MUMBAI: Money will always play a central character in your career, whether you are a salaried individual or run your own venture. Building a basic structure can help you plan your entrepreneurial journey better. Here are some money lessons from three entrepreneurs:

Start planning your finances early

If you manage your personal finance, the entrepreneurial ride will be smoother. “I started caring about personal finance at 28, which is way too late. Today I realise you should start thinking about finances as soon as you start earning, at least the basics such as tax saving. It makes you a better entrepreneur as well," says Aakrit Vaish, 32, Mumbai-based co-founder of Haptik, a chatbot company.

Vaish says he was so obsessed with the product side of things that he resented any time he had to spend on finance. A year after he set up his company, he raised a million dollars from Kalaari Capital. Only then did Vaish start taking professional advice on both his company and his personal finances.

For Anusha Bhushan, 30, co-founder of the Smoodies, a fruit smoothie company, personal finance planning came easier. “I’ve worked as a banker and done my MBA, so money management came easy to me," says the Bengaluru-based IIM Calcutta alumnus. She has previously worked at Deutsche Bank in London and Bain Capital in Mumbai.

Don’t invest all your money in your start-up

Vaish invested only a part of his total savings (approximately 21 lakh) in Haptik. “We decided that after a year, we should raise funding. Because if we couldn’t raise the external capital by then, there must be something fundamentally wrong with our business model," he says.

Aakrit Vaish, co-founder of Haptik, a Mumbai-based chatbot company
Aakrit Vaish, co-founder of Haptik, a Mumbai-based chatbot company (Hindustan Times)

He had worked for Deloitte Consulting in San Francisco, at mobile analytics firm Flurry and had also set up and sold Flat.to, a listings start-up for students. He dipped into savings from those years for extraordinary expenses. “Like my engagement," he says with a smile.

Sujay Bharatiya, 40, on the other hand, decided to invest his entire provident fund account ( 40 lakh) in Chicaniño Childcare, the Mumbai-based day care company he co-founded. The IIM Lucknow alumnus, who previously worked at GE Capital, said he could do that as his wife was earning and he knew their household would have a steady source of income. Today he says he would do it differently. “At the time, I thought that when investors see proof of concept in a company that was self-funded, they look on it more favourably. Today I realise that is not the case – investors don’t care whether you have bootstrapped or not, they care about the business idea."

It is also important to close your debts before venturing out on your own. Bhushan says she didn’t have the luxury of holding on to part of her savings. “I made sure I paid off my student loans by liquidating my mutual fund portfolio. Only then I decided to take the plunge and set up my own venture," she says. Around this time, her husband Varun began his own travel venture Metripping as well. “We both sat down and did a balance sheet and split the money between our start-ups," she recalls. But the couple are careful to maintain a buffer amount, a few lakhs that they keep liquid in the bank in case they have an unexpected expense.

Put your expenses on the chopping board

Vaish decided to stay single for the first year. “I am not ready to get married right now, give me a year or two," he told his then girlfriend, now wife. He says his expenses those first few years were minimal. “Life as a single person is cheap, you live with your parents. How much can you eat out? Life only gets expensive when there is a house, when there are kids and when you think about paying for your own house," he says.

Vaish, Bharatiya and Bhushan cut down drastically on leisure travel. “Our [salaried] MBA batch mates go for holidays and sometimes, we are tempted. But if you work 18 hours a day every day, where’s the time to travel?" says Bhushan. She says what worked for the couple is tracking household expenses. “We have a monthly balance sheet, a joint credit card and we monitor the outstanding amount on this, making sure we pay each bill fully," says Bhushan. When the couple argue about any expense, the one rooting for the lower amount gets to prevail, she says. “All we really spend on is rent and food," says Bhushan.

Real estate doesn’t come in the picture either. “The ultimate returns do not justify real estate. A big issue is that there is no liquidity. Besides, you are better off by investing in blue chips stocks, which will give you a 15% return," says Bharatiya, who invested in two properties but has since exited those investments. Vaish continues to live with his parents after marriage and Bhushan has no plans to buy a house as well.

You should splurge sometimes too

“I bought the more expensive Mac laptop, because I feel it helps me be more productive than a Windows laptop," says Bharatiya. But this came after much thought and research. He settled for the cheaper version – a Macair rather than the more powerful Macbook. Bhushan’s biggest extravaganza is a new phone every year. “We buy each other a phone for our birthdays," she says. “It’s okay to splurge sometimes."

“I tell entrepreneurs who come to me for advice that you should plan to have enough of a cushion with money for leisure and entertainment too. Because if you feel you have to cut down every single expense, it can really eat into your confidence."

For these entrepreneurs, like for most others, personal finance is a balancing act. Vaish, Bhushan and Bharatiya have all had to dip into their savings and have begun taking small salaries only after receiving outside funding. However, it’s all part of the game. As Bhushan says, “Feeling some financial pressure is part of the experience of being an entrepreneur. But to be able to perform your best, you have to make sure you are comfortable with your personal finances."

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