a contract with a world-famous ladies handbag supplier.

A Latino-American who is also advertising on TV in a growing industry started producing wine at home and selling it door to door. He sold his home and started a wine business.

3) Entrepreneurship and Freelancers

More and more people are going into self-employment as starting point for establishing a startup venture. Often, this begins with someone doing work as a freelancer, which naturally grows into a larger business over time.

Entrepreneurial Benefits

This doesn’t suggest that starting or operating a startup is easy. However, it does indicate that owning a startup has some desirable benefits, such as:

It gives you some sense of success or gratification by successfully starting a small but income-producing business, while also providing encouragement.
Being able to do business where larger companies don’t can allow you to carve out a nice niche without the concern of having to compete directly with a large competitor.
Startup owners are often active in their local communities in a way that larger businesses can not be. This can also improve your reputation and community standing.
Having command over your time is a huge benefit for business owners. While you still have to make sure processes are in place to run the business, you don’t have to get approval to take time off and can work where and when you choose.
Being your own boss is invaluable. You can easily do what larger companies find difficult; move your business, add a new product line, or start an entirely new project.
Being free to hire who you want on your own terms can be a huge benefit as well. Being able to fire an underperforming employee without jumping through corporate hoops is also huge.
Due to the small cash requirements of a startup business enterprise, you can quickly borrow cash when you need emergency purchases. Large companies go through circuitous procedures to borrow money from lenders.
Operational expenses can be minimal in startup business enterprises, unlike in larger companies where much more infrastructure is required.

The Importance of Startup Management

Startup can derive benefits from the application of sound management practices. Like any organization, refining and managing the business operations starts with some fundamental principles. For example:

Communication Skills– Fundamentals of oral and verbal communication competencies as applied in business operations.
Organizational Behavior– Fundamentals of employer-employee relations and basic psychology as applied in business.
Finance Management– Fundamentals of money, banking, cash handling, and Monetary policies.
Economics– Fundamentals of resource mobilization, allocation, and utilization.
HR Management– Basic recruitment, training, and movement of personnel in a business organization
Business Communication– Principles and practices of letter writing, documentation and procedures.
Computer Application– Literacy in Basic business computer languages and protocols.
Basics of IT– Introduction to software, hardware handling, and Elementary programming.
Marketing Management-Basic studies in Standardization, grading, warehousing, and distribution of goods.
Business Law and Ethics– Study of Obligations, Contracts and pertinent forms and commercial laws.
Taxation– Study of Income and tax determination, tax schedules and guidelines.
Specialization Subject– You can specialize in any of the above core subjects.

The reality is, a large percentage of startup owners (and managers) learned from experience and self-education. College is not a requirement to pursue your passion.

Types of Business Structures

While the principles are generally the same, effective startup management techniques differ from larger businesses depending on the environment in which they are applied. To demonstrate, let’s take a quick look at the different types of legal structures for businesses:

Sole Proprietorship– It’s the most basic type of business entity. A single individual owns the business. Usually, the owner also runs the business.
Partnership – It’s similar to a sole proprietorship. However, in a partnership, two or more individuals own the business. The owners may perform responsibilities in running the business.
Limited Liability Company– The business is similar to a corporation. But the business isn’t as structured as a full corporation. The owners of the company are called members. They may or may not work in the corporation.
Private Limited Company – It’s a business entity that has a separate personality from its members. The owners or creators of the company are called directors or shareholders. They may or may not work in the company.

In a larger business that’s organized as a company, there may be more procedural hurdles to overcome in order to implement changes. This can be challenging, even for the owner, if you need to refine your processes to improve performance.

Generally speaking, in a startup these hurdles are less challenging. As a result, a startup owner can more easily make the changes necessary to address an operational concern.

Characteristics of Startup Management

Expanding and defining the traditional management functions:

Planning– It’s deciding what to do, when to do it, and how to do a particular activity. It connects the vacuum between the point where you are and where you want to be at a definite future time.
Organizing– According to Henry Fayol, ‘you organize a business by putting together all the factors that enable it to perform its functions; raw materials, tools, capital, and personnel’.
Staffing– Providing and maintaining personnel for the organization. In fact, it’s a part of the organizing function but Human Resources Management (Personnel Management) has become a specialized field in Business Administration. As a result, it’s now considered a distinct management function.
Directing– It deals with mobilizing, influencing, guiding, supervising and motivating team members for the achievement of tasks and organizational goals.
Controlling– Theo Haimann says, ‘Controlling is checking what progress is being made towards the objectives and appropriately acting to correct deviation’. Koontz & O’Donnell agree with Haiman by stating that “Controlling is measuring and correcting the activities of subordinates to make sure that the desired objectives are being accomplished”.

Benefits of Startup Management

By employing a set of sound management principles and entrepreneurial skills in startup operations, the startup owner can make it possible to:

Successfully achieve without delay his/her business objectives, even with limited resources.
Systematically organize all facets of his/her startup business enterprise to ensure that the right things will be put in the right places and all the required work will be done on time.
Create working groups and responsibilities that will be evenly distributed from person to person. The right people will be assigned the right functions. The right skills will be applied to the right jobs.
Improve employees’ lives as a result of increasing productivity, income and creating a friendly and comfortable work environment for all.
Reduce employee turnover, tardiness, and absenteeism, while improving work continuity and flows.
Produce the highest possible output with the resources of the startup. Giving appropriate training and incentives to less productive employees will also contribute to an increase in output.
Greatly reduce operating costs by eliminating unnecessary expenditures and hidden costs.
Introduce a proactive and flexible training program that will help build new skills and procedures in order to adapt to a changing business climate.
Implement flexible strategies and plans based on the organization’s current levels of strength, weaknesses, opportunities, and threats. This will help lead to the smooth and steady operations of all phases of the business. It will also assist in the development of contingency plans for imminent or possible future risks.
Provide motivation for the company owners and the workforce to work as a team, thus helping to achieve steady growth in income.

End Results

In short, the application of sound practices in startup management guarantees:

The alignment and coordination of the series of activities of the organization; and
Encourages startup owners to mix education, knowledge, and expertise to operate their businesses.

