If you have read a lot of articles on how to start a business in india, which generally tells you how to register your company, then read this one. No jargon for legal framework only (that is important too, but at least you have to know other aspects). Moreover, you will be fulfilled at the end of this article.
We will try to make it a handy guide for how to start a business in india.
As we all know, circumstances have forced india to move toward a startup based economy. Therefore, This is the golden opportunity.
What if you have a super specific idea, for how to start and not only start, run successfully a business in india. Yes, this post will help you for this. Just go through it and take notes.
We will discuss every aspect from legal setup to running and, expanding if you have already set up a business.
Starting a business in india was never been so easy, as it is today. Better reforms, and hopefully more to come, can lead you to jump start today. It is very easy to start a business if you are willing to. You can apply for easy loans, tax rebates and many other facilities. These facilities are soothing for entrepreneurs.
we will try to discuss the every aspect of a business startup. Let’s dive in.
Why do you want to start the business?
Ask yourself, what is the motivation behind this venture in which you are going to jump. Is it money? or, do you want freedom? Or, do you want a that style life? Do you want to solve a problem? Or, is there anything else that drives you? Comment down let’s see how diversified and awesome brains out there.
See, if it is all about money, you will fail. Money should be a bi-product, means the priority should always be clear. This priority is the vision of your business.
Money is not bad. Yes! But when you focus only on profitability or money, you might fail in fulfilling the need of the consumer. That is why there is a difference in Chief Finance officer and Chief Executive officer. One works on books, and another works on vision.
Herer, comes second thing. Freedom ? Forget the freedom for at least five to ten years or may be for whole life. As Elon Musk says Entrepreneurs should be willing to work more than 40 hours a week. It is clear. You have to set it up then you can think of freedom.
Clearly, you need a solution for a problem, or a way to improving the lifestyle of people. Money will start flowing automatically. And it will buy you freedom too.
What kind of business do you want to start ?
There are several business models that are popular and generating a tons of money. Have a look on some
- Product based businesses like FMCG.
- Retail Stores Chains like Big Bazaar, Kirana King, More, Aadhar mart.
- Manufacturing businesses
- Educational and Institutional businesses
- Service based business models ( Like SaaS, Marketing agency, BPO, Testing agancies )
- Online businesses ( Like Amazon FBA, Dropshipping, E-commerce, Private Labeling)
- Third party services like Payment gateways, Tender based companies, ( This can be seen in Public Private Partnerships now a days )
- Derivative businesses ( Foods, Restaurants, Educational, Medical )
- Business to Business (B2B ) like foxconn manufactures devices for apple, blackberry, xiaomi, kindle)
- Business to customer ( Kirana and Retail outlets)
- Franchise businesses like dominos.
- Subscription based businesses like netflix, newspapers, smartphone recharges, amazon prime, YouTube in upcoming days.
- ………………………….And a lot more and countless models.
You can notice some business are innovation based and some are just derivatives. This is explained in the book “Zero to one” by Peter Thiel. When we innovate a product like car when bullocks were on road, we gone from zero to one. When MacD sells burgers in volumes using its sustainable process, they have gone Zero to “n”.
Choose any type of business, which suits you, your knowledge, or interest better.
Initial Checklist : From idea to team and funds
Now you are ready to jump start. Have a handy check list before you put yourself into the boots of CEO. A rough idea, when starting a business, can help prevent from initial gust of failure.
- Idea and vision : Keep them written in your diary. This will behave like North Star for your company.
- Business plan : No need to keep it fail proof, because no business plan is perfect from get go. But you will be needing it in the meantime.
- Estimates and funds : Have initial funds and estimates of expenses. If you have raised it from keep every spent penned down.
- Team : Who is going to be the partner. Remember your wife might not be your soul mate but your partner or co-founder should be. You both complete the equation of business.
- Outsourcing : Best way to getting things done without hiring a huge team. Decide tasks and time limit that are needed to be done by a freelancer.
- Logo and Website : Get it done and protect your brand from get go.
