Starting a company can be a motivating idea, particularly for first-time entrepreneurs or employees who are tired of 10-6 jobs. When you think about the ease of not working most hours a day in a faraway office, not having to report to a bad manager, and the prospect of earning unlimited money, it is inspiring to start your own company.
A start-up is not just planting a seed. You need the seed to be sown, nourished, given the right set of conditions, and taken good care of. Be rest assured, you will reap the fruits of your labour.
Starting a company is a good decision, but it can also be frustrating, complicated, and not as easy as it seems. Check out the various factors to be considered before venturing into your own start-up success story.
Growth of start-ups in India
Since the last couple of years, start-ups in India have become the latest trendsetters and talk-of-the-town global business economy. In 2019, 1,300 start-ups were born in India, making it the world's 3rd largest start-up ecosystem. These businesses, led by young Indians, are motivated to take on different challenges to tackle the areas of concern for Indian customers and provide them with different goods and services at fair prices. So, if you are interested in starting a business in India, you have already taken the first step towards becoming a successful entrepreneur.
The various factors to be considered for start-ups
Starting and owning a start-up is a difficult job. One thing is to have the financial ability and expertise to get a company off the ground; another is to endure the fierce competition, the uncertain economy, and the continuously evolving and unpredictable marketplace. Measures need to be taken, including small ones at each stage of business.
There are some critical factors that one has to consider to crack the start-up code. Many who run and own large organisations follow some steps and tactics you need to hold on to for achieving your target.
1. Start-up capital
Capital is one of the most important aspects of financial management for start-ups. Capital is the sum or value you need to bring into the organisation to start and run. It can be non-cash or cash. List all the potential investments you need to make to start and run, such as buying properties, construction, lease payments, operating expenses, etc., to know how much money you need.
Identify and list all the expenditure needed to run the company, such as salaries, office space rent, stationery supplies, electricity charges, etc. In your business plan, consider the monthly expenses. Remember, in your capital requirement, you usually have to hold at least six months to one year of monthly spending as starting expenditure.
The Indian government has launched over 50+ start-up schemes in the past few years. Each start-up framework is designed to improve the Indian start-up ecosystem. These start-up schemes were introduced over time, and some were implemented during the launch of the Startup India plan. Check out all such schemes and enrol your business in the most suitable one to avail tax and other advantages
2. Importance of hiring the right workforce
Starting a new business initiative also requires you to perform different roles for different cases. However, when the start-up begins to grow, you need a great team to make it successful. It's just as important to recruit the right people for your new start-up as to have a great product or concept. It's people who make a business effective at the end of the day.
While the workers you hire for your start-up must have the right qualifications on paper, it is equally important that their attitude and actions align with your company's mission. For the faint-hearted or those who get discouraged quickly, working at a start-up is not a career. Each position in your new organisation is likely to come with a collection of challenges and hurdles that need to be overcome. You need to employ people who can respond positively to these challenges.
Handling people is the hardest challenge for business owners. This may be the reason why increasingly start-up organisations are putting immense importance on hiring the right people.
Consider the different government regulations you need to comply with if you plan to recruit, such as PF, Mediclaim, Gratuity, and other benefits. In case you are planning to outsource the business, consider the competence and efficiency of the organisation to which you would outsource.
3. Government compliances and company registrations
Before you start operating, ensure that you have the necessary registrations required to legalise your company after considering all the capital and expenditure requirements. You need to have an address proof, trade license, PAN card, and GST registration certificate (if applicable) to comply with the government regulations. Don't forget to file the GST returns and other tax returns at the stipulated time to avoid hassles in the future.
4. Marketing for start-ups
Remember, It is not enough to have a great product, workforce, and sufficient money to expand your start-up and make it a success. To develop it, you need to get more clients, sales, and revenues, which can be feasible with comprehensive start-up marketing efforts. Start-up marketing is a different science, unlike traditional methods. There are several methods and platforms by which the start-up can be promoted. But it would help if you considered your audience, their actions, and your company's existence. You need to pick the right marketing platforms and merge them and come up with an unbeatable plan.
Remember, smartphones, and the internet are ruling today's India. According to the latest estimates, there are 374 million smartphone users in India, and 270 million people in India use the internet. Because of which over the period of time, the mode of marketing has also changed. In today's time, many companies are concentrating heavily on digital marketing to expand their businesses rapidly.
There are several digital marketing channels like search engine marketing, social media marketing, content marketing, or video marketing, that you can use for your start-up. But all the tactics for digital marketing may not be ideal for your business and give you the same profit.
It is critical to find out the most efficient digital marketing strategies for your business to maximise the output.
5. Accounting Analysis
Finally, make sure you have a reliable financial reporting process in place before you start a company. A reliable accounting and financial reporting system help you to know what's happening in your business.
It would help if you also considered how Indian start-ups embrace the digital platform to change how they work today. Not only that, when the Startups like OkCredit entered the market climate, there was also a positive change in traditional cash flow and all other financial services.
The Indian economy, which is significantly cash-driven, has taken advantage of the Fintech opportunity over the last few years. The range of services offered in this sector is immense, with several choices, including e-wallets, banking, and insurance, and has changed the way customers conduct their everyday transactions. Fintech is particularly advantageous in India, as the country boasts a rapidly rising, unrivalled youth demographic.
Customers can have more time, and financial institutions can enjoy more stability, with accurate and open knowledge about fees, preferences, and billing components with fintech companies. Financial transactions have become more straightforward and credible than ever before, thanks to apps like OkCredit.
Having your own start-up is an exciting idea for any budding entrepreneur. Many people are thrilled by the prospect of being their boss, handling their own time and finances. With all of this enthusiasm, one can face problems in the business without advance thought. As the truth about the market climate sets in, the lack of adequate initial planning can be catastrophic for the business owner(s) in the long term. Try to consider the above factors before beginning any form of company to prevent untoward or unexpected losses.
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Q. Does GST apply to start-up businesses?
Ans: Registration under GST is required for any company whose turnover exceeds Rs 40 lakh in a financial year. For service providers, this cap is Rs 20 lakh.
For many small businesses, including start-ups in India, this higher threshold under GST has given compliance relief.
Q. Does the government give tax benefits to start-ups in India?
Ans: Tax exemptions are allowed under the Startup India Program for Qualifying Start-ups. In case the start-up company is incorporated after April 1, 2016, it will get a 100 % tax rebate on profit for a term of three years. The only condition being that the annual turnover in any financial year should not exceed 25 crores.
Q. Does a start-up need a trade license to open a business?
Ans: All businesses need a business license in India to operate, whether they sell online or from a brick and mortar shop. A company that falls under the concept of the shop and establishment act must avail of the Shop and Establishment Certificate.