ACCA -創(chuàng)業(yè)者指南：財會專業(yè)人士的關鍵作用

ThinkAhead

FOUNDER'S

GUIDEFOR

START-UPSAND

ENTREPRENEURS:

ROLEOF

ACCOUNTANCY

ANDFINANCE

2

Foreword

Start-upsinIndiahaveseenremarkablegrowthinrecentyears,withIndiaemergingasthethird-largestbusiness

ecosystemfornewventures,globally.ContributingtoIndia’sambitionsofbecomingaUS$5trillioneconomyby2025,start-upsarebeingseenasthespineofanewIndia.

Successinentrepreneurshipreliesoneffectivefinancialmanagement.Maintainingfinancialdisciplineiscrucialforestablishingarobustfront-endwhilebeingcompliantwithlawsandregulationsbuildsasolidback-endfoundation.

Accountancyandfinanceprofessionals,includingaccountants,financialanalystsandtaxexperts,playacrucialroleinhelpingstart-upsaddressfinancialissues:fromprovidingtherequiredmaturityinfinancialprocessesthatisessentialto

raisinganInitialPublicOffer(IPO),forexample,throughtoensuringcompliancewithregulatoryandtaxationrequirements.

Inthisguide,ACCA,inconsultationwithitsmembersandindustrypractitioners,laysdownthedosanddon’tsacrossthekeyaspectsoffinancialmanagementforastart-upandforanentrepreneuraimingtocreateasubstantialbusiness.It

alsooutlinesvarioustouchpointswithaccountancyandfinanceprofessionalsandtheskillstheyneedtocontributeeffectivelyasthoughtpartners.

Relevantforentrepreneurs,buddingentrepreneurs,andaccountancyandfinanceprofessionalskeentoworkwith

entrepreneurs,thisguideisACCA’scontributiontosupportingthethrivingstart-upecosysteminIndia.Inlinewith

ACCA’spublicvalueagendaforsupportingourmembers,futuremembers,andtheaccountancyandfinancecommunityatlarge,thereportofferspracticaltipstoempowerthemtopursuetheirentrepreneurialdreams.

Md.SajidKhan

Director–India

ACCA

3

Contents

EXECUTIVESUMMARY4

INTRODUCTION7

1.FINANCINGTHEBUSINESS

1.1Valuation

1.2Cashflowandworkingcapital

8

9

12

2.BUSINESSIMPROVEMENT

15

2.1Performancemanagement

16

3.CORPORATEGOVERNANCEANDCONTROLS

18

3.1Ethicsandcorporategovernance,internalcontrols

19

3.2Managingrisks

22

3.3Regulatoryandtaxation

24

Acknowledgments28

FOUNDER'SGUIDEFORSTART-UPSANDENTREPRENEURS:ROLEOFACCOUNTANCYANDFINANCE

EXECUTIVESUMMARY

Executivesummary

Withmorethan200%growthinthenumberofstart-upsoverthelasteightyears(to100,000+in2023from450in

2016),Indiaisnowtheworld'sthird-biggeststart-upecosystem(MinistryofExternalAffairs2023).Thankstosupportfromthegovernmenttoimprovetheeaseofdoingbusiness,over80start-upsarebeingrecognisedperday(the

highestglobally)(Mint2022).

Managingfinancesisattheheartofsuccessfulentrepreneurship,andthatiswherethisguidewillcomeinhandy.

Designedwithinputfromentrepreneursandfinancepractitioners,itanswersthesixkeyquestionsforentrepreneursplanningtheirstart-up’sfinancialjourney.

1.Howtosecureagoodvaluation?

ACCAaskedvaluationexpertsforthesecrettosecuringgoodvaluation:aviableproductandastrong‘proofofconcept’istheiranswer.

Asyoubootstrap/self-financeyourventureinthepre-start-upstage,focusontheidea.Astart-up's

valuecomesfromhavingauniqueproductthatpeopleuserepeatedly.Iftheproductisfreshand

usefulandbringslong-termbenefits,it'svaluable.Forfundraisingatthestart-upstage,venturefundsandangelinvestorslookattheproduct,theentrepreneur’sskills,thetargetmarketandthegrowth

potential.Developtheideaandtestyour‘proofofconcept’,asyoulooktoraisefundsthrough

instrumentssuchasamergeroracquisition(M&A),anIPOandprivateplacementinthegrowthphase.

