1. Promoter's Background: Promoters should have appropriate qualifications and requisite experience. If the promoter has studied at a foreign university and knowledge of law, etc., in the Indian context is not known to him, then another director should have that knowledge or experience.
2. Business location, head office, logistics, etc. should be managed so that cost is minimized and there is also administrative convenience.
Cost control and cost reduction should be differentiated, as cost reduction is permanent and cost control is temporary, and it can be applied in nearly all departments for profit maximization.
3. Tapping the right market at the right time to ensure adequate margins.
4. Doing business with a long-term view so that temporary ups and downs do not affect the firm in the long run and the firm leverages the long-term strategies and their product is preferred, which creates goodwill in the market.
5. The right person in the right post: It increases efficiency and lessens the cost of reworking and the money involved in repeat work if an inappropriate employee is deployed in that post.
6. In the initial stage, more emphasis is to be given to marketing campaigns, etc., so that revenue generation starts and gradually reaches a substantial and sustainable level. Accounts and finance are no doubt essential because they prepare the MIS, etc., based on which the management makes critical decisions on running the business.
7. Statutory compliance and bank loan instalments should be followed in letter and spirit because they have long-term implications like litigation, bad reputation, etc.
8. Particularly in this decade, there is scope for tremendous growth in the MSME sector; various government schemes are there for their growth. It is a challenge as well as an opportunity for these companies. If they run the company based on sound management principles and apt decision-making skills, they will surely propel themselves towards success in their sector or industry.
Company results analysis, coupled with the findings of what went wrong, leading to poor outcomes, can certainly give feedback, and the company can learn from past mistakes and take corrective actions to reach the next level.
9. The working style and attitude of the management are also major factors in determining the growth of a company. A management team that is not alert, inefficient, ineffective, lazy, and indifferent to the activities of the company is sure to be in trouble soon and will lead to huge losses and problems like liquidation, court cases, etc., which is highly undesirable.
10. Payroll Department: Apart from keeping track of whether the due salary (basic, allowances, perquisites, leave salary, gratuity, etc.) is accurately paid to the employee, it is also a legal obligation on the employer to deduct the taxes, pay them to the government, and issue Form 16 to the employees for TDS compliance, handling notices, etc. These tasks are not the core work of the business; however, they are utmost necessary because these are statutory compliances, which are nowadays crucial (as well as labor law-related compliances).
11. From an accounting angle, there should be proper internal control and checks to ensure that there is a system in place for proper recording, checking, entering vouchers in the system, and authorizing so that errors and frauds are avoided. Right from the process of purchase to sale (GRN: Goods Requisition Note, PO: Purchase Order, Invoice, Stock Entry: Stock is given importance as stock is as good as cash in respect of error or fraud), all aspects should be designed in such a manner that there is no scope for error or fraud. This ensures that resources are preserved by the company and that accounting is free from fraud and errors.
12. The accounting team should be well-trained with numbers, good at record-keeping, and knowledgeable of the latest laws and standards on accounting and taxation. Preparation of MIS on a timely basis in an easy, simple, and understandable manner is also required, which helps the management in decision-making. Example: How much money should I pay to vendors and when? How much working capital is to be maintained? Whether to expand the business? From where to acquire plants and machinery? There are many decisions taken by the management based on the MIS reports prepared by accounting personnel.
13. There is a saying, "Honesty is the Best Policy." The companies that are doing window dressing, accounting manipulation, etc. and portraying a wrong balance sheet view and gain some advantage in the short run finally end up in trouble later on.
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