It is estimated in a survey 30% of startups fail because they run out of money.
You won’t believe, most startups owner are not CEO of their company.
In India, women entrepreneur grow from 10% to 14% in past 2 years. This is considerably a faster rate.
Startups are the backbone of country and show the potential of country to grow from a developing country to a develop country.
Most of the startups receive funds from government schemes, which enhance their growth potential.
On 16 January is celebrated as National Startup Day, in India, and this statement was delivered by our honorable prime minister Narendra Modi.
In India, startups has grown over 60,000 from less than 500 in just five years, yes this is extraordinary, and we Indians are extraordinary people.
How will you start your business? The answer to the question is given below.
We are living in modern society and will serve to society, so we have to make our presence on both digital and real world.
In fact, most of the startups gain consumers on social media platform, so you can certainly determine the potential of social media platforms.
Moreover, customers are repeatedly shopping online, so if you want to increase your profit margin you have to display your digital presence.
With the help of blog, search engine optimization, increase your visibility on Google searches, and use the full potential of social media platform to enhance your startups.
Don’t forget to check upon legal procedure, which is extremely useful.
What is startup?
A startup is a young company with one or more than entrepreneurs to develop a unique product or services that is irreplaceable in market.
In simple terms, initial stages of business, are known as startups. Entrepreneurs develop a new product and services which they believe are in demand in the market.
Startups, take into consideration before incorporating their business, like, location, market, fund, etc.
- In India, in legal terms, those companies who fall under the below list are known as startups:
- Age of company- The date of incorporation must not exceed 10 years
- Type of company- Should be incorporated under:
- Private Limited company
- Registered Partnership Form
- Limited Liability Partnership
- Annual income – Should not exceed more than 100 crores in any of the financial year from date of incorporation
How to start a startup?
What cost a startup to come into existence? Patience and determination.
Below mentioned points you must keep in mind before you start your journey.
1. Prepare a brain wave innovation
Startups refer to introducing something new to the market to consumers. You have to formulate solutions of unidentified problems.
Look for problems you are facing and jot it down in a paper. Choose the problem that is messing with your mind. Find an exemplary solution for the problems. This is how you will get to know, from where to start?
Moreover, your innovative ideas don’t need to be new one. You can add your ideas into the existing product or services. You can change the appearance, update the product or find a new way to use the product.
2. Put together your business plan
Plan out the outline for a maximum 3-5 years. You have to write down the business description you will be conducting.
Your business description must consist of finances, operations, men and material – which are necessary. Rest you can add it in the description list.
3.Accumulate your funds
Most entrepreneurs invest their own savings in their startups. It is not necessary that you have to fund your startup with your money in your pockets.
This step will notably cost more time. There are numerous mediums to generate funds.
- Angel Investors
- Venture capitalists
- Capital of startup depends upon the nature of startup, location, types and many more factors.
For large scale startup, you will need angel investors as a primary source of fund generation.
Pitch your idea in front of investors in an efficient way, make them understand your 5-10 years future goal.
Make sure your presentation must contain all relevant details about your product. Do include graphs, as it will persuade investors to invest in your startup.
if you depend on banks for your large scale startup they will charge higher interest after certain time duration.
But if you want to start with a low scale, my suggestion would be, go with the option Friends and family.
4.Encircle yourself with right people
Your environment is highly impactful on your startup. Make sure you surround yourself with the right people and have a high thinking knowledge.
- Come in contact with people like:
- Financial Advisor
- Virtual specialist
Lawyers are best for explaining tax obligations and legal requirements to start your startup. Financial advisor, will inform you how to arrange your finances, help you maintain in books of account.
5. Good marketing plans
Marketing plans must be considered as crucial step. This step has the power to turn the tables. Moreover, you have to increase your visibility in digital as well as physical world.
- I hope most of you know the answer to promote your product in real world;
- Radio advertisement
- Printing advertisement
What about digital marketing?
Numerous steps can be performed on this platform, including
- Email Marketing
- Social Media Marketing (SMM)
- Affiliate Marketing
- Search Engine Marketing (SEM)
- Search Engine Optimization (SEO)
- Content Marketing
- Pay Per Click Advertising (PPC)
Every startup requires different amounts of money and time to market itself. With suitable market planning your product can grab the attention of consumers.
Stand out from the competition and make sure you set up your startup brand identity. If you keep yourself as an average in the marketing field and want someone else to do marketing.
