Many people always think of “how to start a business in India” and what will be the outcome If they start any kind of business. Some individuals are beginners who are just starting out in the market. So, they need to understand various concepts in the business world.
“Make in India” was commenced on 25th September 2014, is a national program of the Government of India to encourage Indian manufacturers and service providers to upgrade quality to meet the global standards. It focuses on 25 different industrial sectors and focuses on building the best infrastructure through foreign investments, skill development and property protection.
Prime minister Narendra Modi has created an enormous awareness regarding the Make in India initiative. Make in India encourages entrepreneurship in Indians by providing incentives for establishing micro, small and medium enterprises.
Business Startups have been encouraged on a large scale by Make in India initiative. It also provides assistance in the initial cost to set up the business.
Due to the increased internet penetration rates, online business is trending in the market these days. Gone are the traditional ways of business. Online presence is important to match the current business trends. Social media platforms like – Facebook and Instagram or creating a decent website helps in promoting business online.
Why Should You Start a Business?
People have their own reasons for starting a business. Some might want to earn some extra money and some wanting to be their own boss. So different people have different reasons to start a business, there are no right or wrong reasons.
Entrepreneurship is a life changing experience. Want to be rich? One of the best ways is starting your own business. However, money should not only be the driving factor to start a business, passion should come first. If your intention is to only earn money, you may fail in the long run. You may get good compensation packages in your job as well, then why to choose business? Because of passion and willingness to learn.
Mark Zuckerberg bought a revolution in social media by founding Facebook. World needs more people like him. So, If you are an aspiring entrepreneur waiting for the right time and reasons to start your own business, here is a list of reasons why you should stop waiting and start working on your dream.
A. Freedom – Break out from the 9 to 5 job
When you ask people the main reason to start a business of their own, freedom would top the list in most of the cases. Freedom is a promise of entrepreneurship. It is one of the huge reasons why people start businesses on their own instead of working on a mundane and sluggish job.
International Entrepreneurship and Management Journal conducted a survey that states Independence was the most common reason stated by most of the people for starting their own business.
Why do working professionals move from a job to a business for this feeling of freedom? It gives you control over your life, gives you power to direct your life in your own ways instead of working on others’ decisions. You will decide how to work, when to work and what to work on when you own a business of your own.
The biggest and the most important reason for starting a business is your life will be under your control.You might envy your friends, who on a daily basis post cool pictures on social media platforms such as instagram. You too might want that freedom, but stuck in a mundane job.
Business increases responsibilities, but when you become a business owner, you choose what to do and how to get it done. You can control your lifestyle and schedule. You will have team members to do most of your work.
The distressing 9 to 5 job where you invest so much of time and energy fulfilling dreams of others without realising your own dreams and potential. The long working hours and hard work will never give you this feeling of freedom. Invest in yourself first, because you deserve it. You deserve waking up at a time of your choice, working in a field which you love, making money for financial security, above all – following your passion. Turn your dreams into reality instead of helping to transform others dreams.
B. Chase your passion – Take ownership of your career
Quote by Confucius “ Choose a job you love and you’ll never have to work a day in your life.” It means follow your passion to lead a happier life. People love to work on something that they actually like. You will put extra effort, hard work and become more productive when you love your work. You can even go on for long working hours when you work on something you like.
Working professionals, working for someone else, it is tough to get the motivation to do the best possible work. No matter how hard you work, the ultimate rewards will be given to the owners of the company. So if you start on something which you are passionate about, you will find the motivation to work every single day. The most common mistakes people do is to stay in a job in their comfort zone instead of following their passion. Instead of that, do what brings sparks in your eyes.
It is not necessary you must have a huge capital to start a business, if you are good at something which really motivates you then start a YouTube channel, create videos on that subject. So many beauty bloggers, influencers and freelancers make money through Youtube. The working hours get increased, but it will be worth it.
So it is all about your passion, gain expertise in a niche and you will find a way to start your own business. You will have to be pickier. Not everything will work but something will.So following your passion is exciting, you can work as long as you want. Days and night will pass by and you won’t even realize because you are doing something that you really love.
C. You will develop new skills
Business increases your overall experience. You do not need business degrees such as MBA to become an entrepreneur. In fact most of the successful entrepreneurs do not have one.
