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How to survive before your startup becomes profitable

How to survive before your startup becomes profitable

Focus on the revenue generators first

Before the big things in the company can happen, work with a platform that low upfront development costs and a business model that generates cash quickly for the time being. For example, websites are cheaper to build than brick-and-mortar stores in many cases, and an online store can start making sales much earlier.

This partly explains why India is seeing a boom in e-tailing startups like Snapdeal. Being able to show business traction, such as a proven sales record, also makes it easier to attract investors.

Bootstrapping and self-funding

Bootstrapping may not be glamorous but saving money the old-fashioned way and self-funding has worked for many entrepreneurs. A good way to start is by making a business plan and determining how much money you need to survive until revenue comes in. This will establish whether it’s a viable option.

You can also approach family members and friends first, but as this can become a sensitive issue, make sure you are borrowing money that your lenders can afford to lose, and ensure that a written agreement is in place for every personal loan.

Look towards government grants and schemes

Although it is recognized that small business financing is an issue in India, there are a number of avenues that startups can look to via the government. Bodies such as the Small Industries Development Organisation (SIDO) and the Kerala Financial Corporation (KFC) offer a range of schemes that have been endorsed by the government to assist small businesses in working capital funding, microfinancing and project-specific financial support. To know what kind of support you need, work out what’s needed to make your cash flow statement balance itself conservatively on a monthly basis before you apply to these grants and schemes.

Join an incubator

Another option is to join a startup incubator. These help entrepreneurs develop their businesses by providing support, such as with a physical workspace, coaching or technical services. Incubators can also provide venture capital.

How to survive before your startup becomes profitable



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