While growth and sales are important to a startup’s success, don’t lose sight of the basics, like accounting, cash flow and budgeting
The allure of startups is hard to resist, what with the many stories of success that almost seem to have happened overnight. Yet behind a successful startup are other stories: stories of long nights, missteps, and a lot of hard work.
Nadhir Ashafiq knows all about the challenges of getting a startup going. His startup, TheLorry, is now two years old. It specialises in on-demand cargo transportation services, allowing customers to book vehicles to move anything from small, household items to commercial cargo.
Also Read: Malaysia’s TheLorry raises US$1.5M Series A
Asked what he would have done differently in the beginning, Nadhir said, “I would have told myself, from day one, not to forget about keeping track of company financials.”
Though the company’s track record and potential has led to success in raising additional funding, Nadhir says that in hindsight he shouldn’t have placed all his focus on just growth and sales.
“I ended up neglecting my books,” he said, saying that if he knew then what he knows now, he would have paid more attention to the company’s financial fundamentals – keeping accurate records, managing cashflow and proper budgeting.
“Looking back, I should have devoted more time to strategise the company’s finances instead of just chasing targets and projected sales,” Nadhir said. If he had done so in the beginning, he estimates it would have saved him a lot of stress and worry down the line.
The company now has a financial controller in its employ, whose role, Nadhir says, is partly to tell him to be more discerning in spending instead of just aggressively spending.
“My mentors told me from the start: know your numbers,” he said. “I would say the same to any new startup co-founder. Know how much you have, spend it wisely, and don’t just expect funding to just fall out of the sky.”
Rather than be ignorant about their actual financial position, startup co-founders need to be aware, and with that knowledge, they can then make more informed decisions.
While TheLorry is in a good position now, Nadhir says he isn’t taking his current position for granted. With what he has learned from his past oversights, he hopes to keep building a strong foundation for the company moving forward.
“Sometimes, it’s just about getting the basics right,” he said. Neglecting those basics could sink your startup before it even truly gets off the ground, a fate startups could avoid if they just took the time, says Nadhir, to be more pragmatic about their financial situation and practice fiscal prudence.
“I’m glad I just learned sooner than later,” TheLorry co-founder opines. The best lessons after all, are the ones you put to use, and Nadhir is determined not to let the ones he learned go to waste in making TheLorry a success.
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