13 Steps to Start a New Business in India 2021 | Complete Guide

Starting a new business in India a startup is a company started by individual founders / entrepreneurs to search for a repeatable and expandable business model. Startups refer to new businesses that intend to move from single founders, have employees, and grow up over time. Startups also face high uncertainty. You can register your company as a private company or a partnership company as your startup.

13 Steps to Start a New Business in India 2021

1. Rate yourself 

You should be aware of your strengths and weaknesses before starting a new business. The reason why you want to start a startup and you need to be clear about your goals and be strong enough to work hard to accomplish them. The services and products you are going to reach out to people and it is to be a full-time enterprise or part-time enterprise. While evaluating yourself you should be clear about the above questions.

2. Conduct industry research

After deciding which business suits your goals and lifestyle, evaluate your idea. Before putting your money in a business you should know all the important information about that industry. You should talk to people who are already working in your target industry and gather information that interests you. Reading and researching about people with a successful image in that industry can also help you understand the industry.

3. Have a plan

A business plan will help you figure out how much money you will need to get started, what it will take to make your business profitable, what you need to do when and where to lead. The business plan will help you chart your progress according to your plan and what position you are in now.

4. Have a plan for funding

Starting a new business in India Depending on the size and goals of your enterprise, you may need to obtain financing from an investor. Financial help can come from your friends or banks. When starting a new business you need a large capital to make it work, thus you have to plan your finances to see how much capital you are lacking and how you will manage it.

Read article about How to Raise seed funding for startup

5. Set your space

You have planned your business, the strategy for your business, the funding you have so far. Now you have to decide whether you want to set up a storefront for your business or you want to start your business online. If you want a storefront, are you going to open a home office or rent an office space. You will have to make this decision at this stage.

6. Prepare for trial and error

Whether you are starting your first new business or third you are expected to make mistakes. This is natural and you should always learn something new from your mistakes. If you do not make mistakes, you do not learn what to reduce and what to emphasize. Be open-minded and creative, adapt, look for opportunities.

7. Strategies for funding startups

Funding mainly depends on the nature and type of business. Once you realize the need for fundraising, below are some different sources of finance available.

8. Bootstrapping your business

Self-financing, also known as bootstrapping. This is an effective way to finance a startup, especially when you are starting your new business. First-time entrepreneurs generally have trouble obtaining money because they do not get money without showing some plan for potential success for the first time.

Self-funding should be considered a priority option because of its associated benefits. When you are funding your own business, you are tied to the business. At a later stage, investors consider this a good point. But this option is suitable only when the initial requirement is small. Some businesses require funds since day 1 and for such businesses, bootstrapping may not be a good option.

9. Crowd funding

Crowdfunding is one of the new ways to finance a startup that has been gaining a lot of popularity recently. It is like taking loans, contributions / investments from more than one person at the same time.

An entrepreneur has to elaborate on his business on a crowdfunding platform. He has to mention his business goals and the plans he has to make a profit, how much money he needs and for what reasons, etc. Consumers can then read about the business and decide whether or not to give their money. Anyone can contribute their money to help the business they believe in.

10. Get angel investment

Angel investors are individuals who have surplus cash and want to invest in upcoming startups. Angels also work to assess proposals before investing collectively in groups of investor networks.

Angel investors have helped start several major companies including Google, Yahoo and Alibaba. This form of investment typically occurs in the early stages of a company's growth, with investors expecting 30% equity. They are prepared to take more risk in investing for higher returns.

11. Venture capital for funding

This is where you place big bets. Venture capital are professionally managed funds that invest in companies that have a lot of potential. They usually invest in the business against the equity at the time of IPO or acquisition and exit. VCs provide expertise, mentoring, and act as a litmus test for an organization to move in, evaluating a business in terms of sustainability and scalability.

12. Raise money through bank loan

The bank provides two types of financing for businesses. One is working capital loans, and the other is financing. A working capital loan is a type of loan required to carry out a full cycle of revenue-generating tasks, and the limit is usually fixed by dividing the stock and debtor. The general process of sharing the business plan and evaluation details will be included to get the money from the bank, as well as the project report, on the basis of which the loan is approved.

13. Government programs that offer startup capital

The government-backed in Prime Minister Micro Units Development and Refinance Agency Limited (MUDRA) starts with an initial amount of Rs. 20,000 crores to benefit about 10 lakh SMEs and who starts a new business. The company has to submit your business plan and once approved, the loan is approved. You will get a MUDRA card, which is like a credit card, which you can use to buy raw materials, other expenses, etc.

This article has been written by Rushali Arora, a content writer at Legalerasta. One of the leading portal of India is LegalRaasta. They provide legal services at reasonable cost like private limited company registration, LLP registration, partnership registration, sole proprietorship registration, one person company registration and many more.

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