Entrepreneurs of successful companies stated that they started their business to keep learning new skills. Why is learning a driving factor to start a business? Because starting a business needs more than your idea, you will need skills to turn your idea into reality and bring in potential customers. Entrepreneurship will help you to learn these skills and apply them in your entrepreneurial journey.
You can’t be an expert at everything, so you pay others and can hire potential working professionals or freelancers and form a strong technical team to get your work done.
But why do you care about learning when you have an operational team to carry out all the work? Because in an every quickening world which changes in the blink of an eye, you will need to be on the top of your game.
D. You will achieve financial independence and job security
The corporate world is unexpected and full of surprises. You never know when a junior will become your boss. All these decisions of promotion and demotion are in someone else’s hand. But when you start a company of your own, you are investing your time and energy on yourself, in your future which will create financial independence and job security.
Having a business of your own enhances your financial health. Like physical health, financial health is equally important. Financial health includes the savings that you have, how much of your income are you putting into savings which can be used up after retirement and how much of your income you are spending on non-discretionary expenses. With varied business structures, flexible partnerships help to start a small business.
Top 10 Reasons to Start a Business in India
1. Sustainable environment for business – The Fastest growing economy
As India is a developing country, the Indian market provides a very sustainable business environment for any kind of business. Indian economy is at a growing stage which makes it favorable to maintain stability and growth of the business. Small businesses can be expected to attain huge growth in such an environment.
It is estimated that by 2025, 69 cities will have a population over one million which will increase the need of business to support livelihoods. Companies starting their business in India can easily glide through these conditions. The huge business opportunities should be the key reasons to start a business in India.
2. Varied Markets
India ranks among the top countries in terms of smartphone and mobile usage and internet penetration has given rise to new markets and new businesses. The IT and Pharma market is going to create huge business markets in the coming years. So markets are waiting to explode.
Market Capitalization refers to the total market value of a company’s outstanding shares in dollars. Market capitalization builds a competitive spirit and helps to increase the market capitalization value of a company.
With varied markets, your business can create a great brand value in the market. The business market of India has a huge number of paying customers because of the varied markets.
3. Easy Funding
On how to start a business in India with low investment, the government provides easy and faster funding at the initial stage. To boost the number of businesses, the Central Government has MSME (Micro, Small and Medium sized enterprises) which came up with several funding facilities, and incentive schemes. Also, due to the availability of various sources of funding, incubators etc.
4. Workforce and Work Ethics
The median age of a citizen in India is considered to be 25.1, whereas the US is 36.9. This shows that more than 500 million people in India are below the age of 25 and are ready to start their entrepreneurship career with good compensation packages.
The cost of business startups in India will be relatively less because of the availability of cheap labor. So the active and cheap workforce in India promotes a large number of business startups.
Also, Indians are known for work ethics all over the world. The will to learn and hardworking nature lets the Indians stand out from everyone else. The youth of India has just come out to look for new opportunities. Business can be effective by generating employment opportunities.
5. Business friendly laws
A lot of developed countries are dubious of privatisation resulting in more number of successful companies from abroad establishing operations in India. In recent years, Indian Parliament has passed several important bills such as Goods and Services Tax Bill, Direct Taxes Code Bill that are beneficial for industrial sectors. These laws have increased the cashoverflow and movement of products across the globe.
Also, Make in India aims to achieve best in class manufacturing by enabling forieng investments. These business friendly laws make it easier for international business people to start business in India. It also encourages small business startups.
6. Tax System
The Income Tax Department has reformed easy and business friendly tax laws keeping in mind tax savings for investors. Easy cash flow in the country helped to form these laws.
After the implementation of Goods and Service Tax, all the taxes got under a single tax regime. The tax strategies of India are very moderate and cut the business operational costs of businesses. So in all, the tax system of India is very business friendly.
7. Strong Trade Network
India has a vast trade network of technical and management institutions. These institutions are of the highest international standards. There are numerous trading partners to trade. These institutions help to develop skilled resources.
8. Rising FDI
Foreign Direct Investment (FDI) has been the highest from the past 5-10 years due to the global and liberal policies implemented by the Central government. These policies encourage global investors and Indian entrepreneurs to start their own business by providing finances. Due to varied cash flow and huge number of investors, FDI is at its peak. The top foreign direct investors are – Mauritius, Singapore and The United States.
9. Large Population And Low Business Operations Cost
A large population and a huge market with well established logistics are the biggest advantages of starting a business in India. The large population that India has, promises to attract foreign investors.
