One word that is doing the rounds, especially among youths is the word “Startup”.
So, what is a Startup? what are the eligibility criteria’s for a venture to be called as a startup in India? and last but not the least how to open a successful startup in India? are definitely some questions occurring in the mind of every young and enthusiastic entrepreneur.
We have published this startup guide to answer these questions and also to provide a roadmap on how to launch a successful startup in India?
What Is A Startup In India?
There are so many theories like these describing startups in their own way but on a whole, a startup is a venture of entrepreneurial minds who starts small with a goal to bring a difference in people’s life and society. They aim at solving people’s problem by making unique products and services and developing a viable business model around it. The stepping stone to a big business is a startup.
What Is The Eligibility For Startups In India?
Not every business is a startup. So, the question arises how do we know if a venture is a startup or not. The Startup India initiative by the Government of India has defined the eligibility of startups in India as follows :
- Startups should have been incorporated and 7 years must not have elapsed since the startup has been incorporated/registered.
- Any organization if split into two or more organizations, doesn’t qualify to be called a startup under this scheme.
- Annual Turnover of the startup should not have exceeded 25 crores in any year since its inception.
- Working towards innovation, development or improvement of products or processes or services
- If it is a scalable business model with a high potential of employment generation or wealth creation
Now, glance through the 8 step startup guide provided below to understand the process of starting a startup in India.
Step 1 – Generate An Idea To Solve A Problem
The very first step to start a startup boils down to doing your “homework”, i.e. market research well in advance. Identify a problem, do background research and on that basis decide for the product/service you would want to offer as a solution to the problem.
Click To Know How To Validate Your Startup Idea
Step 2 – Build A Concrete Business Plan
Once research is done, finalize the 4P’s (Product, Price, Promotion, and Place). Entrepreneurs should also finalize their mission and vision statements, think of a unique company name and get a logo designed. If need be, look for a co-founder and then, finalize your business plan keeping everything in mind.
To sum up, Business plan acts as a roadmap for you, your startup and employees in the long-run. It keeps everyone going through the establishment phase.
Click here to learn How To Make A Startup Business Plan.
Step 3 – Arrange Your Finances
How can any business survive without enough capital? And not every entrepreneur is a billionaire to self-fund his/her startup. Planning finances or let’s called it funding, becomes equally important. There are various kinds of funding –
- Self-funding: wherein your savings are to the rescue
- Bank loans: borrowing money from the bank at an interest
- Investor funding (the most common type of funding) which involves pitching your idea to the potential investor and convince them to back-up your business, financially
Once an investor plans to invest in your venture, decide on the profit percentage and investment ratio to keep things in place and to maintain transparency.
Step 4 – Form Your Company
Once a business plan is finalized and funding is done, now is the time to register your company. Once registered, every company should apply for its PAN and GST number and also get a bank account in the company’s name. Get an accountant to manage your accounts and someone who is familiar with the startup laws to let you claim deduction and avail other benefits offered by Government of India.
Step 5 – Create your Ultimate Team of Experts
This again is an important step. As per the skills needed, hire the right employees and get your team ready as they are the backbone of any big or small business. You can also start with renting out an office space instead of spending considerably on a private space. Always, keep your employees motivated.
Step 6 – Utilize Modi Government Initiatives
The government of India has launched various schemes and provided much of benefits for the startups and entrepreneurs. It is therefore recommended to look out for those and avail the benefits of the scheme by the government. The “Make in India” and “Startup India” move by the Indian govt. is highly appreciable. Here’s to all the entrepreneurs, Make India proud!
Step 7 – Launch Your Venture In The Market
Once the team is ready, start creating your product/service. Now is the time to decide the launch date of your product/service in the market.
Also, create a marketing plan. In today’s time, online and offline marketing is the key to improve your sales as it reaches masses of people within a short amount of time and with limited personnel. Establishing an online presence for your business helps you earn the loyalty of customer for your startup and gets you engaged with your customers on a regular basis in an efficient manner.
Step 8 – Maintain Personal & Professional Life Balance
Personal and professional lives may be different but for an entrepreneur in his initial days, personal life takes a setback. He/she should realize this and work with his/her family and gather their support. As an entrepreneur do take time out for your loved ones as it’ll keep you and your relationships intact and refreshed. It might be tough but maintaining a work-life balance is advisable.
Now, what are the different models of startups possible?
Three Types of Startup Models
- B2B: Business-to-Business Startup, i.e. as an entrepreneur yourself, you sell your products or services to other businesses. A perfect example would be an Event Management company which helps other businesses to organize and manage their corporate events, exhibitions and so on.
- B2C: Business-to-Consumer, wherein the startups offer products or services directly to its potential clients. Startups like Flipkart are a perfect example of this model of startup.
- C2C: Consumer-to-Consumer, wherein two consumers connect to exchange/buy/sell products. To understand this better, think of Quikr.com, you, a consumer, want to sell your washing machine and another consumer wants to purchase it. So, here, Quikr bridges the gap between the two. These types of startups are known as a C2C type.
Last but not the least, what is the …
Difference between a Startup and a Business
|It is riskier||It is less risky|
|Requires huge capital to establish||Does not require a huge capital to establish|
|You need to create a completely fresh product/service||Creating a fresh product/service is not necessarily required|
|It does not yield profit from the first day||It can be profitable from the first day itself|
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