How a good consulting firm can make a difference to a business
- In selection of right legal entity
Every legal entity need not be a Private Limited Company. Every business owner has a different vision and there are many other criteria like
- Funding requirement
- Number of co-founders
- Amount of investment required
- Scale of business
- Uniqueness of name
- Transparency in disclosures
- Liability acceptable by promoters
- Exit from the business
- Repatriation of funds (In case of foreign shareholders)
- Taxation aspects
- Compliance burden
- Compliance cost
- Shareholding pattern
A legal entity should not be considered just as a registration certificate but an identity under which a business is built.
A good consultant would understand the business model of the entrepreneur and would suggest right form of legal entity to the entrepreneur based on the above considerations.
By a wrong selection of the legal entity an entrepreneur need to convert to another form of legal entity or need to shut down the existing legal entity which is more expensive than the set-up of the legal entity.
A proper consultation from the right consultant would always help an entrepreneur to take an informed decision about the setup of legal entity.
Non –resident entrepreneurs should also be well informed about the entry strategy through right legal entities for capital infusion, taxation aspects and repatriation of funds.
- Business plan preparation
A business plan is a comprehensive document which converts the vision into numbers and explainable format. Business plans can be for internal purpose for budgeting and keeping the organisation equipped with the required resources through out the period.
A business plan can be used for presenting to the external parties for raising funds and to demonstrate the capabilities of the organisation or for pitching for any projects.
The main reason why many businesses fail is because they donot have a proper budget of the resources or an efficient business plan. When asked why, they say, “I just didn’t know where to start.” This is where a right consultant comes in. A good consultant will partner with a business to look at all the business model and helps to build a road map to flourish in the business. Bringing a professional consultant on board can help small businesses plan for success.
- Guidance on applicable statutory registrations and compliances
Every business is different, once the legal entity comes into place it has to get itself registered under various statutes.
A proper understanding of the business model can help in various mandatory registrations under various applicable statutes. A right consulting firm can always help you in guiding on these areas to keep the company compliant with the labour laws, business specific laws and municipal and state level laws.
- Periodical maintenance of books of account and statutory compliances
A right accounting firm relies a lot on the accounting and book keeping activity for decision making. Periodical accounting by considering all the acts like Income tax act, Good & Service Tax Act , Companies Act 2013 would help in systematically complying with all the statutory compliances.
Improper accounting may lead to non-maintenance of documentary evidence, non- availability of information for the compliance , lack of audit support ,poor compliance with statutes.
- Customized MIS
Every business is different and every entrepreneur is different and the way they view the business is different. Management relies more on a proper MIS system to track their performance, resource availability, comparing budgets with actuals.
Customized MIS can help entrepreneurs understand the business and change the strategy and act dynamically. A regular MIS can give the entrepreneurs those insights which can help them to understand the pain points and act on them, also it helps to understand how the key performance indicators are effected by a decision taken by them.
- Real-time update on applicable compliances
Businesses have to comply with various provisions. The business owner cannot keep a track of all the compliances that are applicable to the business. However, timely compliance with various statues can keep the business owner relaxed. A good business consulting can help the Business owner in keeping him updated on the compliances applicable to the business and can be prepared with a timely arrangement of information to do so.
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- Safeguarding from penal provisions
Different statutes have different penal provisions, some may be restricted to monetary interest and penalty, some may extend to imprisonment or other severe punishments, many entrepreneurs would not be aware of this. Understanding of this beforehand from the consultant can help the business owner to take a decision.
- GST impact study
GST is a very young Act with a lot of changes on a continuous basis. GST impacts mostly every business that does a turnover of more than Rs 20 Lakhs per annum. It is difficult for a business owner to track each and every new amendment in the GST Act. Since the act is very dynamic, a consulting firm which keeps itself abreast with all these changes to understand the impact on the business is very much important. The large organization should have various teams to identify the changes and how advantageous can these changes be for an organization and how it would impact the finances.
- Right contacts at right time
A good consulting firm with good clientele can help in getting the right contacts and can refer right people at right time for eg a start-up may requires many services like logo designing, website designing, employee recruitment services, marketing services, shared office space, legal and other consulting services, investors or support of any other tech-based start-ups ,a consulting company can refer some of the clients who are into these services which can save time and help in identifying right people . This saves money, time and the chances of getting cheated are very less.
A good consultant not only tries to understand the business model but also can advise on some of the problem areas as he would have seen those in various businesses he has visited as a consultant.
