Written by : AK Agrawal

An experiences Chartered Accountant and Techno-Functional consultant working in industry for over 10 years dealing with multinational corporate clients. He is loves reading latest trend of technology trend.

How To Carefully Foresee Revenue and Growth of Start-ups in India?

AK Agrawal
AK Agrawal, Chartered Accountant

May 26, 2021 10:43

Most entrepreneurs would concur that the startup ecosystem in India is making headway to foster many world-class business entities in recent years. Many of these Indian startup ventures will reign the global scene in the coming times. The fact that the startup ecosystem in India ranks as the third-largest startup ecosystem worldwide clearly portrays the above aspect. The fast-paced growth of startups in India is attributable to many factors. The India startup ecosystem is finding immense support from the country's government with many incentives for newly incubated ventures. Looking at the prospects of the startup ecosystem in India, many international investors are willing to bank upon such businesses. The Indian government considers startups in India as entities with an annual turnover below the threshold of Rs. 250 million, and these entities have been in existence for less than seven years.

The journey towards the growth of startups in India or any country per se involves methodical and extensive planning and forecasting. The ambitious team behind every startup business wants to leave no stones unturned to achieve the desired revenue figures and growth percentages. One of the focal pointers is to make accurate revenue and growth estimations for their business operations as a new entrepreneur. Concluding on precise financial forecasts can seem like an arduous task for most startup owners. To sustain the growth of startups in India, the country's entrepreneurs need to realize the relevance of proper financial planning.

Making estimations for revenue and growth of your entity with the highest possible degree of accuracy requires proper facilitation from financial veterans. To support the movement for the progress of startups in India, the proficient team at Gotaxfile has come up with some salient tips. These tested pieces of advice will enable upright forecasts of revenue and growth of startups in India.

Be prudent to count your outlays before your revenue stream.

All startup entrepreneurs want to better the prospects of growth of startups in India and duly predict their financial standing. Hence, they need to know about the realization that it is ideal first to put emphasis on the expected expenses. We are fairly able to gauge better the total expenditures which will possibly incur than the future sales we will generate in our business.
Categorizing your expenses in line with the accounting principles is one of the best ways to find out about your future spending.

Depending on your nature and scale of business, the expenses might vary. However, the categorisation is more or less similar. Commonly, we categorise the expenses into variable costs and fixed costs. A proper judgment about these expense criteria will help you perceive the obligations you will have to undertake and the intensity of these possible payments.

A variable cost is referred to as the expense that is directly correlated to your level of operations or output. For example, the raw material, wages of daily labourers, and taxes come under the head of variable costs. On the flip side, fixed cost is a term used to refer to costs that remain unchanged for a given period irrespective of the level of operations in your business enterprise. This cost category comprises expenses such as interest on loans, rental charges, employees' salaries, accounting or legal fees. Once you systematize your possible expenses, it is important to consider some pragmatic suggestions while accounting for the amount of expenses. Always keep the value of outlays more than you might actually spend.

For instance, the cost of registrations and legal fees should be preferably considered three times than what you predict. Also, keep a sizeable sum for allocation towards marketing. Given you are a new venture, for the growth of startups in India or any big market, the promotional spendings shall be on the higher side. Indian business owners with thorough expense analysis and estimations can enhance their financial planning and utilize the plus points of the startup ecosystem in India.

Make your income calculations after considering different premisses.

In accounting, the principle of prudence is quite ingrained in our brains. However, your projections for your expected turnover should not always be made using a purely conservative approach. It will help if you make estimations made using relevant assumptions for the future.
You can consider the expert opinions related to the growth of startups in India in the near times and the overall economic situation.

There can be one optimistic and one slight pessimistic calculation, which you can make use of to evaluate your ultimate financial standing. Looking at the present startup ecosystem in India, there is a likelihood of highly positive growth for most ventures.

Ensure you have the right insights with the help of key financial ratios

The owners who are looking to get even better insights related to the growth of startups in India which they are operating can employ the medium of financial ratios. The financial ratios can help you in a better prediction and strategy-making process. You can make use of different ratios that fall under the categories of solvency, profitability, activity, liquidity. The prominent ratios will help you gain a broader perspective about your various operational aspects such as sales, gross or net margin, debtors, creditors, and inventory.

Leverage the Potency of the Startup Ecosystem in India to Surge Further!

With the above tips, the entrepreneurs in India can take their startup ambitions to the next level and make the most out of the booming startup ecosystem in India. The potential for the growth of startups in India is vast. The 21 startup India ventures which have made it to the Unicorn Club with valuations exceeding $70 billion are a testimony to this growth potential.

To notch up the growth of startups in India, Gotaxfile comes with ace financial assistance.

Gotaxfile is a leading financial guide for many businesses who need dependable support to succeed in the realm of finance, accounting, and taxation. We even offer reliable advisory and compliance services for your diverse registration needs. Our firm is the one-stop destination for your complete financial and legal requisites. We even offer special service schemes for startup businesses at pocket-friendly rates. Contact our team today and kickstart your startup journey!

AK Agrawal
AK Agrawal, Chartered Accountant

May 26, 2021 10:43

Need some Help?

We know trying a new service can be scary, that's why we want to make this 100% risk-free for you and your company

Order Now Ask Tax Mentor

GoTaxfile is trading name operated by TaxTrolley Fintech Pvt. Ltd. in India. Learn more about org. under terms & privacy policy.
India Co. Reg. 132121 / UK Co. 10827411
UK GDPR ICO Registration ZA787002, India GSTIN 09AAHCT9946J1ZI