Financial Plan & Strategy
What are the various Assets and Liabilities with regards to our business venture?
Our company would create assets both living and non-living with the passage of operations. Living resources include staff that is trained to carry on day to day business. Their precise grooming would help the company to flourish. Non-living resources or assets would include machines, infrastructures, offices, software and hardware which our company creates during the course of operation. Liabilities would include rents, salaries, taxes, funds, stake etc. Our company would try to balance all the financial related things in order to carry out business smoothly.
What are the financial KPIs that we track for our business venture currently?
Our company shall use all the KPI's after proper research and surveys . From a startup perspective they are gonna play a major role. Currently we are taking care of: gmv v/s revenue, Monthly burn, gross profit, life-time value, customer acquisition cost, monthly burn, average revenue per user, conversion rate, Cohort analysis.
Factors we think will impact the level of working capital for our business venture?
One big factor that can impact our working capital is production cycle or the time lag. Our business is such where the cycle of returns is slightly large. We are not really into production but services. Our business is based on volume game. The more services and agents we get in small time will ease the burden on our working capital. Our working capital is also affected by the conditions prevailing out here. Hartals, strikes and internet bans also do effect our working capital in many ways. We are devising ways to handle working capital effectively.
Operating cycle for our business venture.
The operating cycle of our business is slightly longer than the actual retail business. We deal in services and online platform. We need to identify and equip our front end agents first, need to provide them knowledge and necessary material to support their business. Operating cycle comprises of: identify service>develop service>identify location> identify an agent>train agent>on boarding> support> sales for the completion of all these steps we need to take care of all sorts of documentation and legal aspects.
What is our strategy for managing our business's short-term fund requirements?
1.Efficient operating cycle- to reduce the timing of operating cycle.
2. Long term borrowed funds
3. Short term bank borrowings
4. Advance payment from agents
5. Management of receivables
6. Better inventory management
7. Judicious use of capital
8. To look for an Angel Investor and venture capitalists
Some key terms we discussed and agreed upon with the vendors of our business?
Necessary fee costs and expenses, payment terms, applicability of taxes, scope of services, termination financial covenants
Various operating (OPEX) and capital (CAPEX) expenditures we made during the starting phase of our business venture?
4. Office expenses including utility bills, Internet charges etc
5. Website hosting charges
6. Service development charges
1.Office infrastructure and Machines
Sources that we have looked after or would be looking into for raising funds for our business venture? And why?
As our is a limited company, we are primarily banking on investment from potential stake holders and the focus in the initial phase would be on family and friends. We are also looking for the funding from central/state government schemes, angel investors etc. As a start up it is at times very difficult to exactly get the returns as have been planned and expected. We do not want to take any lethal risk by acquiring heavy debt from financial institutions. Incubators are also a good opportunity to set the ball rolling.
Major cost elements for our business venture? Fixed, Variable and Semi-Variable.
Variable costs: Aggregation and Development of new services
Fixed cost: Rent, Electricity bills, Houskeeping
Semi-variable costs: Salaries, Office expenses, Admin expenses.