2.Howtomanageday-to-day?nances(cash?owandworkingcapital)?

Bymanagingandallocatingresourceseffectivelytowardscapitalandoperationalexpenditures,youcanimprovefinancialperformance,reducecostsandincreaseprofitability,resultinginsustained

growth.

Founderswhohavebeenthroughthisjourneyrecommendthatyoumakesureyourfunder

understandsyourbusiness;planyourneedssixtoeightmonthsbeforeandexploremultipleoptionsoffinancing;keepyourstockreportsandotherpaperworkupdatedandstaycleanfinancially;extendtheperiodoverwhichyouuseupyourinitialcapital(iereducethe‘burnrate’)togeneratevalue;managereceivablesforefficientworking-capitalmanagement;exercisecontroloverturnoverandmanage

inventoryeffectively.Hireaccountancyandfinanceprofessionalstohelpyouordeveloptheacumeninternally:havingsomeoneonyourteamwhounderstandsnumbersiscrucial,asearningand

managingmoneyrequiredifferentskillsets.

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FOUNDER'SGUIDEFORSTART-UPSANDENTREPRENEURS:ROLEOFACCOUNTANCYANDFINANCE

EXECUTIVESUMMARY

3.Howtoensurecontinuousgrowth?

Accurateandup-to-dateinformationhelpsyoumakeintelligentandinformeddecisionsforbuildingyourfuturesuccess.

Definetheessentialsforyourbusinesstosurvive(thecriticalsuccessfactors)andthekeyperformanceindicators(KPIs)foreach.Setupafinancialandperformancemanagementsystem(PMS)thatrecordsyourprogressagainstthebaselineandrecommendsactionstobetaken.Chooseasystemthatis

simpleandeasytouse,providestimelyupdates,isrelevanttoyourneedsandisscalable.Focusonwhatthedatarevealswhenmakingoperationalandstrategicdecisions.Andifthisallsoundstoo

complex,hireanaccountancyandfinanceprofessional,becauseidentifyingandreportingonKPIsisoneoftheircorecompetencies.

4.Howdogoodcorporategovernanceandinternalcontrolshelp?

Theexpertstellustheyareessentialforbuildingasolidfoundation.Corporategovernanceand

internalcontrolscanbeunderstoodsimplyas‘doingtherightthing’forcustomersandemployees.

Havingacompliantbusinesswithsolidinternalcontrolmechanismsprovidesacompetitiveedgewhenseekingfundsfrominvestors,helpsinbuildingthecompany’sreputation,andpreventsfraudand

errors.

Ensurecompliancewithrelevantlawsandregulationsbecausenon-compliancewillmakeyour

businessnon-viable.Asthebusinessgrows,investinstrongfinance,internalauditandcontrol

mechanismswhilebalancingtheseagainsttheflexibilityrequiredforinnovation.Seekcounselfromexpertstogetitrightthefirsttime.

5.Howmuchriskistoomuchrisk?

Takingrisksisfundamentaltoentrepreneurship.Risksrepresentopportunitiesifyouknowhowtousethembutiftheymaterialisetheycanalsobeyourworstnightmare,ifnothandledproperly.

Prudentrisk-takingisthekeytosuccess.Takecalculatedrisksandavoidanythingthatcouldputa

questionmarkonyourbusinessmodel.Asanentrepreneur,youneedtoembedriskmanagementinthecultureoftheorganisation.Self-examinationanddelegationareimportanttoenablecalculated

risk-taking.Havesystemsandprocessesinplacetomonitorrisksandreducetheirimpact,shouldariskmaterialise,throughback-upplans.Seekprofessionalhelpwhereverneeded–theunpredictabilityofnewregulationspresentsrisksforwhichentrepreneursneedtoprepare,forexample,andaccountancyandfinanceprofessionalscanguideyouthroughtheprocesses.

6.HowdoImanagetheregulatoryandtaxationissues?