You have to hire marketing professionals and allow them to do their part in marketing. You have to allocate a separate fund for the marketing department.
Without customers no business can stay in the long run. If you want your business to be successful for a longer period of time, keep calm and read till the end.
You have to provide outstanding product or service to get in hold of your customer. Today’s market is customer oriented not product.
So you have to devote your time to customers to get hold on to them. Your customer service must be terrific.
Construct a strong customer base, give loyalty discounts to your customers who are regular, send message to customer on occasions.
Want to know the secret towards grabbing every customer interest in your product; send a well-wisher message on their birthday, and see the sales increase drastically.
7. Formulate plans for unexpected situation
First few years of startups are very severe, they lack knowledge of market trends. A key to success is, you have to adapt accordingly to the dynamic environment.
How to acquire knowledge regarding dynamic environment?
Don’t worry, just read.
Prepare yourself for hurdles and obstacles that are coming in your way.
Appoint high thinking people
Pay attention to feedback of customers, suppliers, and other in your organization
Make yourself updated with market trends and industry
What is the difference between business and startup?
If you think business and startup are same, then your thought is inappropriate.
A basic differentiation, what i know, is startup brings unique product to market whereas business reproduce the same product that is already available in market.
Key elements to differentiate between startup and business are as follows:
Startups create something new for the market or modify the old product, which is appreciated by consumers. They develop special product which tempt people to purchase the product or avail the services, with right factors applicable.
In business, it is not necessarily, to create a distinctive product, you can open bakery shop, or hardware shop, and so on.
Startups face more risk than business, they are new in market and certainly face problems related to explanation of their product to new people. People more likely to not engage in new product they are always not ready to take risk.
Business rely more on banks loan, self-funding, family and friends support, and credits.
However, in startups, venture capitalist or angel investors are most reliable source of funding. Crowdfunding is developing means of funding in current period. If your product and service something mind boggling definitely try this fundraiser
Startup always focus on instant growth and development. They are impatient for achievement of goals and objectives. Their goal is to disrupt the marke and portray their product and services worldwide.
Business are for society and they work for society. They don’t focus to shake the market tower, their desire is to setup the business and search for market to sell their product and services.
Startups want immediate growth and development. They are not willing to grow in long period. As mentioned, they want to shake the foundation of market by presenting their unique product in the market and crave sudden growth.
Startups desire to expand their company, market, customer base, and to diversify their product.
In case of, business, it wants to generate regular cash flow to eliminate the debt pile. They are patient enough to grow their business on an good speed.
How is Indian government is helping to grow startup?
Startup India Scheme is an initiative by the Government of India for generation of employment and wealth creation.
The goal of Startup India is the development and innovation of products and services and increasing the employment rate in India.
Benefits of Startup India Scheme is Simplification of Work, Finance support, Government tenders, Networking opportunities.
Startup India was launched by Prime Minister Shri. Narendra Modi on 16th January 2016.
Let us learn more about Benefits and Eligibility of Startup India
The Startup India Scheme was launched by the honorable prime minister of India “Narendra Modi”, Indian government in 2016.
The promotion of startups, the creation of jobs, and the creation of wealth are the primary goals of Startup India.
Startup India has launched a number of initiatives designed to encourage a healthy and growing startup ecosystem and generate jobs for job seekers.
Startup India Scheme is managed by the Department of industrial policy and promotion (DPIIT).
Benefits of Startup India Scheme
1. Income Tax Benefit
Under the Income Tax section, startups get a lot of help. After the incorporation year, the government authorizes them from paying income tax for the next three years.
They can also claim a capital gains tax exemption if they invest in specific funds.
2. Financial Benefits
The majority of the startups are based on patents. It means they create or provide unique products or services.
They must pay a significant amount of money to register their patents, which is known as the Patent Cost.
The government offers an 80% discount on patent costs under this programme. Furthermore, the patent registration and related processes are fast tracked for them.
In addition, the government pays the facilitator’s fees for obtaining the patent.
3. Government Tenders
Because of the high payments and large projects, everyone wants to get their hands on government tenders. However, obtaining government tenders is a difficult task.
Startups are given priority in government tenders under this programme. They also don’t need any prior experience.
Forming and registering companies is a long and lengthy process. Everyone considered registration process is complicated and time taking.
Under the Startup India Scheme, this problem is extremely eliminated from government end. At the Start-up India hub, a single meeting has been scheduled. There is also a single window for them to ask questions and solve problems.