The costs of operations such as – infrastructure, internet, cheap labour, salaries etc are low. So the operational cost to start a business in India is comparatively low. Workers are ready to work at low salaries.
10. Audiences in Millions
India is a very big market for any kind of product expansion and thus businesses can generate more revenue from the Indian market. There are opportunities in every sector to scale the business operations to more geographic areas.
A single product is targeted among these larger audiences than also any business can grow very easily. But businesses need to understand the audience first and then provide them a product or service with the solution.
How to start a business in India Step-by-Step Guide
It is a dream of many of us to start our own business. We want to be our own boss, and not to prefer working under somebody else. We want to feel the sense of freedom. So instead of repeating the same common mistakes, let us create a business world of our own.
Thinking on how to start a business in India with low investment, you will have to consider a few things. Below is the complete guide on how to start a business in India:
Step-1: Get theBusiness Ideas
This is the initial stage and the most important step on how to start a business in India. Start analyzing answers to the following questions –
What do you want to start? Why do you want to start that? Do you want to start a service based company or a product based company? Is your business going to create a value in the market? Will it solve a problem? Who will be the target audience? Who can be your potential customers? Who will be the competitors? Which channel to use for the business – Online or store (offline).
If offline then you will need a rental space, or get a place of your own? Which online marketing strategy do you want to follow? Which web hosting services are you going to opt for? Will you get enough paying customers?
While answering these questions, try to look around and observe things. You may find something that will give you a better product to serve or a service that will serve the market. Always keep in mind that your business idea should be unique and solve related problems of the users. There are a large number of opportunities and business ideas in manufacturing industries, agricultural industries, hospitality and tourism under Make in India.
Once you have the clear idea of what exactly you want, most of the things will get sorted and time to move to the next step of how to start a business in India.
Step-2: Research about the market
Before investing money and high resources into your business, validate those ideas with real statistics. The most common mistakes done by most of the entrepreneurs is that they skip this part or give less importance to this part.
Find answers to the below questions:
What will be your target market?
Who are the competitors? What are the competition rates? Will your start up plan fulfill the market demands? Advertise yourself on social media, to see how the audience reacts on your idea.
Step-3:Implement a Business Plan
A business plan is one of the key building blocks of a business startup. It is a document containing business goals, the methods to achieve these business goals and the time period within which these goals are achieved. A good business plan with a realistic plan period helps you go through each stage right from starting business to managing business. It can be used as a roadmap and complete guide to achieve business milestones and increase the market capitalization.
There are no right or wrong business plans. Every business has different needs, as per your needs, create a plan which is suitable for you.
Step-4: Choose the business structure
When you have a clear understanding of all the questions, you will have to choose a business structure.The registered entity will determine how your business will be taxed and its subjection to liability. In India, a startup can be registered as:
A. Sole Proprietorship
When a business is owned by a single person, it is known as sole proprietorship company. In Sole Proprietorship, a person who is the owner of the business is responsible for all the business debts. He alone has to bear all the loss as well as the profit. It is a one person company and sole shareholder.
If you are planning to run your business alone and launch a small business then Sole Proprietorship is suitable for you. This entity type is the best option when you want to start with a small business where the initial investment, initial cost is low and all you need is a current account.
If you do not have a current account and are planning to get one, the bank may ask for your ID proof, address proof, PAN details and a cheque from a savings account where you already have. So if you already have a current account, you are all set.
This type of business has no individual legal identity under the law. Registration is not required, it is identified through alternate registrations such as GST registration. It is quite popular among small merchants and traders as it can be incorporated in fifteen days.
B. Partnership
As the name suggests, when two or more people plan to start a business and start a company, then it can be registered as a partnership firm. If you want to start a business but do not have enough capital, then you can team up with someone for a partnership firm. The initial cost can be invested by all the partners as per the partnership deed.
A partnership deed is an agreement between the partners who agree to start a business together. The partnership deed contains details such as – Business of the firm, Duration of partnership (plan period), Sharing of profit/loss and many such other entities.
All the losses and profits will be equally shared. If the company is in business debts, all the partners are responsible for paying it. It is a fair share between the partners. This entity comes under the Indian Partnership Act, 1932, allowing a maximum of 20 partners. Partners will have to take consent with other members to transfer their interest to others. The agreement must be signed by all the partners. It is highly suitable for small business as debts can be recovered from the personal assets of the partners.