Whiletheeaseofdoingbusinesshasimprovedconsiderably,regulatoryandtaxcompliancescanbeintricateandoftenposechallengestostart-ups.Understandingandcomplyingwithregulationsis

essentialforbusinessestothrive.

Havingaminimumknowledgeoftheapplicableregulationsandcomplianceisessential.When

consideringregulatoryissues,choosingalegalstructuresuitableforyourbusinessisthefirststep.

Understandthelicensingandpermitrequirementsforyourbusiness,andensurecompliancewith

labourandenvironmentalregulationsaswellastheForeignExchangeManagementAct(FEMA)

guidelines(ifyoureceiveforeigninvestments).Commontaxationcompliancesincludeincometax,taxdeductedatsource,employeeprovidentfund,employeestateinsuranceandcompliancewithgoodsandservicestax.Seekexperthelp:accountancyandfinanceprofessionalsplayakeyroleinhelping

start-upswithregulatoryandtaxationissues.

FOUNDER'SGUIDEFORSTART-UPSANDENTREPRENEURS:ROLEOFACCOUNTANCYANDFINANCE

EXECUTIVESUMMARY

‘EntrepreneurshipisliketheOlympicsofbusiness.

Runningasuccessfulbusinessisacombinationof

multipleattributes.Haveregulatoryawarenessandseek

therightadvisersandmentorsforguidance,asyoufocus

ondevelopingyourcorebusiness’

(JamilKhatri,co-founderandCEO,UniqusConsultech)

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3.Corporategovernanceandcontrols

Ethicsandgovernance,

andinternalcontrolsManagingrisks

Regulatory&taxation

issues

1.Financingthebusiness

Valuation

Cashflowand

workingcapital

FOUNDER'SGUIDEFORSTART-UPSANDENTREPRENEURS:ROLEOFACCOUNTANCYANDFINANCE

INTRODUCTION

Introduction

Whatcomestomindwhenyouheartheword‘start-up’?Avaluationofabilliondollars?Orthevisionofbuilding

somethingthat’sgoingtohelpsolveoneofthemanychallengesthattheworldfaces?Orthewonderfulfeelingofbeingyourownboss?Irrespectiveoftheobjective,thethrillofbuildingabusinessworthmultimilliondollarsfromscratchis

excitingbutthethoughtoffiguringouteverything,fromsalesandmarketingtomanagingfinances,canbedaunting.

Managingfinancesisattheheartofsuccessfulentrepreneurship.Andthatiswherethisguidewillcomeinhandy.

Designedwithinputfromentrepreneursandfinancepractitioners,itsetsoutstep-by-stepplanningforthefinancial

journeyofyourenterprise.Itoutlinestheprocessesacrossthesixkeyfinancialmanagementstagesandhighlightsthedosanddon’ts,withexamplesfrompeoplewhohavealreadybeenonthisjourney,whetherasfounders,accountancyandfinanceprofessionalsworkingwithfounders,orinvestorsandincubators.

Whetheryouareanentrepreneur,planningtobecomeone,oranaccountancyandfinanceprofessionalkeentoworkwithentrepreneurs,thisguideisforyou.Herearethethreeareasandsixkeystagesyouneedtoplan/helpplan,whichwewilllookatinmoredetailbelow.

FigureI1:Planningtolaunchyourstart-up

2.Businessimprovement

Performance

management

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FOUNDER'SGUIDEFORSTART-UPSANDENTREPRENEURS:ROLEOFACCOUNTANCYANDFINANCE

1.FINANCINGTHEBUSINESS

1.FINANCING

THE

BUSINESS

9

Growth

-1

0

2

3

1

Time

-2

FOUNDER'SGUIDEFORSTART-UPSANDENTREPRENEURS:ROLEOFACCOUNTANCYANDFINANCE

1.FINANCINGTHEBUSINESS

1.Financingthebusiness

So,youhaveyourproofofconceptandarereadytogetthingsstarted.Understandinghowtofinanceyourbusiness

sustainablyisthefirststep.Therightfinancingcandomorethanjustprovidethecashyourventureneedstofunction.Itcanalsominimisecostsandreducerisks(seeACCA2016).

