Nearly all of India’s small businesses believe they could have been more successful with better financial management.
Those are among the findings revealed in a new whitepaper released today by Intuit Inc. (Nasdaq: INTU). In the study, titled “Financial Management – An Essential Tool for a Healthy Business,” 94 percent of the entrepreneurs surveyed said they could improve their financial skills.
Given that India has the second largest number of small businesses in the world – a total of 48 million – the whitepaper sheds light on the important role that financial management plays in the life cycle of a small business. The start of the new financial year is an appropriate time for small businesses in the country to take stock of their business’s financial health.
The whitepaper, prepared for Intuit India by the global research firm International Data Corporation, reveals essential data on financial management trends and practices amongst small business in India. Among the findings:
- 78 percent of small businesses are prioritizing on improving their financial management skills in the new year
- Nearly 75 percent are prioritizing investment in financial management for better visibility and control of their business
Commenting on the whitepaper findings, Nikhil Arora, Vice President and Managing Director, Intuit India
“Small businesses are at the heart of economic growth in India and are critical to boosting the country’s economic growth and job creation. The challenges they face are quite similar across regions. They face these challenges because of the inherent lack of focus on and alignment with financial management and processes.
“The whitepaper found that 33 percent of small business owners took over three years to realize that business sustainability relies on efficient financial planning. It is critical that small businesses establish the financial management processes in the first year, and fine tune by the time they hit the three-year mark. If executed well, financial management will evolve from a mere ‘support function’ to a ‘strategic advantage.’”
Today small businesses in India are evolving by incorporating technology to run their business, streamlining processes to increase efficiency and productivity. Some 85 percent of the nation’s small businesses are adopting technology for better financial management. The advent of smart phones, tablets, emails and mobile applications has opened new possibilities for small businesses. Entrepreneurs are equipping themselves with user-friendly financial management technology systems to access their finances on the go, quickly and effortlessly, for ‘hyper growth.’
How They Started
The whitepaper examined how small businesses got their start, and what they’d do differently in hindsight. At the outset, business owners tend to focus more on ideas, innovative products and unique value propositions than on financial management. The report found:
What They Would Do Differently
- 54 percent of business owners felt that the first year of operations was the most difficult because they did not invest in financial management. The majority said they eventually had to invest time understanding the financials of a larger, more complex business.
- About 85 percent said they started their business by utilizing personal savings, making financial management even trickier. This affects the way decisions are made as well as how businesses are run.
Looking back at their business evolution, small business owners highlighted what they would have preferred to do differently.
- 79 percent feel they should have been better equipped to manage company growth.
- 76 percent said they should have learned to manage and track finances better.
- 73 percent wish they had created a business plan.
- 55 percent wish they had found a mentor.
- 49 percent said they should have sought professional help.
- 43 percent said they should have hired an accountant.
All in all, almost 75 percent of small businesses understand the need to educate themselves on financial management – both from the point of view of areas of investments and the associated areas of impact. This trend is seen even among businesses that have been in existence for a few years.
Intuit has more than three decades of experience working with small businesses worldwide and has championed small businesses in India since launching its flagship financial and business management product, Intuit QuickBooks
, in 2012. The company understands the significant contribution small businesses make to the country’s economy and have been partnering with small businesses to help them succeed. This whitepaper will be valuable for the small businesses in the country to review, adopt and share.
About the Whitepaper
“Financial Management – An Essential Tool for a Healthy Business,” represents data collected via qualitative and quantitative interviews with 350 Indian small businesses. The small businesses researched have a full-time employee strength ranging from one to 99 and an annual revenue falling less than INR 60 crores.
About Intuit India
Intuit is a leading provider of business and financial management solutions for small and mid-sized businesses in the country. Intuit India, the company’s first venture in Asia Pacific, commenced operations in 2005 and currently has more than 1,000 employees across offices in Bangalore, Gurgaon, Mumbai and Jaipur. Intuit stands on the core principles of customer-driven innovation and improving the financial lives of its customers profoundly with product offerings such as Intuit QuickBooks in India. Intuit has been ranked No. 8 Best Companies to Work for in India in 2014, No. 5 in the IT industry and No. 2 in Flexibility and Work Life Balance category by the Great Place to Work Institute. For more information, please visit http://www.intuit.in/
About Intuit Inc.
. creates business and financial management solutions that simplify the business of life for small businesses, consumers and accounting professionals. Its flagship products and services include QuickBooks®
, which make it easier to manage small businesses
and payroll processing
, personal finance
, and tax preparation and filing
provides a fresh, easy and intelligent way for people to manage their money, while Demandforce®
offers marketing and communication tools for small businesses. ProSeries®
are Intuit's leading tax preparation offerings for professional accountants.
Founded in 1983, Intuit had a revenue of $4.5 billion in its fiscal year 2014. The company has approximately 8,000 employees with major offices in the United States, Canada, the United Kingdom, India and other locations.