Sound Management Principles Can Help

Understanding and implementing sound management principles can help starup owners learn to:

Implement a unified vision.
Identify and attain the goals and objectives of the startup business.
Gain opportunities to test useful knowledge and skills in management like marketing, banking and finance, auditing and monitoring, and other critical management subjects.
Implement a pro-active, flexible, efficient and effective decision-making process that takes all important factors into consideration.
Design a flexible work schedule that also takes into consideration the time constraints of the workforce.

Important Traits for Effective Startup Management

Even the most knowledgable and experienced people need to have certain traits in order to succeed in business. These traits are the bridge that allows startup owners to apply their knowledge and experience. These include:

Vision– They clearly visualize and explain where they are, and what and where they would like to be in terms of mission, goals, objectives, strategies, and tactics.
Passion– They love their businesses because these fit into their individual personalities and circumstances. They enjoy finding ways to promote and improve the appearance and content of their businesses.
Hardworking– They are naturally inclined to put extra effort to gain more and move forward.
Decisive– They don’t procrastinate and let opportunities pass by. They make decisions and move forward with them with a minimum of wasted time.
Adventurous– They’re willing to take risks.

“The biggest risk is not taking any risk… In a world that’s changing really quickly, the only strategy that is guaranteed to fail is not taking risks.” – Mark Zuckerberg

Conclusion

Effective Startup management can make the difference between success and failure. Like any machine, a business has to be maintained in order to operate reliably. However, this requires knowledge and experience on the part of the owner.

Fortunately, this is not an insurmountable task and it doesn’t require an expensive degree. It simply requires effort. Educate yourself and solicit the help of experts where you need them. Apply what you learn from both your successes and failures. Yes, it takes time but with perseverance, you’ll get there.

Jul 23

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A Winning Guide to Write a Business Plan

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A Winning Guide to Write a Business Plan

In today’s competitive global market, most of the enthusiastic entrepreneurs tend to launch their business to get out in front of the customers as soon as possible to discover if there’s value to what they are creating. They do not have enough information to write a business plan.

Emphasizing on planning is the utmost important, and not the plan. The process of developing an annual plan should establish priorities for the coming year and become the basis for action. It’s important to eliminate things that aren’t profitable or are shrinking your margins.

In addition, most small businesses need a business plan to get a bank loan. Private investors and strategic partners often opt for a short video or PowerPoint presentation highlighting the main facts of the business.

Below guide will help all small businesses to understand the market, come up with plan, create and comply & nurture growth throughout the business lifecycle.

When you create a business plan for your business, try to keep a few things in mind.

Length of your plan
Reason for writing your plan
Be clear on your goals and objectives
Outline your financial needs
Highlight your marketing strategies
Target Audience for your plan
Try to keep it focused and to the point

1. Research before writing a plan

Research is probably one of the most important things to keep in mind when writing a business plan. Your research needs to not only be thorough but extremely accurate, too.

Take more time to research your plan than you do to write your plan. This should signify how important your research actually is.

Sections of your business plan will primarily be informed by your ideas and vision, but some of the most crucial information you’ll need to include relies on research from independent sources. This is where you can invest time in understanding who you’re selling to, whether there’s demand for your products, and who else is selling similar products or services. Your research will later reflect on your business plan. If it’s wrong or inaccurate, it won’t look good to your investors and/or stakeholders.

If your research is thorough and reliable, it will make a good impression on your stakeholders. This gives you credibility and shows how serious you are about your work.

2. Company Overview

This section of your business plan should answer two fundamental questions: Who are you, and what do you plan to do? Answering these questions provides an introduction to why you’re in business, why you’re different, what you have going for you, and why you’re a good investment bet.

Clarifying these details is still a useful exercise even if you’re the only person who’s going to see them. It’s an opportunity to put to paper some of the more intangible facets of your business, like your principles, ideals, and cultural philosophies.

This section will most probably be available on your website. Some of it can also be in your ‘About Us’ section, so your audience has easy access if they want to learn more about you. This will make it easier to attract potential stakeholders and customers.

They don’t have to contact you every time they want to learn something about you; your profile will do it for you.

3. The Executive Summary

A good executive summary is one of the most crucial sections of your plan—it’s also the last section you should write.

The executive summary’s purpose is to distill everything that follows and give time-crunched reviewers (e.g., potential investors) a high-level overview of your business that persuades them to read further. Again, it’s a summary, so highlight the key points you’ve uncovered while writing your plan. If you’re writing for your own planning purposes, you can skip the summary altogether—although you might want to give it a try anyways, just for practice.

An executive summary shouldn’t exceed one page. Admittedly, that space constraint can make squeezing in all of the salient information a bit stressful—but it’s not impossible.

4. Tell Them Why You’re Here

One of the most important parts of a business plan is definitely engaging with your audience. It’s important to engage with your audience in a way that makes them feel like they’re special and evokes emotion.

State the problem and describe your solution.

One of the ways you can make your intentions clear is by stating the problem and giving a solution. Let your audience know that you are invested and are willing to make a change.

This gives you an edge. Every successful product or service is a solution to a problem. If you don’t clearly communicate what your solution is, your target audience won’t have as much confidence in your plan.

5. Business Model

The business model describes how you do what you do. It will include all your marketing objectives and what you aim to achieve with your business. Make sure you have a strategic marketing plan in place which answers all the potential questions your stakeholders might have.

This model can include questions like:

Information about launching new products (if any)
New marketing and advertisement schemes for existing products
Expanding the business
Increasing sales
Raising prices and how will that affect sales
Whether your business has a marketing strategy
What you are doing to increase the quality of your product and delivery

Make sure your business model is extensive and covers all the topics and questions that your stakeholders might have. It is better to cover all bases even if those questions are rarely asked. Better safe than sorry.

Your marketing objectives and goals should be clearly mentioned in this business model so your investors and stakeholders are aware of where you’re planning to take your business.

6. Product or Services

Since your product or services is what you’re trying to sell, describe it in detail. Try making a separate section for your product or service overview. Mention all the essentials – what exactly your product is and how it is different than everything else in the market.

