How to Start a Business in India | Step by step process explained in detail
Start a Business in India | A Dilemma to Many
Many of us have a dream to own our business. We want to be our own boss. Not all prefer to work for somebody else.
The feeling of being under someone and taking orders isn’t pleasant. That sense of freedom is worth millions.
Most of us have that dream, but we fear to take any step further. If you want to Start a Profitable Business in India, you need to consider a few things before you could start a business in India.
It may not be equally easy for all the individuals since everybody has different situations in life to deal with. Some are regular working professionals bound with commitments who fear to quit their job.
Few people do not have enough money to start with. Some people lack ideas. Few do not dare to take the risk. And some people do not have a supportive family.
There could be reasons like the insecurity of a regular income, lack of support from family and much more. Life gets us involved so much, and we end up following what society teaches us.
We fear to do what we wish to and consider a ‘successful life’ the one defined by others.
Types Of Business | Know Before You Start
Before you start your business in India, you need to understand what sort of business you want to get into for starting a business in India. You should also keep an eye on upcoming business ideas and the best profitable businesses in India.
You should choose the right form of business. Which one is right for you may differ depending on various factors. Let’s take a look at different types of business so that you can understand which one is perfect for you.
Sole Proprietorship
Are you planning to run your business alone? This will be the perfect form of business you can register. Sole Proprietorship is suitable when you want to start small.
Investment needed is not much. You can start with a very minimal amount. All you need is a current account.
To open a current account, the bank may ask the documents like identity and address proof, latest photograph, PAN details, a cheque from the savings account you already have.
In Sole Proprietorship, the owner of the firm takes it all. If the business is making a profit, he doesn’t need to share it.
Even when there is a loss, he will have to bear it all alone. He becomes personally liable in case the business is in debt and not able to repay.
Partnership
When two or more people plan to start out a business, they can go for a partnership.
If you want to start a company with a capital amount needed more than you can alone afford then you can team up with someone.
This gives you an opportunity to be a part of something bigger. To open a partnership firm, you will again need a current account.
To open a current account for a partnership firm, the bank will require the partnership agreement, Photographs of all the partners, identity proof as well as the address proof, Office location details, PAN details of the company, and the communication details. Unlike Sole Proprietorship, the risk is lesser.
Profits and losses are equally shared. The liability is shared as well i,e, If the company is in debt, all the partners will be equally responsible for paying that off.
Private Limited
To start a business in India which is a private limited company, many stakeholders are involved here. Also, advise if you accept venture investments or get bigger loans from banks.
Based on the company model, goods/services provided and the outside investments involved, some companies will need to be launched as a private limited company at the start.
There’ll be a board of directors to advise on the CEO. The obligations are divided between several stakeholders, and it is a structured method of doing business whenever more significant investments are at stake.
The operation of a private Limited company will require registration with the Registrar of Companies. You will also need a certification of incorporation.
Limited Liability Partnership
The Limited Liability Partnership Act 2008 enables entrepreneurs to start LLP companies which include reduced liabilities in comparison with all the Private Limited Companies.
As its name suggests, a significant change in LLP is that the restricted obligations of spouses, in case of closed / bankruptcy, the personal resources of the partners are not liable.
This allows greater freedom and risk-taking ability for those entrepreneurs.
Though the venture capital and angel investors might discourage this mode of enrollment due to the limited accountability of partners involved, LLP has some functional advantages like minor paperwork, easier incorporation, smaller fees Etc.
One Person Company
One Person Company allows Individual entrepreneurs to integrate their business as a separate legal entity with Restricted Liability.
The legal and functioning standing is similar to that of an LLP and also an option to have just one director.
Even though there are more statutory compliance requirements, this form of incorporation is acceptable for individual entrepreneurs.
This is more of a safer approach when it comes to starting a business alone. If you do not want to start a business in India with a factor of risk and trouble yourself later, go with One person company.
Fundraising
Once you are sure about the type of business you would want to operate, Next big thing will be to raise the amount to run that business. There are various forms you can raise the funds to start a business in India. Let’s take a look at some of the options here:
Personal Savings
This method is what mostof the people use. You can use your personal savings to start up a business.
If you have saved some money, you can invest the same.
Entrepreneurs are the ones who generally go with bootstrapping(Personal Saving) method.
You can make it easier for your business to get loans if you are in the initial stage of the business.
All you need to do is start a business that is profitable from your own savings and show the same results to the bank.
Loan For Business Startup
After Personal savings, loans from banks are the next option people generally go for.
Not all people may have savings or enough savings to start a business.
So they turn to banks with the hope to get the loan sanctioned by the bank. Banks, in turn, are very choosy to provide loans.
They do not give loans to anybody who asks for it.
In order for them to provide you with a loan, you will have to show the previous career records, the business plan, or the revenue records if the business is already operating.
Funding From Venture Capitals
There are various firms that particularly are looking for young and dynamic startups to invest in.
Those are called Venture capital. India has become a booming hub for startups from the past two years.
Many international investment firms are showing great interest in India.
They are keen to invest in the startups that stand apart from the crowd.
They come with a huge amount of investments and invest only in great business ideas or the founder with thriving prior experience.
Some of the examples are Helion Venture Partners, Accel Partners, Blume Ventures, etc.
Business Incubator
There are firms who apart from Monetary investment, look forward to helping the booming businesses to come up with the ladder by providing them other amenities needed to operate.
They offer amenities like co-working space, Electricity, Internet, etc.
These accelerators for startups are operated by the venture capital firms, Government, or other huge private institutions.
Mainly their focus is on improving Entrepreneurship in the country. Some of the examples are Catalyzer and Freemont Partners.
Branding Strategy
So now you know what type of business you may be operating and the fundraising method you will use to get started. Next is to create an identity for your brand and that is what we call Branding.
Branding will include creating a Brand name that should be unique and will be displayed on each and every product you sell to create an image for your brand in the market.
A logo will be a symbolic representation of your brand in the market. It can be in the form of Number, Text, A Graphical symbol or a combination of any of these.
Trademark Registration is a must for you to make sure nobody copies your business or the ideas in the future.
It should be unique and your buyer should be able to distinguish between your trademark and the others in the market.
A website and Email ID will be required as well since nowadays everything is going online and you may lack behind if in case you do not have.
It will help you in building an online presence as well as with the communication part. As per the law, an email ID is considered as a legal document and any promises or commitments given through an email is legally valid.
Marketing The Business
Now that you have created your Business and You have given it a form of a brand, it is time for you to tell people that you exist. You need to have a marketing strategy.
Marketing can be done either in traditional ways or you can go with Digital Marketing.
Nowadays most of the businesses turn towards Digital platforms to create a buzz.
Since most of the population can be found online and it gets easier to target a specific group of people.
There are various channels that we could utilize in digital marketing to promote a brand.
A business will need to either set up a website or social media channels or both to create promotional campaigns. You will need to optimize the on-page SEO and off page SEO for your website as well in terms of Search Engine Optimization.
You need to be knowledgeable about digital marketing or need to hire an expert who can handle your profile.
In Digital Marketing we will need to focus on Search engine optimization, Social Media Marketing, Email Marketing, Paid Google Ad Campaigns and much more.
I Hope this helps if you are planning to start a business in India.
