There is this common misconception in the minds of many that Starting and Setting up a business is a very tedious and difficult task. But, if you follow these 10 steps correctly then it will be a flawless and amazing process. All your questions such as How to start a business? How to register the company? How to do advertising? and many others will be answered in this article. This step by step guide to successfully start a business will surely help all you aspiring entrepreneurs reading this.
Starting or Setting up a business often does not require any such special legal or advance technical knowledge. If you believe in an idea and are willing to work hard then a guide or an article like this could help you achieve your goal. After reading this article you will get enough information and knowledge to start up your own business and make it successful.
1. Idea
Every business starts with an Idea. You either have an Idea or in a process of developing an amazing business Idea. It is very important to have a business Idea that is unique yet problem-solving.
How to develop a Business Idea? – you can get your business idea in two ways.
Unique Idea
You have a unique business idea that will create a new market of its own, this would be an amazing adventure because you are walking on a path no one has ever walked before. It is rare, hence is dicey to successfully execute this type of Business Idea.
You can get your unique business idea by simply solving an existing problem in the market. You can look around yourself and find that one problem that you can solve and monetize the solution.
The best example in this technological age is Amazon, Uber, Zomato, Google, Apple etc. all of them observed some problem with the existing market successfully solved it and monetized it.
Existing Idea
This is the most common way many businesses are started. An existing business idea that is tried and tested and is successfully making money is used to start the business.
This type of idea lacks innovation and creative thinking and is based on the model and principals of the existing business. The chance of this type of business getting successful is high as one can easily refer the business operations and decision making of the existing successful business.
But this type of Idea comes with competition as an obstacle to growth and success.
Now, once you have developed the business idea, it’s the turns to do some research on the Idea. For, example if you have a unique app development idea, then you are obligated to follow strict and accurate research of the idea. Because while in the process of building a business based on a unique idea, even the smallest mistake can come at the cost of failure.
2. Idea and Market Research.
Idea and Market Research is one of the most important steps and can be considered as the first step towards building your business. As they say “Research is the distance between Idea and Realization”
Idea Research
Idea research is the process when you carefully analyze the Idea you have developed. It is an important step as in this step you have to carefully evaluate and consider the following aspects of your Idea.
- Feasibility
- Total Investment Required
- Market Demand
- Strenght of the Idea
- Weak Points of the Idea
- Risks Involved
The answer to the above points will help you further proceed with your plan. As these points cover the basic structure of your business. These points help in developing the Business Plan.
Market Research
Market research is the process wherein you analyze the selling and buying forces and all the other factors influencing them. In this process, you need to analyze the following points.
- Current Sellers in the market
- Buyer demographics (Age, Gender, Profession)
- Influencing Factors ( Government policies, Foreign investors Etc.)
- Current need of the buyers
- Current flaw/problems in the buying and selling process.
- The demand of the Buyers
After doing the market research successfully and covering all the above points you are now ready to move to the next step and that is
3. Product/Service Development
In this step, you have to develop that service or the product that you are actually going to sell to the customers. The process of the product/service development includes
- Creating the first version of the Product
- Testing the first version
- Creating other versions (Until the desired result is achieved)
- Testing the final version
- Naming the product
After deciding the final version of the product that you wish to sell and launch and selecting the name of the product. You move to the fourth step
4. Making the Business Plan
The business plan is the core of any starting business. The business plan is what the company has to follow strictly to achieve its goals. A business without a business plan is a gamble. The benefit of having the business plan ready is that the business plan helps you as a guide in your journey to set up the business. It helps the business to not wander around clueless and make hasty and loss-making decisions. Creating a business plan must include the following points.
- How to raise funds?
- How much to spend on marketing?
- The strategy of the business
- Gestation period
- Loss-making period
- Place of business
- Target audience
- Price of the product
- Investment decisions
- Your role in the company (If you want to build and sell the business or continue in a role)
- Government Policies (Laws and Licence affecting your business)
- Licences Required
- Whether Patenting is required
- Profit Estimation ( Forecasting the time and amount of profit)
You can develop your plan by using all of these points or some of these points. But I assure by making a business plan either buy jotting It down on a paper or not, you will be relieved from making regretful wrong decisions in your business.
