India saw 3,061 startups in 2020, making it the third-largest startup ecosystem in the world. Learn all you need to know about starting a business in India in this 7-step comprehensive guide!
Do you Have What it Takes to Build a Successful Startup Company?
Almost 90% of businesses fail within the initial 5 years. There is a narrow line that separates the dreamers from the doers. Once your business is up and running, you must work just as hard to keep it going year after year.
Table of Contents
- Do you Have What it Takes to Build a Successful Startup Company?
- Before you begin working on your startup concept:
- Startup Registration in India:
- What are the benefits of Registering your Startup?
- Documents required for Startup India Registration:
- Applicable Laws for building a Startup:
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With that said, having a guide and a set of directions to follow might assist you in getting started. If you're interested in starting a business in India, you've already taken the first step towards being a Doer.
A startup is nothing more than a crop. You must sow the seed, nourish it, provide it with the proper conditions, and take good care of it. You will reap the benefits of your Labour in the end.
Before you achieve, you will need to put in a lot of effort, devotion, money, sleepless nights, and even some failure. This raises the question of how to start a business in India.
Don't worry, Corpseed is pleased to share its knowledge and experience in order to make this process a little easier and less stressful for you. The following is a step-by-step guide for planning a startup in India. We will help you with the ideas, strategies, networking, collaborations, legalities and finance for establishing your startup.
Read Our Blog: How to Start A Partnership Firm in India:-Procedure And Fees
A startup, according to the Indian government, is a company that is less than seven years old and has an annual sale of less than 250 million rupees and is based in India.
In India, many millennials are obsessed with startups these days. Many of them already have an idea in mind or are working on something that matches their passion and fills a market gap.
Today, Ola, Flipkart, Paytm, Zomato, and MakeMyTrip are companies that need no introduction. These are just a few of the most well-known members of the Indian startup ecosystem. They, too, started out little. For example:
- Ola started out without owning a single cab to reduce their overall start up and overhead costs while allowing them to be marginally flexible with their operating costs.
- Zomato is one of the most well-known and possibly one of the most successful food tech businesses in India, having grown into an international corporation.
- Flipkart was founded by IIT Delhi grads and former Amazon employees. What began as an online book store has grown to become India's largest online retail platform.
The Indian industry is booming right now, thanks to limitless inventions, a fresh approach to the business, and an influx of investors. Flipkart's success inspires new entrepreneurs to enter the startup market and prove their worth every day.
In 2017, NASSCOM claimed 1000 new additions to the Indian startup ecosystem.
Startups are getting increasingly popular. The Government of India, led by Prime Minister Narendra Modi, has launched and pushed the Startup India program to recognize and promote businesses in order to improve the Indian economy and recruit creative entrepreneurs.
The government's Department for Promotion of Industry and Internal Trade (DPIIT) established the Startup India initiative in 2016, with the goal of supporting entrepreneurs and creating a healthy startup ecosystem.
Under this scheme, startups must register with DPIIT and satisfy other requirements in order to receive certain perks, including:
- From registration to basic infrastructure setup, the work processes are being simplified.
- Providing financial assistance to entrepreneurs through various government-run startup funding programs.
- Assisting the founders in expanding their network and taking advantage of government opportunities.
- Income tax exemptions, intellectual property privileges, and a few additional perks and benefits are available to early-stage startups.
According to the DPIIT’s recent announcement, around 28,000 startups have registered with the DPIIT until February 1st, 2020.
And up to half of India's 1.3 billion citizens are thinking about taking advantage of the government's program and starting their own business! It's fantastic!
To be honest, there is a lot of competition, and to succeed, you must be extraordinarily competent at what you do. So, if you're one of those entrepreneurs, this guide will walk you through the process of building a startup firm in India.
Before you begin working on your startup concept:
Before we go into the ‘how to establish a startup' part, there are a few things to consider. Before you begin working on any startup idea, you must ensure three things:
- Your startup concept should excite you, and it should be useful enough to fill a market niche.
- You'll have to put in a lot of effort, and it'll probably be more difficult than you anticipate.
- Accept setbacks and don't quit up when things don't seem to be working.
Step by Step Guide:
Step 1: Making a Business Plan:
- It's one thing to have a concept, but it's quite another to have a solid business plan.
- We'll go into the financial side of beginning your startup firm later, but you'll need money to start and run a company. You have a considerable edge if you have a good business plan.
