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Introduction

Entrepreneurship is free! Anyone can start a business. It does not discriminate between education, experience, region or investment. All it needs is the passion, plan and perseverance of the individual. Many multi-billion dollar businesses have had humble beginnings; Bill Gates, Mark Zuckerberg and Jack Ma serve as an inspiration to crores of Indians looking to make a mark in the business world.

If you think you have the drive to start and run a successful enterprise, chances are that you become a million-dollar business in the near future.

However, there is a lot of ground work needed before you can launch your business. Businesses start as a spark, an idea, a potential that you see somewhere. It needs a lot of work in giving it a name, shape and structure. Here are some points for you to work on, before you can get your business started

Work On Your ‘Idea’

As mentioned above, any business is just an idea in the beginning. This idea triggers something in your mind and you hold on to it. Then comes the evaluation stage;

  • What is the USP of your product or service?
  • What problem is your product or service going to address?
  • Who will be your end users or consumers?
  • Will it be your part time or full time business? 
  • Who are your competitors?
  • How do you plan to run the business, whether stores, online?

Working out these particulars gives you a great clarity on your business. You are then ready to move on to the next step.

Decide Your Business Structure

Once you're confident of all the questions, the next move is to decide the entity form that fits best. In India, it is possible to register a start-up as a private limited company, limited liability partnership, partnership corporation, sole proprietorship and one individual company.

Private Limited Company: This is best if you are planning to seek funding from investors and venture capitalists, to get bank loans and to have shareholders. A private limited company is one in which, in the event of a financial crisis, the shareholders and owners are only liable to their shares. That is to say, they would not risk losing their personal assets. You need a minimum of 2 men, and a maximum of 200, to start a private limited company. The Companies Act holds provisions concerning private limited companies in India and all such entities must be registered with the Companies Registrar (RoC). It is also required to periodically file mandatory annual enforcement which, if ignored, may result in legal repercussions.

Limited Liability Partnership (LLP): Professional and consultancy firms that do not need equity funding may choose to register as an LLP. In comparison to a private limited company, LLP offers the benefit of flexible partnerships where partners can select their own internal structure and have fewer low-cost compliance requirements. In LLP, partners only have limited liabilities, depending on the jurisdiction. An LLP may have any number of partners, however during registration a minimum of two partners are required.

One Person Company: An OPC only has one director who is the sole shareholder. An OPC system has high conditions for compliance, and costs, and minimal tax benefits.

Partnership Firm: As the name suggests, it can be registered as a partnership firm if two or more people look to establish a small company. The Indian Partnerships Act, 1932 controls this type of entity and allows up to 20 partners. The terms and conditions are governed by an act of partnership, which both partners must sign. Partners cannot pass on their interest in the business to others without the approval of other partners. It is highly appropriate for small businesses, as debts can be recovered from partners' personal assets.

Sole Proprietorship: An individual who is the owner of the company and runs the business in a sole proprietorship is exclusively, directly responsible for business debts. Under the law this type of firm does not have a separate legal identity. By selling an interest in the company, the sole proprietors cannot raise money.

Making It Official

You will need to register the business once you have decided on the structure. The registration process may differ depending on the type of entity. Given below are the steps to register the most common type of private limited company entity.

  • Apply for Digital Signature Certificate
  • Apply for Director Identification Number
  • Check the company name availability
  • Apply for PAN (Permanent Account Number) and TAN (Tax deduction Account Number)
  • Get the Incorporation Certificate from the relevant authority
  • Open a current bank account

Government Registrations and other licenses

It is now time to get all the relevant government registrations and licenses required to run a registered entity. These vary depending on the place of business, sector or industry, type of entity, number of employees, etc. All incorporated businesses must apply for and get PAN and TAN. The former is compulsory for opening bank accounts and filing income tax returns and TDS returns, whereas the latter is provided for all tax deductions or collections performed by all businesses. GST Registration is mandatory for all companies with turnover in excess of 40 lakhs and Rs 20 lakhs in the "Special Category". Furthermore, GST registration is compulsory for companies engaged in the intrastate supply of products, irrespective of turnover.

Set up an Account Maintenance and Compliance System

An Accounting and Compliance system is one of the most crucial things in a business. Maintaining your books and financial records will help you study the cash flow, show stakeholders financial health, plan budgets, take key decisions, report profits and more.

Take Your Business Digital

In this digital age, building an online presence is absolutely essential to your company. Having an engaging website and social media accounts can help to highlight your services and products while attracting potential clients.

Employee Hiring

It is now time to start hiring people to help you run the business. There are a number of online resources to hire employees. Have a clear job description, roles and responsibilities, designations for each position before you start the hiring process. An inadequate team might hamper your progress in the initial stages, which could cost you dearly.

Intellectual Property & Rights

Your brand is your business and you have to protect it. Protecting intellectual property which includes trademark, copyright, patent, industrial designs, software, inventions etc., is important. If you don’t pay attention to these aspects now, you may face competitors with similar ideas or brand names poaching your customers.

Funding

Funding your business is an important aspect. These days, funding is available through different sources like Angel investment, Venture capital, crowdfunding, bootstrapping or self-funding, business incubators, bank loans, government schemes, etc. Research well in advance about all these funding sources to identify the ideal one for you. Preparing a strong business plan, market analysis, organization management, financial projections, marketing and sales strategies are important to impress potential investors.

Conclusion:

Starting a business takes considerable effort. It requires meticulous planning and organizing to launch your product or service. There are a number of resources available for aspiring entrepreneurs to kickstart their run in the business economy. If you are someone with the passion to run your own business, the sky's the limit!

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