If it isn’t different, then why it is better than anything that consumers can already purchase elsewhere?

One of the ways you can easily describe your product is by using infographics. If you don’t already know, infographics are a great way to describe your product. They are essentially visual representations which include graphs, icons, and pictures. They can help make your product overview more interesting.

This is just one of the ways to keep your customers interested. Make sure that when you write a business plan, you use creative ways to market your product.

7. Detailed Market Analysis

Your marketing efforts are directly informed by your ideal customer. Your plan should outline your current decisions and your future strategy, with a focus on how your ideas are a fit for that ideal customer. If you’re planning to invest heavily in ads on Instagram, for example, it might make sense to include whether Instagram is a leading platform for your audience—if it’s not, it might be a sign to rethink your marketing plan.

Most marketing plans include information on four key subjects. How much detail you present on each will depend on both your business and your plan’s audience.

Price:How much do your products cost, and why have you made that decision?
Product:What are you selling, and how do you differentiate it in the market?
Promotion:How will you get your products in front of your ideal customer?
Place:Where will you sell your products?

Promotion may be the bulk of your plan, since you can more readily dive into tactical details, but the other three areas should be covered at least briefly—each is an important strategic lever in your marketing mix.

8. Know Who You Are Selling to

Your ideal customer, also known as your target market, is the foundation of your marketing plan, if not your business plan as a whole. You’ll want to keep this person in mind as you make strategic decisions, which is why an overview of who they are is important to understand and include in your plan.

To give a holistic overview of your ideal customer, describe a number of general and specific demographic characteristics. Customer segmentation often includes:

Where they live
Their age range
Their level of education
Some common behavior patterns
How they spend their free time
Where they work
What technology they use
How much they earn
Where they’re commonly employed
Their values, beliefs, or opinions

This information will vary based on what you’re selling, but you should be specific enough that it’s unquestionably clear who you’re trying to reach—and more importantly, why you’ve made the choices you have based on who your customers are and what they value.

9. Competitors Analysis

Every company has some other company that they are competing with – either directly or indirectly.

Don’t make the mistake of assuming that you aren’t competing with anyone.

You are, and you need to be careful about this.

Make sure you are up to date with what your competitors are putting out in the market and how they are advertising it. Not only will this make you look professional and show potential investors that you’ve done your research, but it will also help you in the long run.

10. Clear Financial Plan

Your financial plan should include:

Cash flow statements
Income statements
Balance sheets
Accounts payable statements
Accounts receivable payments
Projected income statements
Budget
Cash flow forecasts

11. Team Efforts

A business cannot be run by just one person. It’s a team effort, and you need to recognize that. Mention what you do and what exactly every member on your team does. Recognize their hard work as this will only encourage them to work harder.

12. Don’t Miss Anything

You might think that after doing so much research, that this won’t happen to you, but there is a huge chance that it just might. Your business plan should include as many details as possible. Besides your marketing objectives and strategies, your business plan should extensively mention your possible cash flow options, your expenses and how you are planning to make money.

13. Simple, Adaptable & To The Point

One of the most important things that your business plan should be is adaptable. You are not aware of where or what your stakeholders are going to be like. Make sure not to use excessive jargon that might further confuse the reader.

Your stakeholders might be bankers or venture capitalists. In this case, not only should your plan be something that they can understand, but you also have to make sure that you add something interesting for all of them. Your plan needs to cover all bases so it can be adaptable for all kinds of audiences.

14. Highlight Your Passion

Anyone who starts a business has a purpose. Now it’s finally time to let other people know about this purpose. You’re passionate about your work, and you put all this hard work into it. Make sure to let your investors and stakeholders know that.

It’s important to explain why you care, why you chose this exact business, why you want to work on this and how you will help in making it better.

Define your purpose. Why do you do what you do?

All the technical jargon is really important, but so is your passion. Your stakeholders need to know why you care and how it’s going to translate into your work. Let them know why you want to do this and what you’re setting out to learn and accomplish.

If you have previous experience in a similar line of work, you can talk about what you have learned and what your mistakes have taught you. You should also mention how you are going to work on your mistakes this time around.

This is a great way to form an emotional bond with your stakeholders and even your customers. Along with this bond, your passion can also make you stand out amongst all your competitors since it will show the customer that you care.

When you write a business plan, remember that it will be your road-map.

Conclusion

Don’t over-complicate it. Your plan should include all aspects of your business but needs to be concise as well. While you may use it to court investors and bankers, it’s most important use is to you.

Jul 15

0

Industries likely to boom post COVID 19 Pandemic

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Industries likely to boom post COVID 19 Pandemic

Currently, the entire world is hit by a COVID-19 pandemic, nationwide lockdowns and social distancing which are hampering many businesses. Companies are experiencing huge impacts no matter how established they are. This is prompting them to re-look at how they manage and operate their business including re-visitation of their working business plan. The entire world is halted and everyone is talking about the economic slowdown and financials setback. However, some industries, such as those focusing on home entertainment or dealing in essentials such as groceries, have actually seen profits increase, and are likely to continue to do so post-pandemic. Meanwhile, other industries that may be struggling now will see a boom once the COVID-19 crisis is over.

Expected industries are likely to boom or continue to boom in aftermath of the pandemic:

Cybersecurity:

The COVID-19 pandemic has forced organisations and individuals to embrace new practices such as social distancing and remote working. Governments are reconsidering ways to ensure that their countries are stable by developing and enforcing new economic plans. Nevertheless, while the world is focused on the health and economic threats posed by COVID-19, cyber criminals around the world undoubtedly are capitalizing on this crisis.

From our Cyber Intelligence Centre, we have observed a spike in phishing attacks, Malspams and ransomware attacks as attackers are using COVID-19 as bait to impersonate brands thereby misleading employees and customers. This will likely result in more infected personal computers and phones. Not only are businesses being targeted, end-users who download COVID-19 related applications are also being tricked into downloading ransomware disguised as legitimate applications. Cybersecurity is an area that businesses may now be re-evaluating the importance of and pumping money into so they ensure that all their online users are safe.

