A SUCCESSFUL STARTUP

A SUCCESSFUL STARTUP

Do you know the strict truth about the start-up of the country? More than 200 start-ups have been closed last year. Their closure has increased by 50 percent compared to the year 2015. Of these, seven start-ups were started in the year 2014 and they had raised well enough money for their work.


Why was it stopped even after getting funding? The founder of a start-up was recently arrested by the police for the pending duo. This gives some lessons for entrepreneurs to learn.
How can it be ensured that startups move towards success? The answer is that the venture can be made financially efficient so that it does not face a crisis in the long run. We have talked with many experts to understand this.

Keeping the figures accurate,

The startup accelerator and managing partner of Venture Capital firm Vector Partners, Shrikant Parthasarthi said, "Even after getting funding, the main reason for the start-up failure is that they can not understand the unit economics."


Unit Economics means that you can not sell a product at a lower cost than its cost. Bhaskar Majumdar, managing partner of the Early Stage Venture Fund, Unicorn India Ventures said, "If the business is to be profitable then the unit will have to make an income at the level of economics."

First, you need to keep in mind that all direct and indirect expenses are on the right road. For correct figures, they should be reduced at the unit level only. It is very important to be in the benefit of Unit Economics for the success of a business. If it is in damage then it needs to work immediately. Rohit Chokhani, a principal founder of Venture Capital firm White Unicorn Ventures, who supports the start-up, said, "A company can go from net loss to the net profit stage, but it is impossible to get a net profit from gross loss." Pricing is the most important. Customers buy your product more and more, so you can not keep your product lower than the cost.

Learn to handle cash: 

The unrestricted flow of cash in a new venture can undermine its position. Siddharth Chandurkar, founder of enterprise platform Shep Hertz Technologies for digitization, said, "Many startups fail because their cash is expired very soon." You should try to extract maximum output at a low cost.
For example, if your start-up has a capital of Rs 12 lakh and you are spending one lakh rupees every month, then your cash will end after 12 months. To start with, no startup should be dependent on external investment. Unfortunately for start-up funding is considered as free money, while it is a liability. Because of this, the cost of start-up increases and they struggle with a cash crisis.


Parthasarthi said, "Funding should be used according to the long term value creation. Most of these do not a startup.


You have to work wisely to spend less cash. Spending too much or too little can be harmful. Majumdar said, "It is necessary to spend to make its place in the market. This can lead to cash loss though. What is the need for you to spend less on the company's growth path? "It will be possible to start up a profit." Stanford Angels and Entrepreneurs India founder Paula Mariwala said, "Spending too much cash on things like marketing at the beginning stage can be a loss deal for the startup.


You have to work wisely to spend less cash. Spending too much or too little can be harmful. Majumdar said, "It is necessary to spend to make its place in the market. This can lead to cash loss though. What is the need for you to spend less on the company's growth path? "It will be possible to start up a profit." Stanford Angels and Entrepreneurs India founder Paula Mariwala said, "Spending too much cash on things like marketing at the beginning stage can be a loss deal for a startup.


It is, therefore, necessary to keep an eye on expenditure and cash flow. It is important to run a long-term business that you review it every week. Along with this, it is important that you make every person sensitive to the start-up in that they control the expenditure and try to save. Keep in mind that capital mobilization is a time-consuming process, and cash flow is possible only after the business is profitable.

Think about the sale Your focus should be on sale from the very first day. Sandeep Mathur, MD of Sales Management Consulting Firm, Link Bij Corporation said, "Keep in mind the product design stage as to how you are going to sell it."


Identify your potential customers and try to talk to them. Feedback about the product's price and offer. Optimize your sales cycle. Your estimation of sales should be ground. If the sale is not increasing, then you can again make its strategy. The gross margin on the sale is the second most important aspect. Founder and Serial Enter Prairie Alok Kejariwal of Games2 Win said, "If the margin is very low, then it can be a matter of concern for you because your earnings will not rise very fast and it will take time for a start-up to come in profit. '


To be successful in the long run, you need to understand the full mathematics of profit-loss. "The financial literacy of many new entrepreneurs is very poor," said Aniruddh Malpani of Seed funding firm Malpani Ventures. They do not understand the difference in cash flow, financial statement and earning a profit. "The founder should start understanding every aspect of profit-loss. At the same time, he should also understand the costs like technology, marketing, general and admin. Kejriwal said, "All these expenses should be in proportion to the sale so that start-up founder should help track what these expenses are and whether they are on the right track compared to big companies." For instance, if a start-up The sale was worth Rs one crore and if she had to pay Rs 85 lakh in the salary, it is a danger bell. 85 percent of any sale can not be spent on salary.


Expectations and estimates make expectations and estimates on many start-up top-down approaches. Mariwala said, "People think: The market is so big, if we capture one percent in this, then our company will become a million-dollar company." Such estimates show a picture of an unrealistic future. He said, 'We remind entrepreneurs that expenditure is a reality and earning is a hope. Plan with the right expense and make accurate estimates of the earnings. '


The wrong estimation can also put you in a crisis of cash. Kejriwal said, "Many people play on excel sheets. It does not make any sense and it often becomes the reason for being bankrupt for startup. 'Estimates can be anything. The correct accounting can help you a lot. The best thing is that you get a point-top approach. Here you have to experiment, in which you can learn a lot while failing.


Keep track of salary As the start of the start-up, the entrepreneurs forget about salaries, it becomes a major reason for their failure. Kejriwal said, "They are not taking salaries, but they should add at least 70 percent of their salary to the account so that they can keep account of the expenditure on the venture/product." There are many such cases in which The entrepreneur started the start-up eight years ago and they are not taking salaries till now.


Now if for some reason the founder has left the company or sold it, then he needs someone of his caliber to run it. If the expenditure on the salary of the person appointed to him will not be expended by the company's earnings then the value of the firm will end.


The greatest challenge to appointing the best team at the right expense is not the maximum appointment. Kejriwal said, "It is very easy to appoint expensive people. It is a very difficult task that you can work worth making money from those expensive people. '


For example, if you hire a waiter from a Leading Tech company and offer them 1.5 million rupees instead of the one million rupees paid in the old company, then it does not mean that they earn as much as you do for them. Find as much as they could for the old company.

This is because there is a huge difference between a company and a new company. You should not appoint anyone by thinking that when the business grows, that person will come to your work. Majumdar said, "Based on every case, an appointment to startup is the best fund."


Free models have become common for the Revenue model start-up, the real earning model is never taken seriously. You spend more to build a customer, but for this, the business earnings model should be better. This is a great recipe for a customer to make for himself forever. India Mart CEO Dinesh Agrawal said, "For one success, I accepted the failure of 40-50 times. Over time now my thinking is clear- if your project is not earning one percent, then shut it down and proceed. '


It is not enough to just have the technique or idea for the success of the start-up. Finance is the most important factor in success in business and long-lasting. Think of earning instead of just thinking about the product, the startup will be successful.

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