In 2019, India was ranked 63rd amongst the 190 nations in a report by the World Bank in the ease of doing business which is an improvement by 14 ranks from the previous year. This figure is indicative of simpler and better regulations for starting a business and is more conducive for operating businesses.
Various factors are to be considered for starting a business in the economy so as not only to ease up the setting up of the business but to also ensure its stability in a longer run. According to the reports by the Business Standards, more than 36 percent of the registered companies have been closed down in India due to various factors including non-compliance with legal norms or they turned out to be mere shell companies.
Hence, before starting any business, you should consider the following as a checklist:
- Have a unique business idea
- Financing and proper budgeting is the key
- Advertise and market smartly
- Start small
- Technology is your best friend
- Go with the market forces
- Legal compliances
- Have A Unique Business Idea
With startups on the rise, what distinguishes one business model from the other is the unique idea that takes into consideration not only the end product or service but a proper means to achieve that product or service. Proper planning is hence quintessential for any business. While a similar idea might be shared by many, the important determining factor is what makes your idea stand out from the rest. It should be an idea that serves not only your needs but should be the one which is needed by the populace suiting the geography and the economy of the nation. If you are unable to find a niche or an unexplored idea, then launch a business that offers its services in a much better manner than the existing market players.
The target audience of the business is also a factor that has to be taken into consideration while working on the business idea. It is something that will help you in starting your own business, attracting people easily and later establishing a market of your own with a bounty full of returns.
- Financing And Proper Budgeting Is The Key
Before a business is put into practicality, the most important ingredient to execute an idea is the finance and proper budget. The type of business you are aiming at will decide the initial costs you would incur and the capital required for it too. Financing involves not only the initial cost of setting up the business but also the expenditure to allow it to flow smoothly. This should be sufficient for the first few years till the time the business starts paying for itself. Loans are one of the options to finance the business but the high rate of interest amongst other issues becomes a hurdle that is even more prominent for Small and Medium Enterprises (SMEs). Sometimes, they have to resort to dropping the prices of their services below profitable levels. To curb such a problem, the government has come up with various loans schemes namely the Standup India Scheme(which supports women entrepreneurs and marginalized sections i.e. Schedules Castes and Scheduled Tribes), Micro Units Development and Refinance Agency Business loans (MUDRA), Credit guarantee fund government business loan scheme and Credit Linked Capital Subsidy for Technology Upgradation amongst other schemes, funding the unfunded.
Further, to minimize the costs incurred by an enterprise, leasing, renovating and improving the already available resources can come to a great rescue and the amount so saved can be diverted for other purposes or kept as a reserve for times of need.
- Advertise And Market Smartly
Smartly marketing your business is an effective way to develop the business’ objectives. Smart marketing involves specific, measurable, achievable, realistic and timely planning. While promoting your business, there should be minimum scope for generalities and it should contain enough information to attract the target audience. In the era of advertisement, even the best product proves worthy only when it is advertised properly. More than media, the use of social media handles can easily create enough buzz in the market involving lower costs by making videos, blogging, infographics or some contests etc. which can drive the targeted audience towards the product or service which the business is ascribing to sell. Such ideas also lower the costs involved and don’t require much professional expertise.
- Start Small
Ideas like that of Facebook were created in a Harvard dorm room and the foundation of Microsoft was laid in a garage which went to become one of the biggest business giants globally. Undoubtedly, starting any business is not always a pleasant ride. A lot of issues plague the blooming of the business and both labour and capital are at stake. Additionally, nothing can guarantee the success of a business cent percent. Hence, it is advisable to start a business at a small scale initially and understand its functioning and operation properly. This also leaves enough scope to rectify any flaws which might be identified after the business has commenced and which could not have been comprehended at a theoretical stage. Therefore, instead of investing a major chunk of resources in one go, the same can be reserved depending upon the success of the business so that even in case the business collapses, the cost of the spending could easily be recovered without incurring any substantial loss.
5. Technology Is Your Best Friend
Technology has potential effects on any business. Technology at the workplace offers numerous advantages and eases the workflow. Tools used for video conferencing, emailing, lead management, high-tech software for payments etc. can aid a lot in the business’ operational processes.
Businesses have been employing technology to improve the customer-business relationship. A proper website of the business enables in establishing a wider customer base and connects distinct and remote locations at an instant without involving any additional costs. Usage of electronic files in a network lowers the cost of physical sharing of documents. Since businesses involve a lot of confidential information proper security systems are also necessitated such as biometric alarm systems. Thus, if the technology is handled properly, any business can reduce the operation costs, easily promote and design its new products or services, expand its operation to newer markets virtually, deal with consumer complaints at a faster pace and streamline administrative costs while reducing bureaucratic costs and red-tapism which is otherwise rampant.
Business networking involves making connections with potential clients and other people who can help you with the referrals to generate business. It is one of the most effective steps to expand your business. Apart from word of mouth recommendations and referrals, it can provide you with the opportunities for joint ventures or partnerships thus, bringing in people with similar interests and creating a mutually beneficial relationship leading to the expansion of the business. One way is to socialize with people in events who can help you with your business. Articulating your business idea and building repute of reliability in front of others also helps in conveying and garnering proper networks for your business. Moreover, it is also to be remembered that networking involves ‘giving and taking’ and any person would show her/his interest only when they gain something. It involves a proactive approach from your end to follow up time and again. Proper networking might also help you in terms of expertise and advice which can help you to connect with influential people in your field.
7. Go With The Market Forces
Market forces of demand and supply play a vital role which determines the longevity of a business. If the service or the product is offered at a particular place where there is no demand, then the business is going to incur losses. Hence, determining an appropriate location for the establishment of your business is a major giveaway so that it is easily accessible and known to all the target customers.
8. Legal Compliances
There are a lot of legal requirements that have to be complied with before and after establishing any business. Depending upon the business structure and the nature of the activities being carried out, there is a need for registration with the concerned authority. Various licenses are also to be obtained after registering a business, such as Shop and Establishment license, FSSAI licenses, etc. Protection of Intellectual property is also advisable to prevent any future disputes.
Indian Patent Office is the patenting granting authority in India. It is administered by the Office of the Controller General of Patents, Designs and Trademark. E-filing is also permissible. Taxes and compliance with accounting laws can also save a business from a lot of trouble as there is an involvement of various Central, State or local taxes to various businesses. A proper understanding of taxing laws also enables the benefit of various tax holidays and exemptions. Compliance with Labour laws for businesses whether small or large corporations are very crucial. Laws pertaining minimum wages, Provident Fund Payment, gratuity, payment of bonus, maternity benefits and laws related to sexual harassment are few of the necessary compliance and any violation of these can attract huge penalties which might be a set back to new businesses.