Virtual Meeting:

The global virtual meeting industry is expected to gain traction during the coronavirus outbreak. As the enterprises and government organizations are considering video conferencing as an ultimate solution to connect with remote workers, customers, and employees; and, at the same time, it prevents direct contact with the people. Key companies getting affected in the market include 8×8, Inc., Cisco Systems, Inc., Google LLC, Lifesize, Inc., LogMeIn, Inc., Microsoft Corp., RingCentral, Inc., StarLeaf Ltd., Zoho Corp. Pvt. Ltd., Zoom VideoCommunications, Inc., and so other. These companies are envisaging the pandemic situation as a key to increase their growth and at the same time helping the nation during the crisis.

Now that most companies have had to adapt to allow employees to work from home, it’s likely that there’ll be more flexibility for remote working in the future. Having honed their home working space and enjoyed the lack of a commute, many workers may opt to work from home more frequently and platforms provided by Microsoft, Google, and Zoom are likely to still be in high demand to keep colleagues connected even when everybody is allowed back in the office.

Movie Streaming Services:

The success of Netflix has always been hard to predict, and its stock prices were fluctuating before the coronavirus outbreak. An open letter to investors suggested that while the number of subscribers had “temporarily accelerated”, the latter half of 2020 is likely to see a decrease in new members as “the person who didn’t join Netflix during the entire confinement is not likely to join soon after the confinement”. Both Netflix and Disney+ will continue to offer a unique service after the pandemic however, and having a larger audience that has become accustomed to unlimited access to international films, addictive original series. and childhood classics is likely to keep those subscriptions consistent, and maybe even increase post-pandemic.

Pharmaceutical industry:

Billions of dollars are being pumped into the pharmaceuticals industry as companies race to find a vaccine against COVID-19. Companies that are ahead of the rest when it comes to scientific breakthroughs are predominantly those with prior research that can be put to use, such as information about other coronavirus strains such as Middle East Respiratory Syndrome (MERS) and Severe Acute Respiratory Syndrome (SARS).

The importance of continuing infectious disease prevention and treatment research even once a coronavirus vaccine has been found is huge, so that the world can be prepared for any future pandemics. Stocks in biotech companies, many of which are now battling this novel coronavirus, have shot up, and this global crisis has exemplified how crucial the pharmaceuticals industry is.

E-learning Resources:

Many parents have had to become teachers overnight as schools across the world have shut, and online learning resources have boomed in response. The restrictions put in place as a result of the coronavirus have forced the education system to move online, and now that initial step has been taken it is possible that the traditional classroom will be altered post-pandemic and e-learning will continue to take precedence even once schools reopen.

The internet is also awash with virtual workshop platforms such as Masterclass, and they’ve seized the opportunity to entertain and educate people who are wondering how to kill time. Cookery lessons with top chefs including Gordon Ramsay, writing classes from best-selling authors such as Dan Brown and drama classes from the likes of Natalie Portman are among the courses that users can pay for. As many people take those skills into the real world post-lockdown, the platform’s success has a high chance of growing.

Online fitness industry:

Many fitness fanatics will be desperate to get back to the gym after months of squeezing a workout into their living room, but the finance-conscious and those who appreciate the privacy and flexibility of exercising at home may be keen to stick to their new exercise schedules. The science behind habit formation suggests that exercising regularly over a prolonged period of time – on average between one to two months –will build it into a habit, and so by the end of lockdown home fitness fans are likely to keep up their pandemic workout plans. Potentially good news for the online fitness industry.

Gaming industry:

Once geared towards affluent consumers in developed markets, the video games industry has grown rapidly in emerging economies in recent years, thanks to three principal factors: the proliferation of smart phones; the greater availability of high-speed internet; and, more broadly, the maturation of the industry at a global level.

Parallel to this, games are increasingly being produced within emerging markets as costs decrease, development software becomes more accessible and local talent is nurtured.

One high-potential segment in the global industry is eSports, dedicated to competitive video game playing. It is anticipated that global eSports revenues will be in excess of $1bn this year, with China being the leading market.

Cloud gaming is another online technology that is set to boost the market, enabling users to stream high-end games on handheld devices.

Home delivery industry:

Grocery delivery slots quickly became like gold dust when vulnerable people were advised to stay at home. It has also bolstered business for supermarkets such as Walmart in the US, as well as the UK’s online-only supermarket delivery service Ocado. After reporting a £45 million ($56m) deficit last year, Ocado experienced such high demand that it had to turn away orders in March when its website became overrun with customers. Even now lockdowns are easing, it’s expected that the industry will grow. Online shopping is set to make up 6.4% of the global grocery sales by the end of 2021, which is higher than the pre-coronavirus prediction of 4.6% of sales.

Many restaurants and cafés scrambled to facilitate takeaway orders so that they could continue operating after closing their doors, and some delivery businesses such as Uber Eats waived delivery fees for independent eateries to help keep them afloat during the pandemic.

Perhaps unsurprisingly home delivery services such as Amazon benefited from the pandemic. As most people were stuck at home, online orders were the only way to shop for non-essential items, and shares of the global marketplace have gone through the roof.

Legal services:

As a result, those working in family law have been inundated with cases, and it’s likely that the Western world will see a similar pattern once lockdown life is behind us. Divorce rates normally see an increase after the summer and Christmas holidays, and as coronavirus is likely to out-span both of those periods, the number of couples separating as a result will likely also be greater. There will also be the small matter of the paperwork and legal precautions that need to be put in place for the huge number of new drugs that are in development as a result of the coronavirus.

Cleanliness products:

Shelves were cleared of antibacterial hand gels and soaps as soon as it became apparent that an infectious disease was spreading, and months into the crisis those living in affected countries have become a fait with the art of thorough handwashing. Good hygiene practices have become such an intrinsic part of our day-to-day routine that resorting back to a state where we wash our hands less seems almost unfathomable. With additional hand sanitising stations having been installed in many public places and within businesses, it is safe to say that companies distributing cleaning products are unlikely to go out of business anytime soon.

Personal Protective Equipment:

Personal protective equipment (PPE) has been one of the most talked-about resources of this pandemic. Demand has been off the charts, and nations that rely on imports from other countries such as China have noticeably fallen short when it comes to supplying their own workers.

