As an Entrepreneur, why it is important to have your personal finances in order

Learn from the entrepreneurial journey of Kiran Mazumdar-Shaw about how, to become a successful business owner, you must have your finances in order.


Kiran Mazumdar-Shaw, aged 68, has been described as India’s richest self-made independent and successful woman entrepreneur now. She is ranked at 68 in Forbes’ List of 100 Most Powerful Women in the world. Founder-Chairperson and Managing Director of Bengaluru-based Biocon Limited, India’s largest-listed biopharmaceutical firm by revenue, Kiran is the leading provider for bio-pharmaceutical needs in Asia. She is the pioneer of the biotech industry in India.

Though she has established herself as a successful woman entrepreneur, she admits she is an accidental entrepreneur. She has been into the pharmaceutical business for over four decades. She wanted to become a doctor but could not get into medical school. She studied in Bangalore University and Melbourne University (Australia). Her Biocon’s real time networth stands at $4.1 billion.

Kiran is on the board of governors of the Indian School of Business, Hyderabad, and a former member of the board of governors of the Indian Institute of Technology (IIT), also in Hyderabad. She became the first woman to head the board of governors of the Indian Institute of Management, Bengaluru.

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To become a successful business owner, you must have your finances in order.

The importance of having finances in order

Kiran suggests several important steps for women to have their finances in order.

  • First of all, a woman can apply for a personal loan.
  • Second, she should always innovate herself. It’s best for her to do some reasonable research and development.
  • Then hard work is most important if a woman wants to be a successful entrepreneur.

Kiran is bold, courageous and confident. She is known as a powerful and strong woman in the business fraternity. She made sure that everything she ever dreamt of came true for her. This was possible because she believed in herself.

However, if you are an entrepreneur, especially if you are a woman, it’s important to keep your finances and money matters systematic. Nobody can doubt that being a successful entrepreneur requires a lot of expertise in a lot of different areas. To become a successful business owner, you must have your finances in order. After all, if you have no money, you’ve got no business!

From a one-employee company to first in India to issue an IPO

As a beginner, Kiran started her company in a garage with one employee. She was determined to get success in her new venture. As an ordinary, common woman, she faced bias. Thanks to her tireless hard work, today she is a highly respected lady in her business circle: a billionaire with companies established globally.

Biocon became the first biotech company in India to issue an IPO, which was oversubscribed 33 times. Kiran believes in women leading businesses from the front. She is a firm believer in woman power, and always believed that women can take the lead.

Kiran believes in women’s safety in their workplaces. And she has taken necessary steps in that direction to have a safe and peaceful environment for her team, especially for women, in her company.

Biocon- The first Biotech Company to issue an IPO

The Challenge of First Financial Loan

While she is recognised as a successful business woman entrepreneur, she recalls her time when she had to apply for a loan from the Karnataka State Financial Corporation (KSFC) in 1978. It was her first financial loan from this company. There were no schemes or policies for women in those days.

It wasn’t easy then. But, thanks to the government, now there are many policies and options for getting loans, especially for women. There are a number of banks along with self-help groups who help women to get loans. Working capital loans and other business loans are necessary for funding. These days, various commercial and government banks offer loans to women at affordable interest rates and loan repayment tenures.

If you are planning to start a business, make sure you have done your research well about the banks you wish to approach for a loan. Once you pick the bank, look for the interest rate and loan repayment tenure that suits your budget.

How to plan your personal finances?

Always Innovate

Innovation is one of the most essential elements to pursue when it comes to establishing a financially well-kept business. Kiran once said that she really believes that innovation helps you to lead. As an entrepreneur, it is important to keep up with innovation so that you can attract investment. She says that one of the most important lessons she has learnt is that business is about being emotionally driven about investing, but being emotionally detached when it comes to divesting.

It helps add efficiency and reduce costs. It also brings in opportunities to develop new products and services to help you survive and thrive in competitive markets. She says that Biocon has been able to reach where it has today because of constant research and development.

Fight Criticism and Work Hard

If you want your business to grow in numbers and wealth, work hard toward growth. Kiran once said that at Biocon, everyone believes in working hard.  Hard work helped Biocon become a billion-dollar firm, which began with an initial investment of just Rs 10,000!

