5 Important Decisions to Take for Running Startup

Elon Musk famously said Being an entrepreneur is like eating glass and staring into the abyss of death. Although most of us may not share such a bleak opinion, running a startup does have its challenges.

Let us look at some of the challenges you would face and the important decisions that you may have to take to overcome them:

• Dealing with variable income

  During the initial years of running a company, you are mostly likely do deal with huge variability in receiving income. This is not only with respect to fluctuations in the amount that you would be receiving but also irregularity in credit period. In simpler words, you would not only receive a different amount every month but also not receive payments in time. This becomes extremely difficult to handle especially if one has started up after leaving a job which was paying a fixed salary on a fixed date every month. As a startup founder, one will have to deal with such issues with substantial mental fortitude.

• Keep cash in hand

  A startup owner could also deal with months when there is no promise of business in the horizon. There will come a time when the tide will change, but the start-up owner will have to hold on till then. But vendor payments, salaries and rent cannot be discontinued. For such times it is imperative that the founder keeps some cash handy as back up. This cash can be used for outgoing payments till business picks up again.

• Securing future of loved ones

  For start-up founders who have one more non-working dependents, it becomes quite difficult when the chips are down. When one is working, one usually gets insurance cover for one's family and oneself from the employer. However an entrepreneur and his family does not have the protection of insurance cover unless the former buys it himself. It is important that the entrepreneur doesn't ignore his responsibility towards his family while pursuing his dreams. Purchasing a term life insurance plan like HDFC Life Click2Protect 3D Plus and a health insurance policy such as HDFC Life Click 2 Protect Health ensures that one's family's interests are protected in spite of whatever the future holds.

• Create a budget and stick to it

  As income might be regular when starting off, it is a good idea to create a budget to account for household and other personal expenses. One may also wish to create an emergency fund. This helps the entrepreneur to be mentally in a good place as there wouldn't be any unforeseen instances where money is suddenly required.

• Seek tax benefits

  Every penny that an entrepreneur can save is worth the effort. Under section 80D of the income tax act, the health insurance premium can be deducted from the taxable income. Therefore you end up paying less taxes. If you are paying health insurance for your dependents, you can also claim tax deduction on the same. Deduction allowed for individuals under the age of 60 is Rs 25,000 and for individuals above the age of 60 is Rs 50,000.

Taking these important decisions will help you focus a lot more on your fledgling startup and take it to new heights.

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