In light of the devastating damage caused by the virus, there will be a call for hospitals to have stockpiles in place ready to go should similar crises break out in the future. All PPE has expiry dates, and so constant supplies of fresh equipment will be needed to keep reserves at levels that they need to be, meaning that manufacturers will be kept in business to meet the new demand.

Electric Scooters:

Before the pandemic electric scooters were seeing an increase in usage, even overtaking docked bikes in popularity in the US in late 2019. But coronavirus could be the making of the electric scooter industry. Despite controversies over safety in the past, more and more cities are giving electric scooter companies such as Uber’s Bird and Lime the green light. And now that the pandemic has led many cities to impose social distancing measures that restrict cars in many of the world’s urban areas, the perfect storm for scooter rental companies has been created.

Rome authorised electric scooters on 1 March, just as the pandemic was taking hold, but now that the country has come out of lockdown the city is awash with scooters, as Romans avoid public transport and make the most of clearer streets. The Italian authorities also see the scooters as a viable greener alternative to cars and mopeds in the future and on 3 June Rome’s mayor held a press conference with scooter provider Bird to promote their benefits. Other cities are also expecting a boom: the UK has authorised the use of e-scooters from 4 July, the same day that the country’s pubs and bars are allowed to open again, and as London has now created car-free zones – the biggest in Europe in fact – electric scooters are predicted to be popular post-lockdown.

Remote Medical Services:

Both emergency rooms in the US and A&E departments in the UK saw a massive slump in numbers of patients coming in to seek emergency medical attention, with a drop of up to 80% fewer cases in northern England. It is understandable that people want to avoid visits to hospitals and doctors at the moment, and while medical staff are urging the sick to seek help as they normally would, it is likely that many are instead relying on remote medical services for advice.

Jul 08

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The Startup India Trilogy | DPIIT Recognition | 80-IAC | Angel Tax |

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The Startup India Trilogy | DPIIT Recognition | 80-IAC | Angel Tax |

A startup is a company or project initiated by an entrepreneur to seek, effectively develop, and validate a scalable business model.

While entrepreneurship refers to all new businesses, including self-employment and businesses that never intend to become registered, Startup refer to the new businesses that intend to grow large beyond the solo founder. Startup faces high uncertainty and has high rates of failure, but a minority of them do go on to be successful and influential.

Startup Recognition with Department for Promotion of Industry and Internal Trade (DPIIT)

Eligibility Criteria:

The Startup should be incorporated as a private limited company or registered as a partnership firm or a limited liability partnership.
Turnover should not exceed more than INR 100 Crores in any of the previous financial years since its incorporation.
An entity shall be considered as a startup up to 10 years from the date of its incorporation.
The Startup should be working towards innovation/ improvement of existing products, services and processes and should have the potential to generate employment/ create wealth.
Entity should not have been formed by splitting up or reconstructing an already existing business

Benefits:

Exemption from levy of angel tax under section 56(2)(viib)
Deductions under section 80-IAC
Liberalized regime of section 79 to carry forward and set-off the losses
Exemption under section 54GB to the shareholder for making investment in a startup
Access to the dedicated cell created by the CBDT

Application Process:

One needs to register on www.startupindia.gov.in using basic details such as email id and mobile number and create an account. Once the account is created, application for startup can be initiated. Below are the following details required for documentation:

Certificate of incorporation or registration as the case maybe and email id of the entity
Copy of PAN card of the entity.
Name, Mobile Number and Email id of Authorised Signatory.
Details of any awards/recognition received by the entity and the proof of the same.
Following questions needs to be answered for form:

Brief note supporting innovative features of products/services.
What is the problem the startup is solving?
How does your startup propose to solve the problem?
What is the uniqueness of the solution?
How does the startup generate revenue?
Current No. of Employees (including founders)?
Is the startup creating a scalable business model for high potential of employment generation or wealth generation?

If any of the following recommendation letters are available, it would help in getting the registration easily.

Any patent filed and published in patent journals available online or offline;
Recommendation letter from Incubators which are established in post-graduation colleges in India;
Support letter from any one of the Startups which is funded through Central or State Government authorities or any incubator which is duly recognized by the Government of India.
Letter of funding in an equity which should not be less than 20% by angel or incubation fund;
Letter of recommendation (regarding innovative nature of business), from an Incubator, recognized by the Government of India in DIPP specified format.
Letter of funding by Government of India or any State Government as part of any specified scheme to promote innovation

Note: Documents needs to upload in a PDF format only

Income Tax Exemption under Section 80-IAC

The recognised Startup can avail 100% tax holiday for 3 consecutive financial years out of its first ten years since incorporation.

Eligibility Criteria:

The entity should be a recognized Startup under DPIIT
Only Private limited or a Limited Liability Partnership (LLP) is eligible for Tax exemption under Section 80IAC
The Startup should have been incorporated after 1st April, 2016
Annual business turnover does not exceed Rs. 100 Cr. in the previous year relevant to the AY for which deduction is claimed.
Should be original entity and not through restructuring
Not formed by the transfer to a new business of machinery or plant previously used

Application Process:

One needs to fill all the requisite details along with the documentation as required inn https://www.startupindia.gov.in/content/sih/en/form80iac.html:

Memorandum of association (for Pvt Ltd) or LLP Deed (for LLP)
Board Resolution (if any)
Annual Accounts & Income Tax returns of the startup for the last three financial years.

Toolkit for Financial Statements- Updated financial statements (Balance Sheet, Profit & Loss statement, Income Tax Returns) for the past three years or from the year of incorporation

Note –

The Balance Sheet and the Profit and Loss Statement must be CA Certified
If your startup was incorporated on 1st April 2018 or later, Income Tax Returns (ITR) is not mandatory. For startups incorporated earlier, ITR is mandatory

Startup Video Link. The video should be of a maximum of 2 minutes and should cover the following aspects:

Brief about what your startup does or is planning to do.
Showcase the working of the prototype/proof-of-concept developed by you.
Market traction that your product/service has generated till now, if your product/service has already been launched in the market.
Note: Please upload the Video on a third-party video hosting platform such as Youtube. In case you are uploading on Google Drive please make sure that it is NOT access restricted.

