Our growth economy has given birth to plenty of new age entrepreneurs running small businesses to meet the needs of the corporate world. This new breed of entrepreneurs consists of people who get up their secure jobs or youngsters who are just out of college.
But begin in business has its own pros and cons. Some of the positives are that you get to create your own special world, something that is truly yours. You work in your terms and requirements, choose your work timing and therefore choose how much you want to earn.
On the other hand, running your own business includes a share of problems as well as. For instances, the security of earning a monthly salary assured assignments of day to day activities, definite performances appraisal at the end of each year, perks of various kinds from your company, etc. all vanish at one go. The added concern of renting a place, buying equipment, hiring and managing people, ensuring a continuous flow of business and the risk of incurring losses, are all part of the flip side of owning an enterprise.
Most people succeed in business because of unlimited passion, hard work and perseverance. To top it all, since the economy is booming, failure in business is unlikely, provided the business model is sound.
However, one issue which is often mishandled by most young entrepreneurs is ‘finance’. Let me illustrate some important aspects of finance where we, as young professionals, may go wrong.

A new business normally fetches good profits in the initial stages, owing to fewer overheads and personal involvement in the execution of work. As you continuously deliver quality results, your business begins to grow. Thanks to the feel-good factor, expansion is rapid and your business required more manpower. Investment towards infrastructure, expansion of facilities and sometimes diversifying as well. A careful analysis at this point in time will highlight that the increase in turnover may not correspond to proportionate increases in profitability.

A customer is normally the happiest when he deals with a relatively new entrepreneur, as it increases his bargaining capacity. Being aware that you need business and will go out of your way to get the deal, he makes the best use of this opportunity. He makes the best use of this opportunity. He uses classic lines like ‘Give me the best price and I will give you continuous business’ or ‘I do not have great budgets now, but I will make up for it the next time’ or ‘make me happy and see how I will promote you with other departments or companies’.
My experiences say that nobody ever gives you repeat business or refers you to someone else on the strength of pricing alone. The world wants quality first and then everything else follows. So, evaluation of each business deal and profit margin will confirm if it’s worth taking an assignment and moving forward. Learn to say a no to one-sides deals. The great strategies Chanakya said, “it is not worth working on a project if your profits cannot match your efforts.”

Many young businessmen suffer from the ‘complement syndrome’. The performance earns them repeat business from the client and also unlimited appreciations and complements. But they sometimes get carried away with these good words, that the real reason for being in business is forgotten, resulting in an extension of credit to customers or not raising loans etc. finally you will find yourself in a difficult situation. Working capital will take a beating.
You will reach a point where the client cannot be pushed to recover money in time and too much persistence will risk souring your relationship. All in all, the only loser in this entire deal is you, clients, but do not mix business and friendship. Be professional in your approach and you will succeed as a businessman.

To stay in business, the first thing to do is hire a good auditor and a hard-working, Knowledgeable accountant. Good professionals cost you money but do not hesitate to invest in these. They are the man who guides you in maximizing your wealth, planning your taxes and handling all legal aspects like income tax, services tax, TDS etc. I strongly advise all young businessman to get finance aspects right in the first year of setting up shop. It might take a lot of your effort and time, but trust me; it’s worth every bit...
Finally, I reassert that getting the money aspect of your business right is crucial for your growth. So, keep track of every rupee you spend and account for it. Maintain a simple petty cash book which will help you control your expenses. Have a financial goal for each year and create an action plan to achieve it. Happy business day!

Author's Bio: 

Rahul Kapoor is a native of the state of Rajasthan but was born in Bangalore, India. He was earlier known as Rahul Kumar K, but after the death of his grandfather, he adopt his name Kapoor as his second name.

Kapoor faced a series of challenges in his early childhood. He is the youngest of the five siblings and was the only one who could go past school education due to financial constraints. His brilliant performance in Middle School earned him a free seat in High School where he went on to become Students’ Vice President and passed with distinction. He then lost track and got into smoking, drinking and bunking and failed in is 12 standard exams and his parents cried and stopped talking to him. This inspired him to give up all bad habits and he bounced back and resolved to lead a life that his parents could be proud of.

While he was in college he was laughed at for his poor command over the English language but these insults inspired him to become a columnist with The Times of India and later on to author two books.

At 22 years of age, he was criticized and rejected as being too young to train in the corporate world but that only fueled his passion and he transformed over 150,000 lives and went on to become a guest faculty at Indian Institute of Management, Bangalore.

Kapoor has received his bachelor’s degree in Business Management from Bangalore University and his post-graduate diploma in Industrial Relations and Personnel Management from Bhavan’s Rajendra Prasad Institute of Communication & Management, Bangalore.