C. Private Limited
If you are looking for funding from venture capitalists, to get bigger bank loans then this is suitable for you. There will be a group of board of directors to advise the CEO in this registered entity. The commencement of a private limited company requires registration with the Registration of Companies (Roc) under the Companies Act.
The stakeholders/shareholders are only liable to their shares in case of any financial crisis. So they are not at the risk of losing their personal assets.
D. Limited Liability Partnership
A limited liability partnership is a business entity where some or all the partners have limited liabilities. LLP’s are common in law firms, accounting firms, Professional and advisory firms. Your lawyer might have acronym LLP after a list of names.
E. One Person Company
A one person company has only one director. So if you want to start a business alone with a lower risk factor, go with one person company. It has high compliance and legal functionalining to similar to LLP.
F. Source of Funding
Once you have decided the business structure and registered entity, the next thing would be the amount needed to run the business. Having a strong business plan and plan period with market analysis and sales strategies, helps in getting potential investors. If the initial cost in starting your business is high, sources of funding are available.
How to start a business in India without money? There are various options, see whichever suits your business the most.
Personal Savings: Most of the entrepreneurs go with this. If you have a good amount of personal savings to start a business, then you can invest it to start your business. Bootstrapping is when an entrepreneur builds up business with nothing but bare minimum savings.
Also, at the initial stage of business, it is easier to get loans. You will have to start a business which brings out profit and then show these results to the bank to get a loan. It is not so tough to get a business loan in india. Any individual who wish to start an online or offline business need some fund for purchasing goods and other services. At that time you have to research about various schemes which provides business loan in india at best rates.
You have to meet the certain criteria and submit the necessary documents to be eligible for any business loan in india.
Funding from government and banks: The minimum age to get a fund for business is 18 years and maximum is 65 years. The startup should have a business plan to get a fund. The annual turnover should not exceed 25 crores. The applicant must be a citizen of India. It is easy to get a fund if you have the correct business idea.
Fund schemes for startups by the Indian Government:
1. Startup India
2. Mudra Bank Scheme
3. Crowdfunding
4. Grants
5. Business Installment Funding
Venture Capital: There are firms with wealthy investors, looking to invest in innovative and dynamic startups with a long term growth perspective. These firms are known as Venture Capital. India has become a center of startups from the last two years, so more number of investors globally show great interest to invest in these startups.
These firms invest a huge amount only in innovative business ideas. So if your business idea stands out from the others, there are high chances you might get funding from these firms. So if your business plan is innovative and unique, you may seek funding from Venture Capital.
Business Incubator: Business Incubator are the companies that help new startups by providing them amenities needed to operate their business. The amenities include – working space, internet, electricity etc.
These firms help provide amenities instead of monetary funds and help small start ups to operate. They accelerate the business operations of small start ups. Their focus is improving entrepreneurship in India. Few Business Incubators also provide rental space for startups to carry out their work.
Co-Operative Credit Societies: These institutions are established with an objective to provide loans at a reasonable rate of interest. They offer loans if you purchase their shares.
Company name availability: Now that you have the monetary funds, you can officially start a company of your own by registering your company name. To register the company, you will first need to check the availability here . All the applicants can check on this website whether the name is available or not. After the company name approval, the company name will appear on the website.
Government registrations: Obtain Director Identification Number (DIN)
DIN is a unique Director Identification Number provided by the Central Government to an existing director or intending to be a director of a company. It is an 8 digit number with a lifetime validity. All the details of the directors are maintained in the databases using this DIN.
DIN is name specific, that means if a person is a director in more than 2 companies, he will have a single DIN. To get a provisional DIN, you can fill the DIN-1 application form which is available online.
Director Identification Number will be used for income tax returns, or any other information related to the company submitted under law, then the application must have a DIN with the signature.
Digital Signature Certificate: A digital signature certificate is a digital key which validates the identity of the holder of this certificate. It contains information regarding the holder’s name, address, email address, name of the certifying authority and date of certificate issued.
To apply for DSC, DSC application form with photo id and permanent address id proofs must be submitted by the company’s directors.
Incorporation Certificate:
A certificate of incorporation is a legal certificate issued by the Ministry of Corporate Affairs which proves the constitution of a company. It shows the name of the company, registered number and the date on which it was incorporated. The incorporation certificate will be sent to the registered email id, submitted while filling the form.