Pitch deck. Maximum 5 slides and should be in PPT or PDF format only. Your pitch deck must have the following:

Information about the product/service offering of your startup
Brief about how is your startup innovative and/or scalable
Number of people employed by your startup and funding raised, if any
Credentials of Founders/Management
Screenshots/images of your product/website and website link, if any

Angel Tax - Income Tax Exemption under Section 56(2)(viib)

The recognised Startup can avail tax holiday for 3 consecutive financial years out of its first ten years since incorporation.

Eligibility Criteria:

The entity should be a recognized Startup under DPIIT
Aggregate amount of paid up share capital and share premium of the startup after the proposed issue of shares does not exceed Rs. 25 crores
The investor/ proposed investor, who proposed to subscribe to the issue of shares of the startup has:

Average returned income of Rs. 25 Lakhs or more for the preceding 3 financial years; or
Net worth of Rs. 2 crores or more as on the last date of the preceding financial year
Investments by listed companies with a net worth of Rs 100 crore or turnover of Rs 250 crore into an eligible startup, beyond the Rs 25 crore limit
(Exclusion of Non-resident & Venture Capital Company or Venture Capital Fund)

It does not invest in any of the following assets for a period of 7 years from the end of the latest financial year in which the shares are issued at premium:

Land or building, being a residential house, other than that used for the purposes of renting or held as stock-in-trade in the ordinary course of business
Land or building, not being a residential house, other than that occupied by start-up for its business or renting purposes or held as stock-in-trade in the ordinary course of business
Loans and advances, if start-up is not engaged in ordinary business of lending of money
Capital contributions to any other entity
Shares and securities
Motor vehicle, aircraft, yacht or any other mode of transport, if the cost of such an asset exceeds Rs. 10 lakhs other than that held by the Start-up for the purpose of plying, hiring, leasing or as stock-in-trade in ordinary course of business
Jewellery held otherwise than as stock-in-trade
Archaeological collections, drawings, paintings, sculptures, any work of art or bullion

Startup has obtained a report from a merchant banker specifying the fair market value of shares in accordance with Rule 11UA of the Income-tax Rules, 1962.

Application Process:

Fill basic details in the form on https://www.startupindia.gov.in/content/sih/en/Form-56.html along with declaration as required by DPIIT. (Format available in the link)

Jun 29

0

Top 5 Reasons “Why Startups Fail”

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Top 5 Reasons “Why Startups Fail”

Startup founders dream of becoming the next Airbnb or Uber, but the harsh reality is that most startups don’t end with a success story. The silver lining is that failed startups serve as cautionary tales for entrepreneurs. Much can be learned from why others didn’t succeed.

One issue didn’t emerge as the primary cause of startup failure, but rather most startups pointed to a combination of reasons. This is likely due to certain issues being symptoms of another issue. If your business model isn’t sustainable or profitable, you’ll blow through cash quickly. Without money, you can’t grow. If you don’t show signs of growth, it becomes difficult to get funding … and so on.

That being said, the following issues were the most common among the failed startups we analysed:

#1 Good idea, bad business

“Ideas are easy. Implementation is hard.”
Guy Kawasaki, Alltop co-founder and entrepreneur

More than a quarter of startups pointed to a weak business model as a reason they failed. As Vitoto founder Vinay Patankar wrote, a good idea but bad business was a primary reason for his startup’s shutdown. No matter how brilliant the idea, if you can’t make it profitable or scalable, you won’t have a successful business.

Don’t be too optimistic about acquiring your first customers; thoroughly think out the business model instead. A business model should account for all costs, the required technology stack and team, the marketing strategy, and different methods of monetization. The essence of a business model is to allow entrepreneurs to better understand how they’ll run their business and operations and how to attract and win customers.

The lesson we can learn: It doesn’t matter how good the idea is; if it can’t be profitable or scalable in the future, the startup eventually will fail.

#2 Lack of market interest

“What do you need to start a business? Three simple things: know your product better than anyone, know your customer, and have a burning desire to succeed.”
Dave Thomas, founder of Wendy’s

Startups fail when they do not solve an existing market problem. Most companies believe that their invention is quite appealing and there will be a huge demand for their products and solutions. If the product fails to create demand due to low market demand, then the company will face a downfall

Poor market research leads to misunderstanding of the target audience and, as a result, a product that no one wants.

There are some common causes of poor product-market fit:

Not enough demonstrated value to make people actually use or buy the product
Wrong time to release the product – A startup can be ahead of its market by a few years and customers may just not be ready for a particular solution at the moment.
The product doesn’t solve a problem for enough people

To avoid challenges with market fit, startups should validate their products using pilot projects before launching. Or alternatively, they can conduct beta testing to significantly reduce the risk of failure and market rejection. One more solution is to build a minimum viable product (MVP) that allows entrepreneurs first to build the core features of a product, test it, and then develop the next version according to user feedback.

The lesson we can learn: To make a startup prosper, provide a new solution that will be valuable for people.

#3 Premature scaling

“Premature scaling is putting the cart before the proverbial horse. The more a company grows, the further away from profitability it becomes.”
Michael A. Jackson

The goal of many startups is to not be a startup anymore. They’re all in a hurry to scale. Scaling refers to hiring people, getting funded, releasing new products, entering new markets – and growing too much too soon. Unfortunately, not everything is as smooth as it may seem. In reality, up to 70 percent of startups scale too early and, as a result, do things out of order.

As they say, slow and steady wins the race. So do everything step by step:

Get to know your target audience
Thoroughly consider what issues the product will solve
Deliver an MVP to market and get feedback
Add features, fix issues, and release the product again
Promote the product so people know it exists
Optimize the conversion funnel and find ways to retain more customers
Scale when the cost to acquire a user is lower than their lifetime value

Here are a few indicators that a business is ready to scale:

There’s a clear understanding of the lifetime value of customers and the cost to acquire a new user
The business model is repeating, meaning the company is acquiring customers in a similar way
Entrepreneurs work more on the business than in the business

The lesson we can learn: Don’t get ahead of yourself. Don’t try to grab a new market when the business isn’t ready.

