Small businesses and startups need strong financial planning to survive in competitive markets. The document provides 5 tips for financial planning: 1) Make the business model scalable and focus on a core competitive advantage. 2) Closely manage cash flows and avoid non-profitable expenditures. 3) Consider alternative investment funds like VCs and angel funds that provide funding and mentoring. 4) Going public through an IPO can raise funds from public investors. 5) Obtaining SME/MSME status provides eligibility for government funding and listing benefits. Strong financial planning is crucial for startups to control costs and access necessary funding.

1. [Investing in small businesses –
Financial and Investment ]

2. Introduction
India has seen a surge in start-ups in the past
decade owing to factors such as strong
demographic dividend, favourable
government, easier entry, simpler legal
aspects, and strong financing support from
VCs and Angel Funds. However, like all of us
need to perform financial planning as a crucial
part of our lives, start-ups must also conduct
financial planning to survive in a highly
competitive market.

3. Following are 5 financial and
investment planning tips to help your
startup survive:
Business scalability
• Business is not performed the same way it used to be performed couple of
decades ago.Earlier, business was all about managing activities from end-
to-end.Today,business involves increased focus on one or two key aspects,
whicha start-up could use asits competitive advantage.As a start-up, you
must remember that more often, it is the competitive advantage that
you’ve gained that makes your business model highly scalable, helping you
take it global. Mark Zuckerbergsimply focussed on making his start-up,
Facebook, a content management company that has zero content made by
its internal resources. Today, Facebook is the world’s largest content
management company with no content owned by the company. It is
crucial for you to remember that make your business model scalable is the
first step for you to survive as a start-up.

4. Take control of your cash flows
• As a start-up, cash is a vital element of your business.
Thus, you will have to be very frugal in the way you
manage your cashflows. The best way to do it is by
mapping your cash flows closely with your profitability.
This will help you avoid expending money on activities
that are not profitable for your start-up, which means
the money can be invested in improving business
aspects. Try appointing consultants for performing your
activities rather than having full-time staff for every
activity, since their salary will be a fixed monthly cost
for you, which will further dent your cash flows.

5. Lookat Alternative Investment Funds
(AIFs)
• Most start-ups approach AIFs today for their
funding requirements owing to the being more
flexible than bank financing. Many start-ups
today receive money from Venture Capital (VC)
and Angel Funds. The best part about
approaching AIFs for funding is that they tend
you provide you with financial help just when
your start-up would need it. Moreover, they tend
to provide start-ups with appropriate guidance
and mentoring coupled withsupport in terms if
client networking.

6. Think about IPO
• Initial public offering (IPO)provides astart-up
with an opportunity toprocure funds from the
public through inviting them to invest in the
company’s shares against an ownership stake
to the extent of shares they subscribethrough
the IPO.Thus, start-ups can look at listing their
business on prominent Indian stock exchanges
such as BSE Sensex and NSE through the IPO
route.

7. See if you can gain SME or MSME
status for your start-up
• All you need to do is gain SME or MSME status
is to see how you can satisfy the eligibility
criteria. In case you qualify as SME or MSME,
you can many benefits such as funding help
from the government and SME listing.

8. To know more about investment and financial
tips for startup or for financial planning
services, please visit us at
http://http://www.altsmart.in.