5.Massive networking opportunities
Networking opportunities refer to creation of networks for new ventures and an opportunity to meet with numerous entrepreneurs and businessmen at a particular place and time.
The government facilitates this by hosting two startup festivals each year (both at domestic as well as the international level).
Intellectual Property workshops and awareness are also provided as part of the Startup India programme.
How can a startup can get help?
You have to follow the below mentioned steps, in order to receive a helping hand.
1.Tabulet business plan
Create a detailed business plan of your product. This is a crucial step towards aiding your business. You must know how to operate your business.
Categorize your finances accordingly. Your business plan is the description of product or services you are going to offer to your customers and investors.
You must conduct market analysis to get a better picture of your product.
Don’t forget to check on your competitor’s product and targets.
Set your organizational structure; decentralized or centralized.
Check out your requirements of different kinds of roles for managers.
Most importantly, you must analyze your finances upto 3-5 years. To get a clear picture of a startup
You must keep a reasonable amount of money to conduct your business operation. Starting stage possibly be difficult for banks to lend you money.
Moreover, banks ask about the amount of capital you would be investing in your startup.
So in your initial stages, self funding is best option, and after that you can take loans from bank without any disturbance as they will see your business stability and low risk factors.
- Dip into your personal savings as this factor allows many benefits to you, including;
- You don’t have to create any shareholder
- All profits are yours not investors
- No credit leads to no interest
- Eliminating debt trap
Crowdfunding means to accumulate funds from multiple investors or people through social media platforms or web platforms.
This concept or idea helps in the raising of funds for new businesses or first-time entrepreneurs, as well as promoting social and cultural causes.
Some platform raise money through professional investors while others allow you to raise money through anyone.
Crowdfunding websites raise money for a variety of causes, including social causes, charities, ideas, disaster relief, and events.
It can lead to overnight growth and success to your startup. You can raise capital from crowdfunding business.
4. Angel investors
Angel investors can give you an equity stake in your company in exchange for their money, but they can also give you convertible debt.
People with surplus cash are known as angel investors. They act as a godmother for your startup. They are interested in funding startups. Angel investors demand higher profit onn their investments.
How to get in hold with angel investors?
Onboard on a coffee or a lunch elaborate your details business plan and your angel is ready for investments.
Make angel investors admire your plan, believe in your objectives, and believe that your company will succeed.
Venture capitalist are those a private equity investor that provides capital to companies with high growth potential in exchange for an equity stake.
A venture capitalist may be able to provide you with additional resources that will help your company to succeed.
They will regularly update you with benefit from their expert advice and management skills.But venture capitalist are more concerned with instant returns.
They will not wait for 30 years for returns on their investments. Most venture capitalist are interested in funding in softwares and technologies.
So, if you are opening a boot shop, i suggest fon’t approach for venture capitalist.
Peer-to-peer lending is a form of money lending in which there are no third party involved. They might be your family, friends, siblings, classmates, office partners,or your virtual friend who have faith in you.
It might be possible if a random person lends you money, they will expect a higher return in future. It is a safest medium of lending money and is beneficial to your startups. How?
Go with the flow, user.
You barely have to pay any interest on money that your family provided you. Although they will support you all over the journey to keep growing and flourishing.
7.Loans from banks
Banks are the first priority for startups to receive credit, before 20s era. This is a reliable and convenient source of loans to be granted.
All you have to do is, book an appointment call with loan officer, pitch your startup idea, elaborate the presentation in detailed manner, give your time to make decision and receive the notification of a debit of amount.
But in the same way, loans can also be rejected due to lacks of collateral and many more factors which are applicable.
To get more benefits in your business, Nothing could let down you!
Make Sure You’re Following All the Legal Steps
Opening your dream startup can be a lot of fun, from designing your product to setting up your office.
However, before you officially enter the market, you should take the necessary legal steps to ensure your success, including:
- Register for a startup license
- Submitting your startup name
- Obtaining your tax ID number
- Propose for a trademark
- Create a separate bank account for startup
- Update yourself with industry regulations
- Building contracts for clients
At the bottom line
There was an exponential rise in unicorn industries in India. There were 42 unicorn startups valued more than $1 billion in year 2021. This figure is insane.
And definitely promote you to introduce new products for consumers. Building a right startup team is extremely important, this will drive your startup up in the graph or make it grow in an average basis.