So, how do you go about creating a business plan?
A business plan is simply a written statement of your company's future. You make a plan for what you want to do and how you want to do it. These plans usually cover the first three to five years of your company's strategy. The business plan should be the first item on your to-do list because it will aid you in completing the other phases.
A distinctive idea is the key to any successful business. So, how do you come up with the idea for a startup? What drove Jamsetji Tata to seek out one of the world's most prestigious automobile companies? What prompted Dhirubhai Ambani to create a corporation worth billions of dollars?
If you look closely at all of these sectors and their founders, you'll see one thing in common: they all saw a problem that many people in their surroundings had. They investigated the issue and devised a remedy. That's how it all began!
Create your Pitch:
This is critical if you want to obtain any funding. Create a confident pitch that can persuade anyone to invest in your funds after you've defined your USP.
Let's go on to understanding the inner fabric now that we've established the exterior lining of starting a business in India. You don't have anything except one idea before you recruit people, rent a facility, or even ask for money.
Every startup starts with a single idea backed by a vision, and we can grow an empire with that vision. But first, let's concentrate on the concept.
Step 2: Secure Appropriate Funding:
- To get your business off the ground, you'll need enough money. There is no universally applicable number for all enterprises. Startup costs will definitely vary by industry, thus depending on the situation, your company may require more or less money. It may only cost a minimal amount for a modest, part-time business with no equipment, employee pay, or overhead to worry about.
- Over the previous decade, India's funding situation has drastically transformed. Previously, Indian startups had only the options of borrowing money from family and friends, taking out a long-term loan from a bank, IPOs, and borrowing from other institutions such as IDBI, SIDBI, and IFCI. In late 2007, the SEBI (Venture Capital Funds) Regulation, 1996 provided capital finance to India, as well as the angel investor community. In India, there has recently been a cascading impact in the availability of venture capital. From seed to fruition, from A to C.
- SEBI issued the SEBI (Alternative Investments Funds) Regulations for the first time in 2012, with the goal of defining and introducing AIF as a new asset class and encouraging external investors to invest in the secondary market.
Step 3: Surround yourself with the right people:
While launching a new company, you will require assistance.
So, where should you begin?
- When entrepreneurs are just getting their business off the ground, certain people are frequently forgotten. Sure, you may realize that you'll need some support running your business, including some employees and a management. Is that the end of it? How many personnel will you require?
It is determined by the industry.
- This is a question that may have occurred to you as a startup founder. Who can I ask to be my partner in crime? When two people join together, they can sometimes bring a lot of worth and experience to the table.
Finding a Great Co-Founder:
When looking for an excellent co-founder, be sure that he or she has a different skill set than you. As a result, you'll be able to contribute equally to the startup. In the end, the startup will benefit from both co-founders' contributions.
Consider the following scenario: you are a developer with an original product idea. However, you may not be very good at negotiating, knowing the legalities, or even employing people.
If your co-founder lacks these skills as well, you'll both end up spending the company's limited resources on new hires. And capital is one of the most essential variables in a startup's long-term sustainability.
Some considerations you must take when looking for a co-founder:
Step 4: Finding Location and building Website:
- A physical address and a web address are required for your new business. You'll need to acquire or lease a property to run your firm, whether it's an office, retail space, or manufacturing facility.
- It is unlikely that all entrepreneurs will be able to invest the majority of their wealth in real estate. This is something you should plan for in your company plan. Attempt to get sufficient funding to enable you to purchase property. It's a wise investment that will pay you in the long run.
- You will also require the creation of a website. Get your website up and running now, rather than waiting until your company formally debuts. It's never too early to begin marketing your company.
- If people are looking for a service in your industry online, you want them to know about you, even if you aren't yet open for business. You might even be able to make money from your website. Start taking pre-orders and making appointments if it's appropriate.
You'll need to grow your digital presence after your website is up and running.
Make use of social media sites such as:
These sites are used by your potential clients, so you should be there as well.
Step 5: Become a Marketing Expert:
You should become a marketing specialist if you aren't already one. Your startup may have the best product or service in the world, but if no one knows about it, it will fail.
Learn how to employ digital marketing strategies such as:
- Marketing with content.
- Affiliate marketing.
- Marketing via email.
- Search Engine Optimization (SEO).
- Social Media Marketing (SMM).
- Search engine optimization (SEM).
