It has been observed that many students from leading business schools are opting to start a business over taking a job offer. Though start ups offer big upside, these young entrepreneurs cannot afford to ignore these five things.
International Money Matters
Being an entrepreneur is exciting at any age, it is the fire in the belly to see your idea take shape. I started at an age which would be a little late for most people (I founded International Money Matters at the age of 40 a week shy of 41). People do leave well settled jobs to start their own ventures.
But, we also see students just passing out of B Schools decline high paying jobs to start their own businesses and this is a trend we don’t see reversing in the near future. As an entrepreneur myself, I’d like to share a few guidelines for anyone starting his/her business, but mostly for the students who start their own ventures:
1. Idea: When someone starts a business, there is an inherent idea which they are passionate about and would like to give shape to. Before going into execution of the idea, they must look for 2 more things in the idea- whether it is something they are good at, not only passionate about and whether this will make money for them. If the answer to both these questions is yes, then that’s definitely a very positive sign.
2. Funding: Since these are not only first time businessmen, but also earning money for the first time. They must look into where the funding of the business is going to come. For most of us, this happens through friends and family at least the initial funding. When does the venture start making money, what happens to cash flow management on a monthly basis- there are no rights and wrongs, there are various styles which work for different kinds of people. But, there are things to be wary of- for eg: if the business does not make money in the first 2 – 3 years, should it still be continued, for how long? When does the business start making profits, how much? If tweaks are required in the pricing, how are these decisions being taken?
3. Personal vs business finance: The perpetual fight of an entrepreneur- business vs personal money. All that the entrepreneur has; eventually finds its way into the business- be it money or his time. The entrepreneur needs to insure his life and health to ensure that his business and his present/future family do not get impacted in case of any eventuality to him.
4. Investing idle cash: In a business there is a perpetual requirement of money ie. cashflow crunch. However, if at any time there is a surplus or idle cash lying in the account- this can be invested for short durations without any risks thereby not letting the money lie idle. Efficient planning helps in estimating when the requirement will arise and the funds can be planned accordingly.
5. People: The single biggest asset when it comes to new businesses especially. Take time in recruiting and selecting the people that will not only fit your business, but also people who are passionate about your idea the way you are. The initial team might later be part of a core team that will take the business further. So, don’t settle for anyone lesser than the best for your team. Apart from selecting the best, you need to retain them too. You should invest in their training and development as much as your own. Investment in training is one of the best investments you can make for your business.