#4 Challenges with the development team

The secret to successful hiring is this: look for the people who want to change the world.
Marc Benioff, CEO of Salesforce

An incredibly common problem that causes startups to fail is a weak management team. Weak management teams make mistakes in multiple areas:

They are often weak on strategy, building a product that no-one wants to buy as they failed to do enough work to validate the ideas before and during development. This can carry through to poorly thought through go-to-market strategies.
They are usually poor at execution, which leads to issues with the product not getting built correctly or on time, and the go-to market execution will be poorly implemented.
They will build weak teams below them. There is the well proven saying: A players hire A players, and B players only get to hire C players (because B players don’t want to work for other B players). So the rest of the company will end up as weak, and poor execution will be rampant.

Lack of technical expertise
Usually, startup founders are unwilling to invest much money on product development in the initial phase. Accordingly, they look for cheap solutions and don’t hire enough technical experts. As a result, developers lacking proper qualifications build a low-quality product that no one will use.

Ineffective management
One thing startups definitely can’t afford is poor management. Poor management can mean a development team doesn’t know exactly what the company needs and isn’t 100 percent involved in the process. Delays are frequent. Due to lack of clarity, product quality deteriorates and the product development takes longer than required.

Lack of people
Needless to say, all founders are eager to hire the best specialists. Hiring locally is easy and convenient, but unfortunately, the local talent pool is usually limited. Startup founders should be ready for the fact that not all specialists want to relocate for a job.

Poor communication
The Holmes Report shows that due to poor communication, companies lose $37 billion annually. Poor communication isn’t just about language issues; it’s about the development team not setting up a clear communication flow, ignoring meetings, and not having so-called “constant fusion.” Founders just can’t work closely with the team during the whole development process and are in the dark. This leads to the development team lacking a vision for the product and simply not getting the idea.

Below, you can see some steps to prevent issues with your development team.

#5 Poor monetization

“It’s almost always harder to raise capital than you thought it would be, and it always takes longer. So plan for that.”
Richard Harroch, venture capitalist and author

Cashflow keeps the business alive, no matter how passionate you are, how many users you have or how great your idea is, you still need to pay dues to your employees, marketing agencies and clear your bills.

Some entrepreneurs fail to keep a record of accounts and hence fail to take adequate measures on time.

In businesses which are funded by private equity firms and other external investors, the founders should be extremely aware of KPIs they need to show for next investment, their burn rate. Failing to achieve KPIs, and performing non-thought through expenses with low ROI can push the business down the drain.

The lesson we can learn: A brilliant product idea isn’t enough. For a business to flourish, it’s vital to keep your eyes on monetization strategies.

Now that we’ve reviewed common reasons why startups fail, let’s summarize how to avoid these mistakes or overcome them.

Jun 23

1

Outsourcing Services in COVID Pandemic – Accounting, Payroll & Marketing Insights

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Outsourcing Services in COVID Pandemic – Accounting, Payroll & Marketing Insights

The COVID pandemic has toppled our worlds not just personally but professionally as well. Most of the companies are currently functioning as remote working virtually to steer their revenue during this financial crisis due to the pandemic. This situation has led to many companies getting swamped with work that is difficult to manage in the current scenario.

As leaders of your Companies, you surely realize the heavy and varied workload you and your team is trying to overcome, ranging from year-end accounting, bookkeeping, financial reporting, taxes, and more. While you adjust to the new normal of working from your house and supervising your teams remotely, it is becoming clear that functions such as accounting and bookkeeping, payroll, AR and AP, taxes, compliances, marketing etc., basically all those activities which are resource-intensive are striving and warrant a lot of your time, energies and money being invested therein trying to manage your staff effectively and yet things not delivering to satisfaction. Non-availability of your junior staff due to personal reasons arising out of Covid-19 situation too is a prick in the path to successful growth.

Hence the golden question – why not share your workload during this raging era?

As an expert Service provider, we have the experience and proficiency to offer in-depth insights that will help you productively outsource your accounting and book-keeping, payroll, marketing and a lot of other functions that you serve within a routine period. This article will serve as an escort to assist you during this hour of disaster so that you can leverage the efficiency and skill from us and make time to sustain your business growth.

1. Does the size of a company have bearing on the decision to outsource?

Cost reduction and process efficiency are the primary advantages of Outsourcing. Both of these benefits will be important as a part of your business contingency plans during such times, no matter how large or small your company is. Notwithstanding your company’s size, you can opt for outsourcing. If you know there are certain activities that you cannot manage effectively, which is resulting in delays and inaccuracies, outsourcing them makes sense for all kinds of companies, regardless of size.

2. Activities to outsource?

It depends on your company and its current efficacy levels in an onshore setting. You can either outsource the entire gamut of functions or certain specific tasks. If you think you are finding it difficult to manage your simple but voluminous tasks like marketing, payroll, banking, invoicing, bill booking, and tax return filing on time and precisely, you can outsource this task to us. Our last suggestion is – identify what to outsource keeping in mind the resource-intensive and challenging nature of the tasks.

3. The Engagement options

Your plan towards outsourcing will require a choice of the method through which you want to engage the services of the provider. More often than not, you will be presented with these three most popular options.

Models of Outsourcing?

Variable model: Here, you only pay for the number of hours the service provider has worked on your tasks. The provider assigns a staff member who is your single point of contact and who liaises with the accountants assigned to your tasks. This model is best suited if your plan is to not sign up for a long-term commitment or when you simply want to run pilot projects to test the offshore waters.

Fixed model: Also known as the full-time employee (FTE) model, this is the model everyone thinks of whether they want to work with service providers on full time basis. Here, you are assigned a dedicated team or an individual who only works on your projects. Regular reporting helps you stay on top of your projects and become more actively involved in project delivery. If your company has large volumes of work on a consistent basis, this is the best engagement model.