- Pay-per-click marketing/advertising (PPC).
If you're beginning a small business in your neighborhood, you can use some more traditional tactics, such as:
- Print Advertising.
- Radio Advertisements.
Step 6: Build a Customer Base:
- The good news is that if you follow this method step by step, you'll be well on your way to establishing a consumer base.
- Creating a website, expanding your digital footprint, and becoming an adept marketer are all positive milestones.
But now it's time to put all of your hard work to the test.
- Open your doors (or your website) to the public.
- The first stage is to get a customer to buy anything.
- However, this is insufficient. You must keep your clients coming back by creating your goodwill in the market.
- This remark is valid for both physical store locations/companies and e-commerce enterprises.
- Your primary focus should be on the consumer. They are the lifeblood of your company, and they must be treated as such.
- You can take advantage of your steady customer base once you've established it.
Step 7: Prepare for the Unexpected:
- It won't be easy to start a business, and you'll have to prepare for some setbacks along the way.
- Allowing these speed bumps to become barriers is not a good idea. When things go wrong, you can't get discouraged. Maintain your composure and persevere. The challenges you'll face as you launch your startup company will help you prepare for the long road ahead.
- Even once your firm is up and running, it won't always be easy sailing for the rest of its existence.
Startup Registration in India:
How to Register a Startup in India online?
There are two things to keep in mind here:
- the first is to incorporate your company.
- the second is to register it with the Startup India Program.
Obtaining the Digital Signature Certificate and Directory Identity Number is part of the process of incorporating a startup or a firm.
After you've incorporated your company, you'll be able to apply for the Startup India Program. Corpseed will help you in comprehending the procedure for registering your company with the program.
What are the benefits of Registering your Startup?
Benefits of Registration under Startup Indian Scheme:
- Self-certification: Compliance under 9 environmental and Labour laws
- Tax Exemption: Income Tax exemption for a period of 3 consecutive years and exemptions on capital gains and investments above Fair Market Value.
- Easy Winding up of Company: Within 90 days under Insolvency and Bankruptcy Code, 2016
- Startup Patent Application and IPR protection: Fast track and up to 80% rebate in filing patents.
- Easier Public Procurement Norms: Exemption on EMD and minimum requirements. Get listed as a seller!
- SIDBI Fund of Funds: Funds for investment into startups through Alternate Investment Funds.
Documents required for Startup India Registration:
- A recommendation (regarding innovative nature of business) from an Incubator established in a post-graduate college in India, in a format specified by the department of Industrial Policy and Promotion (DIPP).
- A letter of support by an incubator, which is funded (in relation to the project) by Government of India as part of any specified scheme to promote innovation.
- A letter of recommendation (regarding innovative nature of business), from an Incubator, recognized by the Government of India in DIPP specified format.
- A letter of funding of not less than 20% in equity, by any Incubation Fund/Angel Fund/Private Equity Fund/Accelerator/Angel Network, duly registered with SEBI that endorses innovative nature of the business.
- A letter of funding by Government of India or any State Government as part of any specified scheme to promote innovation.
- A patent filed and published in the Journal by the Indian Patent Office in areas affiliated with the nature of the business being promoted.
- Incorporation/Registration Certificate.
- Description of your business in brief.
- A brief description of the innovative nature of your products/services.
Applicable Laws for building a Startup:
- You're bound by a slew of rules when it comes to raising capital. The Companies Act 2013, Companies (Acceptance of Deposits) Rules 2014, SEBI (Alternative Investment Funds) Regulation 2012, SEBI (Venture Capital Funds) Regulation 1996, to name a few.
- To spare yourself a massive trouble in the future, be sure you follow the rules when raising funds for your startup. Reading from a variety of sources or enrolling in a course can provide you with a full understanding and help you avoid future disasters.
This brings us to the end of the complete guide on how to plan a startup in India. We've covered everything you need to know, comprehend, and put into practice in order to run a successful business.
And if you're wondering when you should start your business, remember that “any time is a good time to start a company,” as Ron Conway so eloquently stated.
We've attempted to cover all you need to know about starting a business in India. If you have any further questions, please contact us at firstname.lastname@example.org.
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This portion of the site is for informational purposes only. The content is not legal advice. The statements and opinions are the expression of author, not corpseed, and have not been evaluated by corpseed for accuracy, completeness, or changes in the law.
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