Nowadays, India is in the way of becoming a global leader in many businesses all over the world. It is a golden opportunity for the new business aspirants to start the business in India. After this Corona pandemic and global attraction towards India, there are many gates open for doing business in India.
Now, for starting a business, there are certain procedures to follow. Whether it is a food business, online business, media company, a big manufacturing company, home-based manufacturing business, or any business, it is necessary to convert it into a legal entity. There are different structures of business available like a sole proprietorship, private limited, etc. (you can find all the options in the last half of the blog). Also, there should be proper research in your interested business or a company and accordingly plan should be made. Also, funding is a major part while starting a business in India.
But first one should have courage and passion for the work and potential to sustain in the market fluctuations.
The success or failure will depend upon involvement in business and how effectively you implement your plan. Because as you involve more, you grow more.
Nobody gets a millionaire overnight after starting a business. It will take a lot of hard work and dedication towards the work, whatever you do.
If you have that much patience, believe me, the success is yours.
An ultimate 5 step guide on How to start a business in India
There are some must-know steps stated below for starting a business or a company.
Idea and Research
Project Report/ Plan
Funding for Business
Registration and Legal Process
1)Idea and Research
The idea is nothing but a business concept you already have in your mind.
You should first believe in your idea and just love whatever you do.
Or, there are many business ideas that people have already implemented, you can find loopholes in it and come up with a changed form of that business. If you are on a low budget, you can research business ideas that require small capital investment, gradually you can turn it into a highly profitable business.
You should ask yourself some questions like,
What are you going to start?
Why are you going to start? Is it capable of solving the existing problems of customers? Is it affordable against the existing business, if any?
What is the difference between your new idea and the existing business, and why customers choose you over them?, When you get an unobstructed view of your idea, then only go for the next step.
It takes time for choosing a better one among the several good ideas. But once you complete the business idea, then go ahead.
Half knowledge is always dangerous. So try to get a sound knowledge about your idea and product or service.
You can get the training from masters. If any educational institute is available, get admission in it, and enhance your knowledge.
Ask for help from the persons already in that field.
Research by yourself and try to come up with a new technique from existing models.
The perfect way of learning
- Start reading the related blog posts.
- YouTube videos and channels (But one should know misleading content and fake business gurus)
- Attain webinars or seminars
- Practice and implementation
- Various Training and Courses.
3)Project Report/ Plan
Don’t keep all the things in mind, first note down it all on a paper. It will help you in making a systematic project report.
A fool with a plan can beat a genius with no plan.
The quote shows the importance of planning.
No matter how small or big your business is, the business plan is like the soul of the business.
The plan should not be too lengthy, however, it must contain at least following points:
- Business nature
- Working capacity
- Market analysis
- Area or location for business
- Manpower requirements
- Revenue generation
- Future expansion plans, etc
4)Funding for business
Once you get ready with reports, you can approach to investors, bank or private funding,
there are many options available for financing your business
Here are some options you can go through
It is very difficult to convince a bank when your business is new or it’s a start-up and your bank account does not have any CIBIL score or transaction records in India. Because of the bank’s previous experience, it is not in favor to entertain the new entrepreneurs. However, If your project report is too good to convince the bank manager, you know any banker of that bank personally or you are very good at convincing and communicating then you can get approval for a loan.
You can implement your startup idea with some of your previous savings. You can use this as initial capital for work.
You can borrow money from your parents or friends, on payback condition or you can give them shares of your company or make them a partner in your firm if they want so.
Business venture capitals
In India, the number of enthusiastic and smart youth is the highest.
This results in great and unique startup ideas. India is a new startup hub in the world. There are so many international investment firms, which show an interest in young and dynamic start-ups to invest in.
If you think your idea is unique and the investor will like your plan, then you are much more ahead in the race.
5)Registration and legal process
The next step is to register your business and make it legal.
There are four types of options for a company.
C)Private limited company
D) Limited liability partnership.
