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Starting a business in India is a common aspiration for many budding individuals. If you decide to take the entrepreneurial leap, we have a comprehensive guide to how to help you become an entrepreneur in India.
Becoming an entrepreneur in India is a challenging journey that demands precision and careful planning at every step.
It requires not only education in your chosen field but also an innovative mindset, determination, and attitude.
Some entrepreneurs didn't have prior education or business backgrounds, making their stories particularly inspiring.
The key to their success is a straightforward one: they followed the proper steps, executed their plans effectively, face the challenges bravely and established their presence in the market.
An entrepreneur establishes and runs a business, taking financial risks in pursuit of profits, and the word "entrepreneur" finds its roots in the French term "to undertake."
In this article, we explore the concept of an entrepreneur, how to start your entrepreneurial journey, and how to become a successful businessman in India.
Below are steps on how to become an entrepreneur in India.
Step 1 - Discover a lucrative business concept
Becoming a thriving entrepreneur begins with identifying a product, service, or process to offer or enhance.
Reflect on the business sectors or fields that interest you or where you possess expertise, and contemplate the issues you could resolve or the demands you could meet by launching a new venture.
Step 2 - Enhance your knowledge and expertise
While starting a business often doesn't demand a formal education, numerous prospective entrepreneurs pursue a degree and accumulate practical experience in their chosen field.
For instance, if you aspire to launch a tech startup specializing in health and wellness apps, acquiring expertise in technology, health sciences, and app development could be helpful.
Enrolling in a university program focusing on digital health solutions might offer insights into creating a successful venture in this niche and securing financial support.
In addition to formal education, explore the wealth of inspiration available in books and podcasts accomplished entrepreneurs create.
Step 3 - Investigate and improve your idea
Every venture starts with an idea, but it's essential to take it further by investing dedicated effort and analysis and, most importantly, validating it through market research.
Determine whether your focus is on services or products, refine your idea, and gather comprehensive information. Understand your target customer base and study your competitors, including their branding and pricing.
Engage in formal research and pose questions like "Where do customers currently go for this product or service and why?" to gain deeper insights into your competition. Seek potential partners who share an interest in your business.
Another evaluation method is a SWOT analysis, which helps determine if your offering can thrive in the current market. Analyzing your concept will guide your next steps in its development.
Step 4 - Develop a comprehensive business plan
A well-crafted business plan is essential for defining your business strategy, attracting potential investors, and gauging your company's potential success. Start by identifying the initial costs of your venture and outlining your approach to marketing products or services to your target customers.
Consider dividing your plan into sections, including marketing, financing, and operations, to simplify the review process for potential investors. Additionally, research your competitors to understand their strategies and why customers choose them.
After thoroughly exploring and validating your idea through research, create a comprehensive business plan.
This document will serve as a roadmap for your business's structure, execution, and growth. According to the Small Business Administration (SBA), key elements to include are:
- Executive summary: A brief overview of your company's mission, vision, and objectives.
- Company description: Detailed information about your business.
- Market Analysis: Understanding your industry, competitors, and target market.
- Organization and management: Describe your company's structure and key team members.
- Service or product line: Details about your offer and its life cycle.
- Marketing and sales: Explanation of your promotion and sales strategy.
- Funding request: Clarification of the funding needed over the next 3 to 5 years.
- Financial projections: Presentation of financial forecasts aligned with funding needs.
- Appendix: Supporting documents like credit histories, resumes, product images, reference letters, and legal documents.
Step 5 - Source capital
At this stage, you must begin exploring avenues to secure capital for your business, as funding and fundraising play a pivotal role in business growth.
The initial phase of fundraising, commonly referred to as seed funding, is often followed by subsequent rounds such as Series A, B, and C.
Seed funding is the foundation for fundraising and can involve personal funds, business loans, contributions from friends and family, angel investors, or venture capitalists.
Step 6 - Determine your legal structure
Choosing the appropriate legal structure requires careful consideration of your company's financial needs, risk factors, and growth potential.
Depending on your business type and activities, you may need licenses at the local, state, and federal levels, along with specific permits for operations.
Some of the types of business are:
1. Sole Proprietorship:This involves a single individual owning and managing the entire business, making it suitable for one-person ventures.
2. Limited Company: A limited company establishes the business as a distinct legal entity separate from its owners, providing limited liability to the extent of their capital contributions.
There are two types of limited companies in India:
a. Private Limited Company : The company's members privately own shares, and public issuance of shares is prohibited.
b. Public Limited Company : Shares are publicly available for purchase, and capital can be raised through share issues.
3. Limited Liability Partnership (LLP): An LLP is a partnership arrangement involving two or more individuals with a shared goal of earning profits.
Step 7 - Manage finances
After establishing your business's legal structure, it's necessary to address critical financial and tax responsibilities. Financial planning is a fundamental aspect of launching a business.
Create a spreadsheet that forecasts your business costs and ensures you can cover ongoing expenses before becoming profitable, then Open a business bank account to secure your capital.
As a shareholder, owner, or director, you'll likely need to handle various tax obligations, file paperwork, and report accounts annually or more frequently.
You need a comprehensive accounting system for budget management, rate setting, business transactions, tax filing, and providing a clear financial overview of your enterprise.
It is essential you keep your personal finances and business expenses separately. As an entrepreneur you should have investments for financial stability and it shouldn't mix with your business expense
Step 8 - Business registration
The next step involves selecting a business name relevant to your business type.
Once you've chosen a name, it's essential to verify its availability and ensure it's not trademarked or currently in use.
Register the business name, and if your business has an online presence, don't forget to register the corresponding domain name.
To establish a bank account and file income tax, you'll need to provide proof of your company's existence, which includes PAN/TAN cards, company registration certificates, and Labor License/State registration.
Step 9 - Acquire licenses and permits
Depending on your business type and location, you may require various licenses and permits.
Research the specific licenses and permits relevant to your business during this process.
If your business involves intellectual property, consider trademarking and patenting to protect your brand, products, or services from unauthorized use.
Trademarking safeguards your brand name and prevents misuse, while patenting is essential for innovative technology or products, providing exclusive ownership rights and protection.
Step 10 - Implement and launch business
Once you've completed the necessary legal procedures, focus on launching your business.
Set up a business location, whether a home office, shared workspace, or private office.
Build your support team, including employees, consultants, freelancers, advisors, mentors, or business coaches.
Establish the required structures, processes, online tools, infrastructure, stock management, and vendor relationships tailored to your business's nature.
Step 11 - Market and Promote Your Business
Now that your business is running, it's time to attract clients and customers.
Leverage the marketing and sales strategy outlined in your business plan. With today's technology, promoting your business has become more accessible and practical.
Craft a compelling elevator pitch for your product or service, collaborate with influencers and other businesses, network, and build relationships to create a buzz in the market through various media channels.
These strategies will help you connect with potential clients and customers, ensuring your brand remains memorable.
In summary, becoming an entrepreneur in India is challenging but rewarding. It requires careful planning, continuous learning, and a systematic approach.
From identifying a profitable business idea to securing capital, choosing the proper legal structure, managing finances, and eventually launching your business, each step is crucial.
With dedication and perseverance, you can navigate this journey and increase your chances of success.
Remember that success doesn't occur overnight; it requires consistency and determination. Use the plan you've developed to continuously work on your business, improving your chances of achieving success.