Quitting Job & starting Venture or Business? Get your Startup Plan first

Why some of you are destined to be entrepreneurs? Why do you wish to quit job and start your own business? We come with solution through Startup Plan. The common apprehensions are:-

1. Unexpected overload of work that drags them to frustration
2. Income growth not at  par with inflation
3. No/less job security
4. Those who stay aboard alone from family
5. Competent to run his/her own professional/business activities
6. Doesn’t want to retire even after retirement from employment
7. To safeguard self respect
8. Financial independence
9. To get rid of homogeneous work & find out new ways to stimulate his/her mind by fulfilling aspirations
10. Diversification of employment/business/trade etc for second source of income
11. Those who’re obsessed to be an entrepreneur

It’s a necessity to make your family members aware of the step your are intending to take by sharing the startup plan and consequences for the same

“Few issues which you realize want to show now. Love with conviction what you realize and act ceaselessly.”  – Uttam Kumar Sen

In many cases while someone has no control of his present and future, he generally rushes to an astrologer. This is a debatable issue whether it works or not! But right choice with right direction doesn’t go in vain if you’re obsessed to do so.

A Financial Adviser is not an Astrologer. While he writes plan for his clients, they can easily understand his past, present & future. It becomes a Financial Map. The clients take literate steps as per Financial Plan. It’s like a path on which he can walk in order to cross over the financial disasters/uncertainties, both known and unknown. Thus he achieves his ultimate financial goals with periodical reviews.

Practical case-study where my client opted for Startup Plan before quitting job & starting his new venture

One of my NRI clients Mr. Rishav Chatterjee (45) works in IT sector (name changed) since last 18 years. He pursued his B. Sc in Chemistry & M. Tech. from University of Calcutta.  Mr. Chatterjee stays with his parents. Father is 82 and mother is 73. Wife Mrs. Srabanti Chatterjee (38), Govt. School teacher, daughter is Koyel (10) is a student. Mr. Chatterjee has been staying abroad alone without family since a long. Being a responsible person in his family he has been planning to come back to India for last 2 years. No one could give answers to his unanswered questions. Whether his decision about leaving job and starting own business was a wise decision or not! But who’ll answer his unanswered questions? His relatives or friends or colleagues? No one could realize his situation & dispirited him. Everybody was judgmental with fixed opinion. They were not masterminded.

Startup Plan held the answers for him. He became dismissal and was searching for a professional to quench his thirst.  He went into the depth of his mind and tried to resolve his issues. Desperately he wanted to quit his job and start his own business. As a Financial Planner, I raised few questions.

Some of the questions were common & some were unique

1. What is motivating you to quit job and move on with your startup idea?
2. If he starts his own set-up in India, by leaving his job from IT sector, would it be one astute deal?
3. What should be his ideal sectors for startup in India as per subjective profile?
4. Can his family members adjust with the income volatility? Although as Planner, I’ll try to reduce the volatility by passive income.
5. What would be the total startup expenses?
6. What kind of office setup is required initially?
7. How many staffs  to be recruited necessarily?
8. How to be dealt with Contingency fund?
9. Who will look after Research & development part?
10.  What are the factors while calculating Legal expenses?
11. How much Insurance is required?
12. How to determine  monthly budget?
13. What would be the personal expenses?
14. What should be the Startup year?
15. Till when income is not expected from startup business (in months/year)?
16. What should be the funding amount as per requirements and what can be the sources?
17. How other objectives & existing commitments like retirement, daughter’s education & marriage to be taken into consideration?

There can be several other set of questions depending on the scenario.

He has been keeping all records religiously since 2007. His records amazed me to a great extent. I have never met a person like him who routinely maintained Excel Sheets since 2007.  Very recently he came to India to attend one of his relative’s marriages. He got my contact number and called me for an appointment. He engaged me as his Financial Planner.  During the process of Financial Planning the couple shared their valuable unique inputs. The marathon data gathering meetings lasted almost 10 to 12 hours, subdivided to two parts.

His primary objectives were:

1. He wants to stay with his family.
2. Financial independence &
3. He doesn’t want to retire from his work. He wants to work as long as can. His current employer will not allow doing so.

I was amazed to observe his approach and requested to share his ideas regarding  why most of the entrepreneurial ventures fail. He shared his views quite firmly. His views in a nut shell were:

1. Lack of planning, implementation & review.
2. Expect profit from day one.
3. Lack of contingency fund, etc.

Yes it’s correct. Your self discipline will be of much importance. You need a Financial Plan and then implement the plan with periodical reviews.

Following were the scope of work for him:

1. Daughter’s pre-graduation
2. Graduation
3. Post graduation
4. Marriage
5. Own retirement planning
6. Startup provision
7. Alternative retirement planning
8. Corpus utilization
9. Cash flow (budget)
10. Net worth
11. Contingency planning
12. Insurance analysis & planning
13. Investment planning & wealth management
14. Estate planning parents & self
15. Review of existing insurance & investment & corrective measures
16. Goal funding and asset mapping
17. Own additional flat
18. Financial ratio analysis
19. Risk profile of couple, etc.

Consult a professional for better cash flow management

A Financial Plan is a comprehensive evaluation of individual’s current cash flow (budget) & future cash flow, net worth, future aspirations/goals, goal funding map, insurance planning, retirement planning, planning for children, planning for house/flat, car, debt planning, tax & estate planning, ratio analysis, risk profile, analyzing of existing investments and necessary action etc. The reason we promote Financial Plan is because one can understand the financial road map (present & future).

While you want to prepone your retirement to start your own business/profession, that means you’re leaving your job by choice. But simultaneously you need “financial independence” while you engage yourself in your own setup.

To buy yourself the freedom to retire early and to start own venture, you have to adopt the right mind-set. Financial Plan as early as possible in your career.

Early retirement than conventional retirement and that too for startup is also a research oriented work for a Financial Planner.  The main hurdle is that although there’ll be no regular paycheck, there’ll be regular fixed and variable expenses.  A Planner considers the merits and demerits of early retirement. He keeps the emotion behind & puts it logically. Very subtle issues are counted like emotional, financial, family, social & health etc.  He has to accept the challenges.

Who is planning for own startup, they need passive income for the initial phase. Startup companies’ expenses gravitate to exceed their revenues in the initial phase.

Mindset matters in your journey towards financial wellness

A starter should consider with such a conviction as if he has burnt the bridge and can’t go back. It’s better to remember the unique twists while you pre-pone retirement and start own setup. It is all about time. There’s less time to build wealth and more time to enjoy it as you don’t know when you can meet the break even. If your vision and mission is clear, then plan accordingly and turn the impossible things favorably.