It is an enterprise that is owned and run by one person, and only one person is solely responsible for the business growth. Sole proprietorship firm has not separate existence from its owner and it is not a legal entity. All decision making power is limited to one person.
In this business, two or more persons run a business. There is a minimum of 2 and a maximum of 20 partners can establish a business firm.
A partnership is a mutual agreement between the persons (partners) to share the profits and losses that occur in the business.
Partnership firms in India are governed by the Indian Partnership Act, 1932.
Private Limited Company
A private limited company is a separate business entity owned by a small group of people called shareholders. The minimum number of shareholders is 2 and limited to 200 nos.
A private limited company is the best to suit for the startups who aims higher growth opportunity and stability. It is a separate business entity from its shareholders. But the Board of Directors is responsible for all the activities carried out regarding business. The profit-sharing among the shareholders is in the form of Dividend.
It incorporates the company under the Companies Act of 2013 and the governing body is the Ministry of Corporate Affairs (MCA).
Limited Liability Partnership (LLP)
LLP is a hybrid between a company and a partnership. LLP is also a separate legal entity. The major advantage of LLP is that one partner is not responsible for another partner’s misconduct or negligence.
It involves fewer compliance requirements as compared to the company. And there is no need for a Board of Directors like in Private Limited Company. The partners may manage the business directly.
This form is useful for small and medium enterprises, especially in the service sector.
It incorporates the LLP under the Limited Liability Partnership Act (LLP Act), 2008.
We can register a company in less than 10-12 working days and registration fees are about 10k to 15k INR.
In that process, don’t forget to get your GST no., TAN, PAN numbers. It makes business easier and legal for you.
Also, it is much easier to enroll your business by an online application for UDYOG ADHAR through a Ministry of Micro, Small, and Medium Enterprises (MSME).
Once it’s all get completed, open a current account in your favorable bank so that in future you get additional benefits for your contact and your goodwill.
Schemes/loans by the government of India for the new beginners in business
Micro Units Development and Refinance Agency Limited (MUDRA) scheme is available for all categories. You can apply for this from a bank or online portal.
For this scheme, there is no security of collateral for the loan as well as no processing fees.
In this, there are three different stages
Shishu Mudra Yojana-
This is for small entrepreneurs and new startups. At this stage, you can avail loan up to only 50,000 rupees.
Kishor Mudra Yojana–
This is for the entrepreneurs with the existing business and at this stage, you can get loans from 50,001 to 5,00,000 rupees.
You should fulfill the following requirements:
- The current bank account statement
- Income and sales returns
- Balance sheet for the previous two years
- Estimated balance sheet for the current year.
- Caste certificate if eligible
Tarun Mudra Yojana–
This is for business expansion and at this stage, you can get a loan from 5,00,001 to 10,00,000 rupees.
The requirements are as same as that of Kishor Yojana.
Skill India / Pradhan Mantri Kaushal Vikas Yojana
In this scheme, you can learn about various small scale and medium scale business models. You can enhance your skills through the certificate courses provided in this scheme.
Pradhan Mantri Employment Generation Program
The central government has started this program and the Ministry of Micro, Small and Medium Enterprises (MSME) does the administration. In this scheme, the bank will provide you a 95% loan of your total project cost (90% for General Category), You can also avail the government subsidy from 15% to 35% according to your business location zone.
They limit the service zone scheme to only Rs.10 lakh, while for the production and manufacturing sector it is Rs. 25 lakh only.
Chief Minister of Employment Generation Program
The state government has started this program. Here you are also eligible for the subsidy and rest are the same as per PMEGP.
For more information, please visit your nearest District Industries Center.
This is a special scheme from the government of India for SC/ST and Women Entrepreneurs to increase business awareness among them.
Stand up India scheme facilitates bank loans between Rs. 10 lakh to Rs. 1 crore.
- The process for starting a business in no more complex like was in the past.
- Thorough research and sustainable business model builds the base of a business.
- You should know the type of company which properly suits your business.
- If your documents are ready, the process would not be complex.
BEST LUCK FOR FUTURE.