How to plan your finances before starting up your Business?

The key challenge for any startup entrepreneur is to stay financially stable. AK Narayan taalks about how you can effectively plan your finances before starting up.

SAMUEL.GURU, TAALK.COM: Hi guys welcome to Taalk. And today we are going to meet AK Narayanan, he is a Financial Consultant by profession, and he is a CA. He has conducted lots of camps across India and educated lot of investors and how to invest and manage their wealth. And it was a great pleasure to meet him.

Hi Narayanan.

AK NARAYANAN, FINANCIAL CONSULTANT: Hi.

SAMUEL.GURU: And so this is my question so recently I transition from salaried to a self-employee and so the problem the biggest challenge I face personally is that how to balance my financial – I mean, in terms of maintaining my family and how to without compromising my financial things with my family? So that is the biggest challenge I have now and what would be a suggestion and advice to tackle this thing?

AK NARAYAN: Hi Sam. I’m very happy to participate in today’s discussion. It is a very important point because I find a lot of youngsters are getting into start-up companies and they want to do something on their own. Now coming to your question on finances, I always feel that some backup is important before you jump into the business.

Running a business, creating wealth in a business is not easy as everyone is thinking. So before you start and for anyone to think of starting I always feel you must have some kind of emergency fund in place. But what I mean by emergency fund is at least six months of your loss salary drawn should be kept in a liquid fund as a backup before you start because the first three months or four months of your starting your new venture you may not get anything in the return so you may have to deploy your savings to make up your living that is number one.

Second would also consult your family and if your wife is going to work and also able to help you out with some kind of funding in the time when you are doing this kind of research in starting the new one. It will also come very, very handy. So my own recommendation is the past saving will come very handy and one should not jump into these kinds of start-up companies unless they have a backup of some family members in place.

I’ve seen many people doing this especially if they are living with an undivided family with their elders. So that they are — they need not pay rent they can also share some expenses with their family members. They are able to do this work much better. So you must look at those options also before we jump into these kinds of starting of the companies.

SAMUEL.GURU: So that was really helpful.

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How to plan your finances before starting up your Business?

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