1.1Valuation

Evaluatingastart-upisbothascienceandanart.Valuationdeterminestheworthofanewfirmandhowmuchmoneyanyonewithastakeinthecompanywillmakeonexit.Findingthesweetspotofyourcompany’svaluationcanmakeorbreakapotentialsupporter’sdecisiontoinvestinyourcompany.Whatarethekeystagesinastart-up’sjourneyleadinguptothevaluationstageandwhatarethemeansofsecuringagoodvaluation?Thesearethekeyquestionsyouasa

buddingentrepreneurneedtoconsider.

Figure1.1:Keystagesforstart-upsandsourcesoffunding

START-UPDEVELOPMENTPHASES

Scale

Vision&Mission

ProductMarketFit

Minimum

Viable

Product

(MVP)

IdeationConceptingCommitmentValidationScalingEstablishing

Growth

Start-up

Pre-start-up

Source:Mavilach(2020)

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FOUNDER'SGUIDEFORSTART-UPSANDENTREPRENEURS:ROLEOFACCOUNTANCYANDFINANCE

1.FINANCINGTHEBUSINESS

Pre-start-up

Bootstrapping/self-financinginvolvesstartingthebusinesswithlittleornoventurecapitaloroutsideinvestment.The

initialinvestments(pre-seedandseedfunding)generallycomefromthesavingsofthefounder,orfromfamily,friendsoracquaintancesofthefounder.

AdityaAgarwal,cofounderofCampusSutra,explains,‘bootstrappingisgrowingacompanywithouttaking

anyexternalequityfunding.Bootstrappedstart-upsusepersonalfundsinitiallyandgraduallyraisemoneyfrombanks,basedonthebusiness'snancialhealth’.

Start-up

Commonfundingsourcesforthisstageareventurecapital(VC)fundsthatputrelativelylargeamountsofmoney(‘ticketsizes’)intotheirinvestments.VCscanprovidefundingforlate-stagestart-ups.Start-upsgenerallygetfundsinmultiple

stages,referredtoasSeriesA,SeriesB,SeriesC,andsoon,andsuccessfulprogressionislinkedtomarketperformance

andgrowthobjectives.Employeestockoptionplans(ESOPs)arecommonlyusedtoattracttalentandasateammotivation,aswellasafund-savingtool.Privateequity/investment?rmsareanotherfundraisingoptionfor

fast-growinglate-stagestart-upsthathavemaintainedaconsistentgrowthrecord.

Otheroptionsare1)incubators,whichassistentrepreneursbyofferingvalue-addedservices(officespace,utilities,

adminandlegalassistance,etc.)andcollateral-freedebt,byenablingaccesstolow-costcapitalprovidedbythe

governmentofIndia(readACCA’sresearchentitled

Spacetogrow:newmodelsofbusinesssupport(ACCA2020a)

tounderstandtheroleofacceleratorsandincubatorsassupportmechanisms);2)angelinvestors,whoinvesttheirmoneyinhigh-potentialstart-upsinreturnforequity,suchas

IndianAngelNetwork

and

MumbaiAngels

and3)crowdfundingviaonlineplatforms,suchas

Ketto

whereanumberofpeoplecometogethertocontributerelativelysmallamountseach.

ThegovernmentofIndiahasalsolaunchedinitiativesandschemestosupportentrepreneursandstart-ups.Herearesomeexamples.

1)The

StartupIndiaSeedFundScheme

providesfinancialassistancetostart-upsforproofofconcept,prototypedevelopment,producttrials,marketentry,andcommercialisation.

2)

AtalInnovationMission

supportstheestablishmentofAtalIncubationCenters(AICs)thatprovideaconducive

environmentforstart-upstogrow.Thesecentresoftenofferfunding,mentorshipandinfrastructuresupport.Read

here

tolearnaboutthe100+schemesfromvariousdepartmentsandministries,aswellasthestatestart-uppolicies(MinistryofCommerceandIndustryn.d.).Seemoredetailsinsection3.3.

Growth

Oncethereisfastmarketgrowthandincreasingrevenues,youandyourinvestorshavevariousoptions.

