Aspects the first time entrepreneurs must address right in the beginning

Aspects the first time entrepreneurs must address right in the beginning

You have come up with this brilliant idea, know it will add value to your target segment and have even had the gumption to start your own venture. Something you had always wanted to do. Then you are faced with several issues that you need to take care of. Things you hadn’t even remotely thought about
“From an entrepreneurship perspective some of these are essential safe guards that must be taken. Yet we tend to try and circumvent it or DIY it to cut costs,” says Kalyan C Kankala, CEO, serial entrepreneur and CEO of IP Banana. “From my previous experiences I would strongly recommend taking certain steps to stem issues before they become problems at a later date.”
TechGig talked to several successful CEOs of SMEs and investment consultants to come up with a few key steps that budding entrepreneurs must address from the word go.
Hiring a corporate lawyer:
“Entrepreneurs often try to get around this with an eye to cut cost,” says Ramesh Brindagiri, legal adviser specialising in corporate law. “If you are planning to launch the next big thing and are looking for funds from a funding agency, may even list the company later on. Then, isn’t it better to start `right’ from the word go. Yes, it is expensive but in the long term it is worth the money because all external agencies you come in touch with, from angels to VCs, look into the legal aspects before putting in money. A perception of professionalism will actually add value to your company.”
Forming a legal operating entity:
“Forming a legal operating entity, earlier on, provides not only access to tax advantages, but also addresses issues that may spring up once you have made it and the company is a decade old success,” says Sanjay Chugh, CA and Tax Consultant at SV Business Services. “Without early formation of these entities, you have only general agreement documents which are open to disagreements about ownership on technology and company at a later time. The number of companies which have split and subsequently fallen by the way, primarily due to this aspect, are way too many to even record.”
There is also another side to this.
“Earlier, startups were founded by people who shared a similar view of the new idea. Today, in their eagerness to become entrepreneurs, friends with different interests and skills are joining hands to form the core team. A big problem,” says Anjana Vivek, founder-director VentureBean Consulting Private Limited. “The chances of such an enterprise floundering or splitting are much higher. In such circumstances, it is always good to rely on a formal legal operating entity clearly mentioning accountability of each tool and code.”
The product/services is not the company
“In an urge to be funded, budding entrepreneurs start believing that the only thing of value is the service provided or the product they develop. In fact, the true value is much more multi-faceted. Value of the company is the value you bring to the customers, the range or number of customers it affects positively, your employee-skill levels and the customer-employee satisfaction quotient,” says Rajasekhar Dandapani, former director, commercial loans, SBI. “This is an all-comprehensive value that is evaluated and should be suitably developed.”
“Entrepreneurship is a long haul, even for serial entrepreneurs like me,” says Kankala. “For this one needs to consider who-all and at what stage you need to make the sailing smooth. You cannot do it alone and at the same you cannot be hands-off too much either. It is all about balancing the passion-funding-innovation with practical aspects and uncompromising commitment to values at all levels that make it for an entrepreneur in the business space. “

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Kanchana Dwarakanath is an integrated communications professional with diverse experience in journalism & Marketing Communications. Her current focus areas include real estate, infrastructure, urban management and the skill development market. 

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