The widespread loss of stable income for many people has led them to explore entrepreneurship as a means of taking back control over their personal finances. In fact, recent evidence suggests that entrepreneurship is skyrocketing right now. However, entrepreneurship can come with its own unexpected challenges for new business owners.
Budget and risk management are among the most challenging obstacles that startups can face, and the IT sphere is no exception. When a team has little experience in the operational processes, it is wise to seek out a mentor who already has a proven understanding of the entire business landscape. Today, Rustam Gilfanov, an IT-businessman, international investor and philanthropist, shares with us his management principles for companies that are at their early stages.
Among the most common risks are a bad business model, inadequate financial planning and budget allocation. “At the early stages, companies should focus on their minimum viable product (MVP). In the beginning, long-term plans are just a waste of time; the most optimal period for planning is 3 months with a weekly readjustment to the targets. At the start, it is very important to be flexible”, says Gilfanov.
Salary is a significant expenditure item. On the MVP stage, the number of staff should not exceed 4 people. This approach will provide a clear idea about the near-term fixed costs and will help forecast expenditures. 20 years ago, IT-specialists chose a certain company based on whether a project was interesting or if it offered access to new technologies. Today, the main factor is the salary level. A slow and steady process of building human resources is preferable where you can hire staff at market rates and offer bonuses to the professionals who hold positions of critical importance to your business. Rustam Gilfanov also recommends outsourcing some of the tasks on a per-job basis; thus, you will pay for results, not for hours spent at work. As a rule, that allows optimization of your expenses.
“In my experience, you can save up to 30-50% using intangible motivation. Key programmers and team leaders are interested in solving tricky and even challenging tasks. As for material motivation schemes, there are a lot of different ways to do that, such as getting options from project profits, buying stocks or redistributing shares in the project depending on the KPI. But first of all, people should enjoy working in your startup”, says Gilfanov.
Rustam Gilfanov also recommends against using borrowed funds on the MVP development stage. You may obtain credit without risking your startup if you have already built a sales funnel.
At the start, it is better to use your own money, and when you take your business to the next level, it is better to find a venture capital investor. The main thing is that the investor should have a good understanding of the IT sphere, otherwise he could interfere with your work.
Thus, at the initial stage of your company’s development, it is recommended to use your own resources, plan for no more than 3 months ahead, have a team comprising 4 people maximum, outsource some tasks and work on intangible motivation.
Rustam Gilfanov is a co-founder of an IT-company, an IT-businessman and an international investor. He was born on January 6, 1983, in the small village of Basim, Perm Oblast to a soldier father and a teacher mother.
In 2006, together with his business partners, Rustam Gilfanov set an international outsourcing IT-company in Kyiv. Nowadays this company is the largest software developer for the gaming industry, marketing and finance services.
A few years ago, Gilfanov withdrew from the management of IT-company in order to focus on international investment in promising IT-projects in the area of financial technologies, gaming and streaming video. Besides, it is vital to Rustam Gilfanov to promote charity projects in Ukraine, the most ambitious among them are “LuckyBooks” and “Biblioteki Maybutnogo” (Libraries of the Future).
Rustam Gilfanov is married, has one daughter.
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