1)Inamergeroracquisition,youmaydecidetomergethecompanywithanexistingoneorsellyourstakeinthe

company.Themerger/acquisitionatthisstagewouldusuallybedonewith/byalarger,moreestablishedcompanyinthesameindustry.

2)Youmightdecidetolistonthestockmarketforthefirsttime,viaaninitialpublicoffering(IPO).PrivateplacementisalsoexploredasanalternativetoanIPO,thatis,whereastart-upsellssecuritiestoapre-selectedgroupofinvestors,thusallowingforfewerregulatoryhurdlesandmediaglare.

AccountancyandfinanceprofessionalsareintegraltotheIPOprocess,bringingintherequiredmaturityinfinancialprocesses,andensuringcompliancewithregulationsandtheextensivefinancialreportingrequirements.Their

contributionsextendtoprospectuspreparation,financialduediligence,andcontinuedpost-IPOcompliance,fosteringinvestorconfidenceandfacilitatingasuccessfulpublicoffering.

FOUNDER'SGUIDEFORSTART-UPSANDENTREPRENEURS:ROLEOFACCOUNTANCYANDFINANCE

1.FINANCINGTHEBUSINESS

ACCAspokewithDarshanaKadakia,PartnerandValuationPracticeLeader,GrantThorntonIndia

ACCA:Whatdeterminesagoodvaluation?

DK:Aviableproductandastrong‘proofofconcept’.Theproductshouldhavealonger-termviabilityfor

investorstoseevalueinit.Of100ideas,only10–15areacceptedbythemarket,sodoathoroughanalysisof

yourproductattheinitialstage.UnderstandthegrowthpotentialandtheUSP[uniquesellingpoint]ofyour

product/serviceasagainstthoseofyourcompetitors.Figureouthowwillyoudifferentiateitandhowyouwillmoveusersfromexistingserviceproviderstoyourproduct/service,orcreatenewusersforyourproduct/service.

ACCA:Whatarethethingstokeepinmindasastart-upmovesfromearlystagetovaluation?

DK:Focusontheidea.Conceiveanddevelopitastheactualvaluationcomesintothepicture,whena‘proofofconcept’isdeveloped.I’llsharetheexampleofthised-techcompanythatstartedverysmallwiththeideaof

designingcontentandassistanceforschoolteachersusingaB2Bplatform.Whiletheinitialvaluewaslow,oncetheirconceptandcontentwereappreciated(andupgraded[following]feedback),thatbecametheir‘proofof

concept’toreplicate.Afterthat,thestart-upstartedgettinghighervaluations.

Howdoyousecureagoodvaluation?

Designasustainablebusinessmodel,emphasisingtheuniquevaluepropositionoftheproduct.

Demonstratethevalueof,anddemandfor,theproductthroughconsistentrevenuegeneration.

Getaclearunderstandingofthemarketandcustomersandleveragetechnologytodriveefficiencyandgrowth.

Darshanaemphasisesthatagoodproofofconceptisthestartingpoint.‘Astart-up'svaluecomesfrom[having]auniqueandneededproductthatpeopleuseovertime.Iftheproductisfreshandusefulandbringslong-termbenets,it'svaluable.Investorslikeventurefundsorangelinvestorslookattheproduct,theentrepreneur'sskills,thetarget

marketandthegrowthpotentialbeforeinvesting’,saysDarshana.

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FOUNDER'SGUIDEFORSTART-UPSANDENTREPRENEURS:ROLEOFACCOUNTANCYANDFINANCE

1.FINANCINGTHEBUSINESS

1.2Cash?owandworkingcapital

‘Whilehavingagoodproducttosecurevaluationisimportant,equallyimportantismanagingthefundandunderstandingthenancialimplications’,commentsDarshana.

Akeypartoffinancialmanagementismanagingyourday-to-dayfinances:yourcashflowandworkingcapital.‘CapEx’and‘OpEx’areliketheyinandyangofabusiness’sfinancialworld.