The Mix Model: At times, it may so happen that you cannot clearly define the volume of your work, whether the same would increase beyond the committed volumes. In such situation, the Mix model, as the name suggests is a combination of Fixed and Variable model, wherein you may commit an estimated fixed price for the full time dedicated employee you may need and if the work increases beyond the full-time employee hours, you pay as per the variable model i.e. only for the hours spent in excess.

There are two mainstays to your outsourcing strategy – the quality of the services you subscribe to and the engagement model.

Conclusion

This article allows you to identify challenges faced with outsourcing and find a solution to them. Further, a rock-hard, workable, and future focussed strategy pledges that you are able to meaningfully justify outsourced service providers and choose the partner who is best placed to deliver the benefits of outsourcing to your company you function as a remote firm locally during Covid-19.

It is also important to watch out for breakdowns in your current local accounting teams and make sure to protect the psychological health of your employees during this time and outsource wisely to share the workload by cost-effective means. We know that accountants are at the frontline of this financial crisis and outsourcing workload whenever possible would prevent possible burnouts.

Jun 16

3

Virtual CFO – Meaning, Benefits & Need for Business

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Virtual CFO – Meaning, Benefits & Need for Business

Increasing your company’s revenue is the most satisfying thing for any passionate entrepreneur. There’s no feeling quite like the one that comes with hitting a financial goal that’s long been on your horizon. But reaching new revenue levels also comes with growing pains.

If you’ve hit this point, one big question on your mind might be, what is a virtual CFO? And more importantly, does my business need one? Read on to learn about the services a virtual CFO provides, the benefits of having one, and how to determine whether virtual CFO services are a good fit for your business.

Virtual CFO - Meaning

A virtual CFO or vCFO stand for virtual chief financial officer. A virtual CFO is an outsourced service provider offering high skill assistance in financial requirements of an organization, just like a chief financial officer does for large organizations. Instead of going to the trouble (and expense) of hiring, training and bringing someone with these qualifications into your organization, you’re getting access to someone who can handle all of this remotely on a schedule that works best for all involved.

The number of startups has ballooned in the past decade, with technology paving the way for more entrepreneurial activity than ever before. Limited capital and a lean operation are typically some of the defining characteristics of startups; as such, the need has grown for a way to work with niche professionals, like marketers, strategists and accountants, at an affordable cost.

Enter the world of outsourcing.

Here are just a few of the services a virtual CFO might provide:

Accounting Services
Treasury Management
Compliance Management
Fixed Asset Management
Payroll Management
Financial Planning & Analysis
Financial Reporting

Virtual CFO - Benefits

There are many benefits to hiring a virtual CFO to help manage your growing company’s financial posture.

Control costs

Perhaps the biggest benefit of a virtual CFO is the ability to control costs.

The major reason why smaller organizations in particular are finding vCFOs so helpful is that they’re a viable way to control costs almost immediately. Rather than paying the salary to hire your own CFO in a full-time capacity (which can easily balloon into the hundreds of thousands of money per year once experience and benefits are accounted for), you get the services you need, in an on-demand way, for a fraction of the cost.

Rather than paying someone for a lifetime’s worth of education, you’re only paying for the skills needed to perform the tasks at hand.

Customize based on your needs and budget

Every business work in their unique style and the requirements differ from one company to another. A virtual CFO service can customize the skills and scope of work necessary to fit the company at hand, without paying for anything that’s not needed. These services can also be shifted as needed as your business grows and evolve. All of this provides you with almost unprecedented access to a wealth of knowledge that used to be out of your budget.

Consider the types of challenges that you’re likely to experience over the course of just five years. Your business will naturally get more complex as you add not only more employees but also suppliers, vendors and all the contracts that come with them. If you go through a period of rapid growth, it can quickly cause your financials to grow out of control … unless you’re prepared for it.

A good virtual CFO also recognizes that he or she is, most likely, a temporary solution. A virtual CFO who does his job well will ultimately become redundant as the company grows into a position to hire an actual full-time CFO. A virtual CFO can help transition your company from an outsourced to an in-house chief financial officer position when the time comes.

Diverse expertise

Most virtual CFOs work with a handful of different clients, enabling them to maintain affordable rates for each one. As a client, you’ll benefit from this diverse pool of experience and expertise.

A virtual CFO sees countless different financial situations and resolves a number of diverse financial conundrums. Chances are, whatever your unique situation, your virtual CFO will have seen it—or something similar—before and can advise you accordingly.

Virtual CFO – Need for a Business

Now that you understand what a virtual CFO is and some of the benefits to be gained from hiring one, the next question you’re naturally asking yourself is, is it the right solution for me?

Well, the first thing to know is that a virtual CFO is not a good solution for all businesses. In some cases it’s simply not yet necessary, while in others an outsourced arrangement is not the best fit. Finally, and most importantly, if your financial house is not yet in order, you need to take care of that first. In order to be able to strategize your finances, you must first have a clear and stable understanding of what they look like.

Here are a few scenarios when it might be a good time to hire a virtual CFO for your business.

Your business is becoming more complex

When it’s just you working in your basement at midnight, things are usually pretty simple, financially speaking. They get more complex as you add employees, suppliers, vendors, contracts, and other components to the business.

If your growth has complicated things to where a bookkeeper alone doesn’t feel like a sufficient financial solution, it might be time to hire a virtual CFO.

You’re experiencing rapid growth

Growing quickly is a good thing!…until suddenly it’s not. Rapid growth can put your financials into a tailspin, especially if you are not prepared for it. A virtual CFO can help you navigate periods of accelerated growth and put the appropriate systems in place for the next phase of your business.

Your financials are unfavourable… and you’re not sure why

Nearly all companies go through unfavorable periods at some point. It’s part of doing business. The key is understanding why they’re happening so you can take the necessary steps to right the financial ship.

If you’re struggling to maintain or grow profitability and you don’t know why, a virtual CFO may be the right person to add to your team.

You lack the detailed financial understanding needed to make decisions

For Virtual CFO, it is all about informed decision making. One of the main priorities to work with virtual CFO is to give you clarity around your finances so you can make sound business decisions.

If you’re struggling to make decisions—both big and small—in your business because you have a foggy idea of your numbers, working with a virtual CFO may be a good idea.