Being part of a startup doesn’t just consume a great deal of time, it also brings out an intense, sometimes hyper-narrow focus on your products and services. Your attention is honed into specific tasks, whether part of the product crew or sales team. And it’s double the work if you’re a founder — you have to consider the bigger picture while zooming in on the smallest of details.
Having to manage this split in focus — and add to the equation a passion and energy that is often found in members of the mad world of startups — can lead to a lack of attention in certain aspects of running a business.
Sharing her familiarity with the situation, Namita Sethi, Managing Partner of accounting firm Futurebooks notes that many of the firm’s startup clients often fit a profile — highly creative with little experience in legal framework or bookkeeping.
In trying to focus on the sexier areas of customer acquisition or tweaking their business models, the seemingly un-sexy arena of accounting can quickly turn into a critical blind spot.
“We realised that people in the startup industry… can be very scared of accountants, processes and deadlines. We don’t scare them off because we understand the psychology behind it,” begins Sethi.
To better explain the process, Sethi and Futurebooks Co-founder George Mathew will be conducting a workshop at the upcoming Echelon Asia Summit on ‘Management and Investor Reporting Done Simple And Right’.
Echelon Asia Summit will be held in Singapore on June 23-24.
The 3 Cs — community and the collaborative cycle
In addressing the psyche and diversity of the startup world, Futurebooks’ products and services are customised and catered to each client, which starts off with a casual, pressure-less chat.
“Our process is very simple; we don’t sell them what’s available on the shelf, we start with a very basic chit-chat. We ask…What do you want? What do you want to achieve from this business you are planning to set up? And then we try to align ourselves,” outlines Sethi.
Some of the services the firm offers, include areas like tax structuring, obtaining work visas, accounting, payroll, annual regulatory filings, as well as legal advice on startup-centric services like funding rounds, mergers and acquisitions. In providing these services, Futurebooks leverages cloud tools such as Xero and Spotlight Reporting.
A big part of the team’s process also includes the culture of a collaborative cycle with Futurebooks, its clients, its competitors and the community. The firm publishes relevant and insightful accounting and legal content on its social media channels for free consumption.
“Because we were a startup, and the best way to give back to the community would be to create these articles,” Sethi says.
The collaborative cycle also means referring the firm’s clients to other firms or lawyers outside the company that Futurebooks thinks would be a better fit for the client.
Mathew describes referring clients to well-known tech lawyer Lee Bagshaw for detailed insights to their investment round structuring.
Sethi adds that even coming across firms who offer similar services and target the same clientele, referring clients to them is part of the company’s culture.
“If they (external firm) feel they are limited in servicing their client, we’re more than happy to help. Likewise, there are two or three services we don’t provide, and we’d be happy to refer our clients to them,” says Sethi.
Has this worked out in Futurebooks’ favour?
Very much so, according to the firm. While the internal revenue and company valuation has not been disclosed, the firm shares that it has served over 550 companies, with a combined valuation crossing US$1.63 billion, including companies such as Luxola, Smove, and Innovation X by The Coca-Cola Company.
Another result from the collaborative cycle, Sethi also shares, is higher rates of social media traffic generated by the free content, as well as previous and current clients referring other potential customers to the firm. She goes on to say that clients referred to external firms often come back to work and consult with Futurebooks.
While the team has close to 13 members, Mathew adds that the rate of employee per turnover is three times the average rate for most companies.
A small firm in a big ocean
Mathew recognised that risk in launching Futurebooks in 2010, a time where the market was still on the underdeveloped and underfunded side. But Mathew and Co-founder Anthony Coundouris noticed a trend developing, ready to be capitalised on.
“We saw this wave happening, of startups in Singapore and we said, ‘we’re not going to wait until the wave reaches crescendo — we’re going to start riding it’,” says Mathew.
A small accounting firm like Futurebooks in a finance and tech hub such as Singapore could run the risk of not only drowning in a sea of similar firms, but also crashing upon the rocks of the Big Four accounting firms in the industry — PWC, Ernst & Young, KPMG and Deloitte.
Mathew does acknowledge that the Big Four are only now making the effort to tap into the market — armed with deep pockets and resources, they’ll get there very fast. But the foresight to pick the startup industry, resulted in a good three to four years headstart for Futurebooks in the presently booming startup scene.
“We chose to service startups partly because we love the energy and the scene, but also because we had to differentiate ourselves as a firm. You don’t just come into an industry with a lot of incumbents and then be another player. So, for us, startups were great because it was an entry point,” Mathew says.
Because of Futurebooks’ success with startups, Mathew also notes that their clientele has also shifted to bigger, more established companies overseas, who are branching out in Asia.
“The serendipity is that a lot of established firms, especially, when they’re starting say a branch office in Singapore or their subsidiary with a firm, like to deal with a smaller, more intimate firm,” says Mathew.
What’s next for Futurebooks?
With the idea of a collaborative cycle infused into company culture, Mathew feels that keeping up with the competition is important in improving the firm overall, as well as a boon to the industry and its customers as a whole.
“You become good at your market when you’ve got someone competing with you directly. It just keeps you on your toes. Naturally there’s some sharing of best practices. I look at them and go, that’s such a good idea, I think I’ll do that too because it’s good for my customer. And he’s probably doing the same. If you look at it from a broader perspective, it’s two companies working on the same problem. So for the client, it’s really nice,” says Mathew.
The local landscape aside, Futurebooks is gearing up for some big things, perhaps on a regional scale. Mathew shares that the firm is pushing hard to keep its edge, which includes switching roles internally.
With Sethi taking up the mantle of Managing Partner recently and Mathew’s shift towards a more backseat role, could this indicate a move to expand into other countries?
Mathew elaborates, “That’s part of a larger game plan we’re implementing, which certainly involves having a professional board. Because we do see scope to replicate this model in other emerging countries.”
He concludes that Futurebooks is looking to hit it hard in terms of capitalising better and in ‘becoming a bigger monster’.
Quick tips, from the experts themselves!
When asked what startups need to know about legal regulations and bookkeeping, Sethi and Mathew offer three crucial tips startups should look at. Entrepreneurs interested in further boosting their accounting and compliance skills can check out Futurebooks’ workshop at the upcoming Echelon Asia Summit.
- Establish a ‘Founders Agreement’, pre-incorporation. It’s important to have documentation that states if the founders are working on the startup together, the IP belongs collectively to them. As such, founders cannot break out and start their own company.
- Establish a ‘Shareholders Agreement’. This is to prevent a situation where if a founder leaves, the company’s shares leave with them.
- Plan and measure your company’s financials with elegant cloud tools such as Xero and Spotlight Forecasting.
Namita Sethi and George Mathew will be speaking at Echelon Asia Summit 2015 in a workshop on Management and Investor Reporting Done Simple And Right. Check out the agenda here!
Download the Echelon Connect app for Android or iOS and get the most out of Asia’s biggest tech conference this year. Echelon Asia Summit 2015 will be a vibrant mashup of dynamic content and exhibiting startups from all around the Asia-Pacific region. The conference is on June 23 – 24!