- Suppliers and sources : Where would you get raw material, or supplies for your business. This includes logistics, suppliers, distributors and channel partners. But thanks to Direct to customer selling model, you do not need many distributors.
- Licenses : Get the necessary licenses and certificates like environment, food licence, trademark registration. Whichever is required.
- Legal set up : Form your company now legally, its birthday. Register a opc. pvt ltd/ proprietorship/ or HUF company. It is called incorporation.
- Get tax documents, and other legal documents on table.
Legal frame work required, when starting a business in india : 12 Steps
These are the steps you get as a result when you search how to start a business in india on google, for a quick over view’s sake they are here too.
- Check name availability here at MCA21 Website
- Get a DIN ( Director Identification Number )
- Acquire a DSC ( Digital Signature Certificate )
- A CIN for company : Corporate identification number
- The tax certificates like GSTIN
- PAN of company for taxation purpose
- Acquire a TAN ( Tax accountant number )
- Apply for shop act license or food license or any other related license.
- Have company seals ready and stamp the papers
- Get a Profession Tax Certificate from the State Profession Tax Office ( required when you hire people)
- Get partnership and other documents stamped and sealed.
- Register your employers and National Provident Fund and secure their future too.
Remember customers come later then employees.
Don’t panic for legal framwork. There are a lot of legal companies which will do that for you. So outsource it. A few names are vakil search, indiafilings, cleartax, neusource startup minds, startupwala. We are not associated with anyone of them, find your own way to them.
Obvisoulsy your business will be needing some initial funding from the point where you are just stating a business . Moreover, you will be requiring a back up funding. As in the food business, you might get your customers discover you late and your expenses on raw material plus salaries might bite you severely.
Still your initial funding comes from your savings, family and friends. Moreover, you can optin for loans. Like Mudra Loan which is a collateral free loan.
For expansion you can go for psbloansin59minutes.com , but at this point your business be somewhat old enough.
If you want to start a conventional business like restaurant, educational institute, or manufacturing business, they will cost you much. You will be needing infrastructure, manpower, machinery, raw material and much more. This is your capital expenditure investment. However, you can take properties on lease to lessen the one time cost.
But when you starting an online service kind of venture, then cashback, free first service, and coupons to providing things at cheap price will become your capital expenditures.
As a result, capital expenditure may be less or more but it will be a significant part of your business.
But remember, it should not be blind, initial excessive margins might never be recovered and this may end up giving up on the business.
Getting Resources on board
You can’t have everything at your own specially when starting a business in India. So there is a list of companies/tools which will help you work in a easy way.
- IndiaMart : From raw materials to heavy machinery. Even register yourself here too.
- Tradeindia : just like IndiaMart, find suppliers and other businesses of your need. Again list here yourself too.
- JustDial : Find office staff, security, cleaning and other services.
- Co-Working spaces
- For properties commonfloor, and magic bricks.
- Ledgers account ( Your company registering agency will provide you with it)
Tools you may need to be running seamlessly
- Logistics : Shipyari, Delhivery, Ecom Express, Fedex.
- For Hiring Freelancers : Fiverr, Freelancer.in, Odesk, and OLX
- Business Management tools : Zoho Suits, Google Business Suit
- In need of Online stores : Shopify, BigCommerce, PrestaShop, Shopcrat, instamojo custom store, and woocomerce plus wordpress combo.
- For Marketing : amagi
Conclusion : Over to You
However, I have used best of my best. Made you familiar with need, requirements, and legal aspect along with the tools and team. Hence, there is a strong possibility that something might still be missing, for that is to say, suggestions will be appreciated.
In conclusion, We talked about step by step about how to start a business in india. As, there is pandemic outbreak is in scene, therefore, people are moving toward staring an online business in india and it will increase. As it is cost efficient and safe mode of working. as a result there is a strong possibility that this will be new normal business culture.
In short, you may see a wave of startup boom in india in near future. So why don’t you prepare yourself to ride that wave.
On the other hand, the online business culture might mushroom just due to the internet. For example a lot of YouTube channels started floating after 4G internet in india.