5. Company Name and Registration
This the most interesting step. In this step, you have to decide the name of your company and register it with the authorities.
How to decide the name of your company?
Name of your company is something that is both Emotionally and Professionally crucial. As in most cases, business names are not changed that often and so the name you pick should be bold, expressing and easy to remember. If possible the name should express your business like Chipsico, Cardekho.com, Policybazzar.com etc.
The name should be unique and must not be confused with other existing companies. The name should not be too long maximum 6-7 letters long. It should be catchy, try to choose the name that has some actual meaning.
Once you have decided the name of your company and created a logo its time to register your company. Typically there are two ways of registration:
i. Company Registration
Company Registration is when you register the company as a business entity. In company registration, you register the name along with your Business. In India, there are several ways in which you can register your company. They are:
- Public Company (Ltd.)
- Private Company (Pvt. Ltd.)
- Limited Liability Partnership (LLP)
- Single Person Company
- Joint Hindu Family
- Nidhi Company
- Co-operative Society (Company)
- Sole Proprietorship
There are also many other forms of company registration, these are some of the widely and commonly used forms of registration.
For a small startup, you can opt for the Udyog Aadhar Registration. This under the MSME scheme and will provide your business with a Sole-Proprietory Business status.
Also, you can take the benefits of the MSME schemes once you are registered to Udyog Aadhar.
ii. Company Name / Brand Name Registration (Trademark)
Company name registration is registering the name of your company or the brand name you are using. For example, if you start a company with the name of Alpha Corp. as a sole proprietor and if you desire that no other business should operate with this name then you can register this name with the Office of the Controller General of Patents, Designs & Trade Marks Department of Promotion of Industry and Internal Trade, Ministry of Commerce & Industry, Government of India. (Intellectual Property India). under the Trademark registration. You can visit the ipindia.nic.in
If you register for the trademark of your name and logo and if your application is approved and registered. You are legally protected for your business name and logo. And no other company in India can legally use this name to carry out their business. (T&C)*
6. Opening a Bank Account
Opening a Current Bank Account is an important step, as this current account will be used to carry out all your business transaction and to pay taxes.
For any business transactions, you should only use the current account as it provides some of the special facilities for the business, that are not available in the savings or any other bank account.
The documents required to open a bank account are as follows
- Any two of the following documents as proof of business/ activity in the name of the proprietary firm:
- Certificate/licence issued by the municipal authorities under Shop and Establishment Act
- CST/VAT/ GST certificate
- Certificate/registration document issued by Sales Tax/Service Tax/Professional Tax authorities
- IEC (Importer Exporter Code) issued to the proprietary concern by the office of DGFT/ Licence/certificate of practise issued in the name of the proprietary concern by any professional body incorporated under a statute
- Complete Income Tax Return (not just the acknowledgement) in the name of the sole proprietor where the firm’s income is reflected, duly authenticated/acknowledged by the Income Tax authorities
- TAN Allotment Letter issued by NSDL in the name of the firm
- Certificate/ License of Registration under any specific Statute/Act of the government
- Utility bills such as electricity, water, and landline telephone bills
- Identity and Address of the Sole Proprietor:
- Passport
- Driving License
- Voter ID card
- Aadhaar card
- PAN card
- Letter issued by the National Population Register
7. Opting For Licences
Most of the businesses in India are governed with some kind of licences. And it is obligated for the business to procure this licence. Some of the common licences are as follows:
- Shop and Establishment Licence.
- GST Registration Licence. (Certificate)
- FSSAI Licence.
- Import Export Code.
Shop and Establishment licence is applicable to all the commercial establishments or shops nationwide.
GST registration is not mandatory in India. Except under the following conditions:
- Inter-State Sale of Taxable Goods
- Turnover exceeds the prescribed threshold limit (₹40 lakhs for goods and ₹20 lakhs for Services)
But you can also voluntarily register for taking advantage of ITCF (Input Tax Credit Facility).
