Keep proper Accounting because 'Numbers' speak
Startup Chaupal Media
Keeping proper record of your expanses and revenue from the very first day is very much crucial because ‘Numbers’ speak louder than what you say.
I met one of early stage founders who has recently started his startup recently. He has started acquiring a few new customers and selling their products.
I asked him Do you keep proper record of your sales and revenue etc.? To which he laughed and said: Sir I have just started, so focusing on Sales and marketing first then I will take care of that or will hire an Accountant.
Again I asked : How are you receiving money from your customers? He answered I receive as per his wish, cash/Paytm/Online etc.This reminded me of another major mistake which Early stage founders are making unknowingly.
Once I met one of mature Founders in an Event who was working since last three years and was claiming to have revenue of 50 – 60 Lakhs. I was really happy to see his confidence and the numbers as well.
He also complained that Investors only talk but don’t invest. To which I said If everything’s the same as you are saying then nobody can stop you raising funds. You meet me sometime at my office.
After a week or so he came to my office to discuss and to my surprise I saw that He is working since last three years but he has records of only last 6 months only that too not organised at all. Most of the amount he has received from customers was in cash and also unaccounted so bank statement was also not justifiable.
Then, I told him the reason why he didn’t get funded so far and also will not get funded in the near future. Because in Business ‘Numbers’ speak louder than what you say and you are lacking with the same only. He is still struggling.
Founders need to understand if your startup is not getting funded or people are questioning please take responsibility and work on it. If you keep complaining it will not help. The day you start operations please start keeping records of all your expenses and sales (if any). You can initially use excel sheet only. It will have a great impact on your valuation and this is the major factor which affects Investors decision.
Good Luck to All!