Capitalexpenditure(CapExorcapitalexpenses)referstocapitalspentonassetswithlong-termbenefits,suchas,

property,plant,orequipment.CapExconsiststypicallyofone-timeexpensesandhasamoresubstantialimpactonthe

company’sfinancesthanOpEx.Itenablesbusinessestobuyorupgradelong-termassetscrucialforstartingorexpandingoperationsandincreasingproductioncapacity.

Operationalexpenditure(OpExoroperatingexpenses)referstotheexpensesincurredonday-to-dayoperations,suchassalaries,rent,utilitiesandmaintenancecosts.OpExisusuallyastreamofexpenditureincurredtokeepthe

businessrunning.

Whyandhowshouldanentrepreneurmaintainahealthyworkingcapital?

Workingcapitalmanagementinvolvesa)maintainingtheworkingcapitaloperatingcycle,ienumberofdaysbetweenpayingsuppliersandreceivingcashfromsalesb)minimisingtheamountofworkingcapital,andc)maximisingthereturnoncurrentassetinvestments.

Workingcapitalservesasametricforhowefficientlyacompanyisoperatingandhowfinanciallystableitisin

theshortterm.Capitaltiedupbyslow-movinginventory(referredtoas‘inventoryheaviness’),orhighnumberofoutstandingsalesinvoicescancauseliquiditychallengesandalotofoperationalstress.Dynamicdiscounting(offeringdiscountsforearlypayment–onboththesupplierandcustomerside),effectivecashflowforecastingthatissensitivetoreal-timeupdates,anduseofdynamicworkingcapitalmodelsandoptimisationstrategies

arecriticalforeffectivecashmanagement.

Someoftheratiostotrackinclude:

currentratio,whichmeasuresacompany'sabilitytocoveritsshort-termliabilitieswithitsshort-termassets;aratioabove1indicatesthatthecompanyhasmoreassetsthanliabilitiesintheshortterm

inventoryturnover,whichiscostofgoodssolddividedbyaverageinventoryvalue–thehigherthisis,thebetter

days’salesoutstanding(DSO),whichmeasurestheaveragenumberofdaysittakesforacompanytocollectpaymentafterasale.AlowDSOindicatesfastcashcollection.

Byeffectivelymanagingandallocatingresourcestowardscapitalandoperationalexpenditures,companiescannotonlyimprovetheirfinancialperformancebutalsoreducecostsandincreaseprofitability.Ultimately,thiscanleadtosustainedgrowth,whichistheholygrailforanybusiness.

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FOUNDER'SGUIDEFORSTART-UPSANDENTREPRENEURS:ROLEOFACCOUNTANCYANDFINANCE

1.FINANCINGTHEBUSINESS

Challenges/limitationstobeconsideredinworkingcapitalmanagement

Limitedaccesstofundingcanleadtocash?owproblems,makingitdifficulttocoveroperationalcostsandinvestingrowthopportunities.

Operatingatahigh‘burnrate’,meaningspendingmoremoneythanthecompanyearns,candepletecashreservesrapidly,leadingtoliquidityissuesifnewfundingsourcesarenotsecuredintime.

Delayedpaymentsfromclientscandisruptthecompany'scashflow,affectingday-to-dayoperations.

Economicuncertainties(suchastradewarsoreconomicdownturns)andmarket?uctuationscanaffectthefundingclimate,makingitharderforstart-upstosecurefunding.

Overvaluedstart-upsmightfacechallengesinmeetinginvestors'expectations,whichcanleadtoalossofinvestorconfidenceandfundingissues.

Changesinregulations/policiescandisruptthebusinessenvironment.Compliancewithnewrulesmightrequireadditionalinvestments,reducingtheavailableliquidity.

Internalissues,suchasmismanagementoffunds,overspendingonnon-essentialactivities,orinefficientfinancialplanningcanalsocauseliquidityproblems.

ACCAspokewithAdityaAgarwal,co-founderof

CampusSutra

ACCA:Whatareyourtipsforasteadycashflowandworkingcapital?

AA:

complexities,sotheygetit.Financialinstitutionsmoveslowly.Planyourneedssixtoeightmonthsbefore.Mix

quickerforshort-termneeds.Followprocesses.Keepupwithstockreportsandotherpaperwork.Stayclean

ACCA:Howdidyoumanagethefinancialaspects,suchascashflowandworkingcapitalinyourbusiness?Didyouhavesomeonewithafinancebackgroundtohelpyou?