A small startup with annual turnover between ₹40 lakhs – ₹1.5 crores can opt for Composition Scheme, as the compliance under this scheme is simpler and lesser returns are to be filed.
FSSAI registration is now compulsory for all the Business dealing in Producing (for selling) any Food and Beverages or Medicinal items. If your business is dealing with anything that is to be consumed directly than consider researching if your business needs an FSSAI licence.
Import Export Code is the Unique 10-digit Number code that your business has to procure if it has to deal with the foreign countries and trade globally. It is like a PAN card number. And is used for taxation purposes. It is issued by Director General of Foreign Trade, Department of Commerce, Government of India.
It is always advisable to research well on the licence required in your field to avoid any legal obligations in the future.
8. Product/Service Launch
Finally after completing all of the above steps you are ready to launch your product in the market and start generating revenue. There are some of the tips you must follow on how to launch your product in the market:
- Launch the product with a unique and easy to remember name
- Avoid copying names from existing products
- If a physical product try to reach out to maximum retailers in a particular region
- Set reasonable price of the product
- If possible the price should be lower than your competitor
- Packaging of the product should be attractive and colours and designs should be selected accordingly
- Never try to oversell the product
- Do not overproduce the product (Avoid creating a dead stock)
- Give some luring offers to the customers
This tips will help you successfully launch your product. But the next two steps below will make sure that you continue to be in the game, and not be a “One Hit, Wonder”.
9. Marketing and Advertising
In the beginning, you need to allocate at least 15% of your spending (Budget) towards advertising. later you can reduce it to 10% or below totally depending upon your budget, plans, goodwill, and market share.
The crucial decision is to choose the platform of advertising, you can choose typically from digital or offline platforms. This totally depends on your targeted audience.
If you are selling FMCG or Old School Products then you should prefer:
- Retail Display Advertising
- Retailer Margin Sharing
- Retail Shelf Positioning and Ad Boards.
- Brochures & Flyers
- Facebook Marketing (Targeted)
- Discounts
- Cashback offers
- Sampling and Free Product Testing
- Increase Number of salesmen
- Increase Salesmen Commissions
- Partnering with digital partners such as (Indiamart, Amazon, Flipkart etc.)
If you’re dealing with Services and Digital Products:
- Facebook Advertising
- Instagram Marketing
- Email Marketing
- YouTube Advertising
- Website Promotion (Google Ads)
- Search Engine Optimization
- Partnering with digital partners such as (Oyo, Swiggy, Zomato, Amazon, etc.)
10. After-Sale Services and Customer Support.
This is the last but not the least, Taking this step for granted can cause you irreversible damages.
Every product sold is never 100% perfect, “millions of minds can discover billions of new problems” so it is very important to have an after-sale service department and Customer Help Facility.
If your product demands After-Sale Services such as repairs, replacement or returns then you should open a window for after-sale services.
If you selling your product with no warranty and guarantee, it’s acceptable but if you are unable to provide customer support and solve their problems, the customer will move away.
So if you are not able or required to set up an After-Sale service centre. You should have a responsible, polite, short-tempered, highly professional Customer Support representative.
“As you hire the best for your sales team so should hire for your Customer Support’s team”
This additional cost is like an investment that will help you create your brand image and goodwill along with happy customers who will prove to be the most valuable asset for you.
Conclusion:
These are the most commonly followed steps that are proved to be successful and are widely accepted. However, every business has its own pros and cons, its own strength and weaknesses. There is always some special needs of the business that the businessman has to fulfil with his own skills and presence of mind.
These steps are the standard steps which businesses can rearrange and follow according to nature and need of its business. The order of some steps can be changed according to the businessman but the skipping steps or ignoring these steps can lead to severe damages. As these are the most basic steps and act as the foundation stone for your business, and if the foundation stones are missing how can you expect a massive empire to be stable and strong?
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“The secret of change is to focus all of your energy, not on fighting the old, but building on the new.”
– Socrates