5 Action Plans to Start a Company
Starting a business requires a more involved procedure due to the numerous requirements to be met in terms of paperwork, permits, and regulations. What follows is a 5-step guide on how to start a small business, starting with how to select a viable business idea.
1. Choose A Business Idea
Despite having considered a variety of business concepts, you can still be unsure of your course. Making the best choice may need you to devote some time on idea generation, but it will ultimately pay off. In the actions that follow, you will discover how to transform flimsy concepts into adaptable company plans.
Brainstorm Business Ideas
Make a list of all the industry ideas you have in mind to get started. Cross off concepts from the list that are outside your area of expertise or that you have no enthusiasm for. Examine each of the ones that are left thoughtfully, then determine those that closely fit your area of expertise or mission. The likelihood of success increases when you choose a business that you identify with.
Conduct Market Research
Starting a business in a crowded market can be rather challenging. To learn whether the firm will be viable or whether the market is saturated, you should examine the size of the marketplace. If needed, research about the market for two or three of the ideas you came up with in the previous phase.
At this stage, it’s crucial to further analyse the potential outcomes of the probable business. During this step, you must develop your unique selling proposition and carry out a thorough analysis of the market needs. Create unique ways to suit those demands while studying your competitors.
Create a Business Plan
To move forward, put your idea in printed form of a document. A detailed description of the business’s operations, products or services, USPs, growth strategies, and numerous other details should be included in the business plan.
To persuade investors, the business plan should take all essential resources, revenue models, and forecast sales for the first year into account.
2. Figure Out Your Finances
Understanding your finances can help you get a substantial competitive edge in your industry and can direct your decision-making in situations that might arise when managing the business. Before you start your firm, have a well-thought-out plan for how you will raise capital and invest it.
Consider Multiple Funding Options
You can collaborate with like-minded business owners to raise funding during the seed stage of your venture. Another effective strategy for starting a business is to get in touch with angel investors. When you are unable to locate investors or self-fund the firm, crowdfunding can be a fantastic alternative. Additionally, numerous government programs offer business loans. Under the Startup India Seed Fund Scheme (SISFS), loans are provided to business owners based on their proof of concept among other factors.
Determine Expenses
Create a comprehensive estimate of all costs that might be incurred. Determine which portion of the fund you will allocate to business operations, infrastructure, production, branding, logistics, and other related expenses. To maximise the utilisation of the revenue you raised in the previous phase, break the expenses down to the minimum possible amount.
3. Business Documentation
Once your business ideas begin to take a physical shape, the next important step in starting a business is to register your company. You must electronically submit the required papers to the Ministry of Corporate Affairs (MCA) to register your firm.
Choose the Business Structure
The structure that you choose when registering your firm will affect the majority of your business components. The company should be registered as a One-Person Company (OPC) or Sole Proprietorship if you intend to operate it independently. However, you can register it as a Limited Liability Partnership or Private Limited Company if there are multiple parties involved.
Although there are multiple structures, LLP or PLC are the most widely used structure for the business registration in India.
Register Your Business
You can register your business in four simple steps. Here is the breakdown of the stages:
- Obtain a Digital Signature Certificate – As it is necessary to submit applications on the MCA platform, getting an electronic signature acts as the initial step in registering your firm. To register the business, each proposed director will require their DSC (Digital Signature Certificate). DSC requests can be met by a variety of certified authorities, which approximately take 3–7 business days.
- Obtain Director Identification Number – Obtaining a Director Identification Number (DIN), which acts as their formal identification, is mandated for directors of corporations. The SPICe+ form allows you to request DIN for a maximum of three nominated directors. If needed, the DIR-3 form can be used to later designate more directors, to acquire added DIN.
- Register on the MCA Portal – For the purpose of completing forms and submitting documents, the company director must register for a new account on the MCA platform. The director should then fill out Part B of the SPICe+ form and upload the required documents after submitting the reserved name of the firm in Part A.
- Obtain Certificate of Incorporation – The incorporation form will be examined by the Registrar of Companies after being successfully submitted. A certificate of incorporation will be issued in the name of the company if everything appears to be in order.
The following paperwork is required to register your company:
- Identification proof of directors of the company
- Address proof of directors of the company
- Office address proof of the company
- Memorandum of Association
- Articles of the Association
Obtain Necessary Licenses
You must now obtain the necessary business licenses after registering the firm. To lawfully operate a business, numerous tax registrations are required.
- TAN Number – The Tax Account Number helps to keep track of your taxation data when you collect tax at source. You can nonetheless apply for TAN registration to be used for clearing salaries to prospective future employees, even if your business does not collect or withhold tax at source.
- GST Registration – You must register for GST with the state government if your company generates more than Rs 20 lakhs in revenue.
- ESI Registration – This is necessary if you need to hire more than 10 employees who earn less than the statutory minimum.
Open a Bank Account
Once you have the certificate of incorporation, open a bank account in your company’s name. If you are opening a bank account for a One-Person Company or Private Limited Company, use the PAN number included with the organisation’s certificate. Additionally, opening an account with a nationalised bank will boost your chances of obtaining loans in future for your business expansion.
4. Promote Your Business
To pique the interest of your target market, you must begin marketing your business as soon as it is ready to launch. If you are the sole proprietor of the business, hire independent marketers to market your brand, so you can focus on the primary things in your pipeline.
Digital marketing may be the most effective strategy today for reaching your audience. Ensure your presence on all platforms, and attempt to establish a steady interaction with your customers.
5. Build Your Dream Team
It could be challenging for one or two directors to oversee the multi-level operation as your business begins to expand. You need to combine young and seasoned forces if you wish to accelerate growth.
Physical interviews during the hiring process could necessitate a significant amount of your time and other resources. Therefore, to find the most qualified applicants for your team, you should instead rely on virtual interviews. You won’t have to spend as much time setting up online interviews, and you might be able to cut back on operating costs.
Related: Best Practices for Virtual Interviews
In a rapidly growing economy like India, starting a business can be overwhelming without a clear plan for navigating each step. If you adhere to specific guidelines and take the necessary steps, the takeoff strategy for your business can be much easier to navigate. With the number of legal and organisational distinctions to consider, it is important to plan ahead when founding an enterprise. Make sure to pay close attention to the aforementioned stages when establishing the profitable business you have long envisioned.