AA:

alongwithmakingsureeverythingiscompliant,arealsohelpingusmakeandsavemoneybynegotiatingthebestinterestratesacrossgeographies,forexample.

professionaltohelpyouordeveloptheacumen.Vanitymatrices,suchasnumberoffollowersordailysales,shouldn’tbetheonlycriteria.Earningmoneyandmanagingitaretwodifferentskillsets,therefore,havingsomebodywhounderstandsnumbersisveryimportantasitholdsyouingoodstead.

ACCA:Anyothertipsforyoungentrepreneurswhoarejuststarting?

AA:Startwith[botha]‘10,000feet’anda‘10-feet’viewofthecompany.Youneedtotogglebetweenthem

makeyourownvision,missionandvalues,basedonwhatyouhavelearned.Takeinsightsfromsuccessfulentrepreneursbutdon’tignoreyour[other]learnings.Onceyourbusinessisestablished,youcanhaveyourteamsfocusonthe10-feetvisionandyoucancontinuetofocusonthe10,000-feetview.

FOUNDER'SGUIDEFORSTART-UPSANDENTREPRENEURS:ROLEOFACCOUNTANCYANDFINANCE

1.FINANCINGTHEBUSINESS

ACCAspokewithAlexDanylenko,ManagingDirectorandFounderof

Boodmo

ACCA:Howdoyoumanageyourcashflowandworkingcapitalrequirements?

AD:Workingcapitalisverycrucialrightfromthestart.Frommylearnings,Iwillsayentrepreneursshouldfocusonreducingthecashburnratetogeneratevalue,andavoidhurriedfundraising.Adeeperlookinto

inventoryeffectively.

ACCA:Anyothertipsforentrepreneursstartingout?

AD:Forentrepreneursseekingfundinginthecurrentenvironment,it'scrucialtodemonstratesuccessbefore

approachinginvestors.Conductnumeroustransactionstotestandscaletheidea.Showrealsalesachievements

emphasisingsustainabilityoverrapidbutunsustainableexpansion.

Financialdisciplineplaysavitalroleinentrepreneurship.Educationisvaluable,butstartingasuccessful

businessrequiresmorethanjustacademicknowledge.Seekadvicefromprofessionals,especiallywhendealingwithsomethingneworrisky.Embracealearningmindsetandprioritisecontinuousdevelopment.

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FOUNDER'SGUIDEFORSTART-UPSANDENTREPRENEURS:ROLEOFACCOUNTANCYANDFINANCE

2.BUSINESSIMPROVEMENT

2.BUSINESS

IMPROVEMENT

FOUNDER'SGUIDEFORSTART-UPSANDENTREPRENEURS:ROLEOFACCOUNTANCYANDFINANCE

2.BUSINESSIMPROVEMENT

2.BUSINESSIMPROVEMENT

Businessimprovementsaremostsuccessfulwhenbackedbygoodfinancialmanagement.Accurateandup-to-dateinformationletsyoumakeintelligentandinformed

decisionsforbuildingyourfuturesuccess.

2.1Performancemanagement

Whatis‘performance’toyou?Isitprofits?IsitIPOvalue?Isitsomesocialgoal?What‘performance’meanstoyouisdefinedbywhatyouhaveincludedinyourmission

statement,visionandobjectives.

Buthowdoyouknowifyouhaveachievedthatgoal?Toanswer,youneedtoensurethatyouhaveasystemora

processinplacetorecordwhatyouhavedefinedas

‘performance’,howyouareprogressingtowardsthatgoalandwhatactionscanbetakentoachieveit.Monitoring

thoseareasthatareessentialforyourbusinesstosurviveiscrucial.That’swhatperformancemanagementisall

about.Goodperformancemanagementreducesriskasyoukeepaneyeonboththepresentandfuture.

Managingperformance:whatdoyouneedtodo?

Therecipeforgoodperformancemanagementisrathersimple–butaswithcooking,thesuccessoftheresult

dependsonhowwellyouexec