Company Seal for documentation and Stamping of all the official documents:
While sharing the official documents with potential clients, a company seal is required. The cost of getting an official seal depends on the number of words that need to be engraved on it, number of seals provided, and the time period for the delivery of seals. These seals are not mandatory for the private limited company.
All the applications and certificate of incorporation must be stamped. Stamp duty can be paid online to the Registrar of companies.
Apply for Permanent Account Number (PAN) and Tax Account Number (TAN):
For the application of Permanent Account Number, you will need to fill form 49 A. Once a unique Permanent Account Number is acquired, you can get it delivered at your address. The application for PAN can also be done online, but the mandatory documents will have to be presented physically for verification.
As per the Government of India, a Tax Account Number should be issued by the Income Tax Department to all the entities who either collect tax or deduct tax at the source.
Tax Registration and National Employees Provident Funds Registration:
GST registration is mandatory to start any business. This should be prioritized before starting any business. You can visit the official GST website for more details.
Step-5:Marketing
Successful Companies spend millions of dollars in marketing and creating brand awareness among the audience. Brand value affects the way of marketing. But what is brand value? It is based upon the financial amount the brand is worth of.
Then comes brand image, which is the perception of consumers and how they feel about the brand. To raise the brand value, brand image has to be raised. For instance – a diaper brand like Huggies is more popular than any other brand because it has put so much of an amount in paid marketing and advertising its products. This concludes that you cannot compromise in marketing.
Digital marketing has replaced the traditional ways of marketing. There are various types of digital marketing methods.
Content Marketing: Here, engaging content is used to target the audience. It is a strategic digital marketing approach focused on creating engaging content and attracting an audience to drive profitable customer action.
Email Marketing: Email marketing is a marketing approach where a message is sent thru emails to a target audience. It is broadcasted to potential customers. It mainly contains advertisements, catalog, business requests etc through which customers can be driven
Paid Marketing: Paid marketing is a part of digital marketing that refers to strategy where the brand targets potential customers.
You can even go for special tools such as SocialPilot which is a comprehensive social media marketing tool designed for professionals.Marketing helps to create more paying customers through websites and social media channels and helps create a brand image in the market.
Step-6:Start a website of your own
Business trends demand to have an online presence. It can be done by creating social media pages or a decent website. Being in the startup world, you will be looking for cost effective ways to run your business. Here is a list of good and cost effective hosting services for startups.
A business needs to set up a decent website using web good hosting services or social media channels such as Facebook or Instagram for creating marketing campaigns and online presence.
FAQ:
You can start any business by understanding the potential of the market and the audience which are in need of the solution of a particular problem.
With Low investment you can start an online business which does not require any employee or physical store.
You can look for the best local place in your city and then understand the need of the local people related to the food they require. You can make good income just by selling local dishes.
Food business can be started in any target market by looking at the needs and interests of the people.
Hotel business can be started at any place and It will be more profitable where the people are coming at the tourist locations.
It is better to consult with the people who are actually running this kind of business from long time.
You need some form of investment or money through your own If you want to start a small business also locally.
Small business can be started from home also in India. You can register yourself on an e-commerce portal and then start selling a variety of products online.
You can start a laundry business locally by understanding the needs of the audience. You can also list your laundry business on google my business to get more clients.
There is definitely a need of some amount in your pocket to start a small business in India.
You need to have some kind of experience or may need to consult the professional people who are doing this business for a very long time.
Restaurant business in India is most popular as It generates good profit when compared with other businesses. The best advantage is that It is a rotating business. So It is good business to start by just targeting local peoples.
Bakery business can be started from home in India and You just need to have some orders through local people. You can list your bakery business on GMB.
Franchise business in India is also most popular. You just require good physical space to set up the store and this business generates good profit with a popular brand name.
E-Commerce business in India is trending these days as there are many e-commerce marketplaces. Sellers can list as many items on the marketplace and can generate revenue from different marketing channels.
The transport business also produces high profits to the business owners. You can purchase public transport automobiles and earn good profits. As people are travelling more these days so It is a good business to start.
Computer shop business in India can be profitable to those individuals who are having some expertise in hardware and software departments. You can start this business If you really think that you can resolve any problems in this field.
Solar business in India can be a good idea for those who are much interested in Environmental concerns. This business also has capacity to produce good profits to the business owners.
Courier business is having competition more these days. The reason is obvious that More number of e-commerce marketplace are establishing in India. But you can think and start this business to earn money.