Hard work is the only way toward development and growth. Kiran believes in fighting criticism if financial success is the goal. Being bold and dynamic, Kiran does not pay much attention to her critics. She feels women are strong enough to handle financial responsibilities of their business.

Being a woman and starting your own business is not an easy job. Establishing your own company is itself very hard. There was a time, people criticized Kiran but she ignored them and focused on her job just to fulfil her dream. She had belief in herself, self-confidence and determination. These helped her get to the top.

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Innovation is one of the most essential elements to pursue when it comes to establishing a financially well-kept business.

Keep yourself financially safe

Being in business itself is sometimes risky. Your entrepreneurial venture has a greater chance of failing then succeeding. By diversifying and placing funds into another side business will help you to get more success. And by keeping and setting aside cash, you will give yourself breathing room in the event that you have to call it quits or need to pivot to another business.

It’s hard fact that many business entrepreneurs have to deal with a lot of struggle with irregular money problems. Therefore, it’s important to budget your personal finances to make sure that you have savings so that in an emergency you can withdraw from your bank to cover your expenses, such as insurance, house-rent and other essentials.

Plan for your future

Don’t forget you should still be saving for your retirement. Even on a fluctuating income you should aim for a small bit of savings each month.

Keep business funds separate from personal funds

Says Peter Anderson in his Bible Money Matters: Being an entrepreneur, starting your own business, it can be a good idea to keep your personal finances and business finances separate. Not only will it give your business more credibility and a sense of legitimacy, but in some cases it may also help reduce your personal liability if something negative were to happen down the road. It will also help you to be organized when it comes to paying your taxes, managing your bills and other payments.”

It’s simple but vital: Keep business and personal accounts separate and document profit distributions to yourself. As a one-person business, I didn’t set up separate accounts soon enough. The CEO of a 10 or 100-employee business wouldn’t use corporate accounts as his own; why would somebody running a company of one or five?

Not only do separate accounts make tax-time easier, they’re essential if you want to sell your business or you face litigation or bankruptcy. In the worst case, intermingling personal and business accounts may negate the protections offered by your business structure.” – David Weliver, Publisher, MoneyUnder30.com

Keep your expenses below your income

Never forget that expenses rise to meet income. This is the gist of Parkinson’s law. This is the reason that a couple months after most people get a raise, it feels just as tight financially as it did before the raise.

Without an intentional effort, houses, desks, kitchen sinks naturally get messy and cluttered. We have to take action on purpose to keep things clean and organized. Since you probably have a budget for your small business, make sure one is in place for your personal finances as well. It can be easy to let managing your own money fall through the cracks while trying to grow and expand your endeavour.

As an entrepreneur, one should have automatic bill payments online. It saves time, energy and money. And one can focus on more work. There are specific apps. Once you download, it’s easier for you to pay your bills without any hassles. It will reduce your travel time as well.

Keeping Personal finances and Business Finances separate benefits a Entrepreneur

Protect your most valuable asset

Many entrepreneurs overlook their need for disability insurance even though their ability to earn an income is their most valuable asset. If you will not earn, how will you survive? Or, they live without your income. Do you have any option?

You should save maximum money for your retirement. The self-employed should consider individual saving plans, and even defined benefit plans. These alternatives enable entrepreneurs to save significantly more for retirement in tax-sheltered accounts.

Seek out professional tax advice

Spend some time and money on getting professional tax advice from someone who works with small businesses and entrepreneurs. There are many tax-savings to be had if you know what to look for. On the flip side, you can get yourself into trouble very quickly if you don’t know what you are doing. Critical areas to look out for include reporting income and expenses, home office deductions, having employees versus contractors. Says Ryan Guina in Cash Money Life: “It’s money well spent, and will often pay for itself.”

Negotiate everything!

When it comes to business, as noted author Steve Chou advises, make sure you negotiate everything. Contact your credit card processors, your suppliers. Contact everyone and negotiate your terms on a regular basis. Every day, our business is constantly bombarded with new vendors offering their services at competitive rates. Make sure you strike a conversation, and put your existing vendors against the new ones. And you can save tens of thousands of rupees.

As experts say, success is all about striking a balance with your finances.

Santosh Mehta
Santosh Mehta
Santosh is a business journalist with 20 years of experience. She writes on self improvement, business and health. Her stint includes The Statesman, Hindu Business Line, All India Radio and Australian TV Channel.

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