22 July 2023| Uncategorized 

How to start a startup?

Startup has become a popular buzzword from the last few years and the term “startup” has become synonymous with innovation, entrepreneurship, and transformative ideas.

What is a Startup?

A startup is like a young and adventurous company starting an exciting journey. The goal is to create something special that people will love. It’s like a little plant growing into a big, amazing tree in the business world.

Startups are like superheroes of business because they have cool and new ideas. They want to change how things are done and make life better. Imagine bringing a rainbow to a grey world!

When startups get popular, they grow really fast. The aim is to be famous and reach many people. To help them grow, they get money from different places, like asking superheroes (venture capitalists), getting support from friends (crowdfunding), or borrowing some money.

You might know some famous startups like Redbus, Airbnb, and Spotify. They started small, but they worked really hard and became giants in their fields.

Did you know how Redbus started? In 2005, during a busy festival season, Phanindra Sama faced a common problem – he couldn’t find a bus ticket to visit his family from Bengaluru to Hyderabad. He wandered all over Bengaluru but could not find tickets. But instead of giving up, he had a brilliant idea! Joining forces with his friends, Charan Padmaraju and Sudhakar Pasupunuri, they turned that idea into reality in 2006 – Redbus! Their mission was clear: to make bus ticket booking easy for everyone. With their user-friendly online platform, they revolutionised how people book bus tickets. From a simple idea to a game-changing platform, Redbus continues to simplify bus travel for everyone.

This means Getting a startup idea doesn’t require rocket science. Look around for everyday problems, find gaps in existing services, or leverage technology advancements. Identify pain points in society, upgrade current services, and fill market gaps. Collaborate with others and engage potential customers for feedback. With a creative mindset, innovative startup ideas are within reach.

Having a startup idea is just the beginning. Many of us have great ideas or know about important issues in society, but that alone is not enough. To turn an idea into reality, entrepreneurs must understand its potential and  hard work to execute it effectively. Many successful entrepreneurs don’t just focus on the idea, they believe in the process of execution.

Now, let’s break down the essential things an entrepreneur needs to consider to start a venture.

• Market size:  Assess the market size to determine the potential demand for your product or service. Understand the total addressable market (TAM) and the specific segments you will be targeting.

• Quality product: Delivering a high-quality product or service is absolutely essential for ensuring customer satisfaction, retention, and positive word-of-mouth. High-quality offerings build trust, foster loyalty, and set your startup apart from competitors

• Customer desirability: Understanding customer desirability is crucial. Many large companies have faced bankruptcy not due to insufficient funds, but because they failed to grasp what customers truly desired. Clarify why customers would buy your product and identify your target market for effective marketing and sales strategies.

• Competitive Analysis: Identify your competitors and analyse their strengths and weaknesses. Understand how your startup can differentiate itself and provide a unique value proposition.

Having a startup idea is a good start, and understanding customer desirability and product quality are essential. Now, let’s go a little bit deeper and focus on the important qualities and skills an entrepreneur needs to build a successful venture.

• Vision and Clarity: A clear vision for the startup and a well-defined purpose provide direction and motivation for the entrepreneur.

• Resilience and Perseverance: The ability to bounce back from setbacks and keep pushing forward despite challenges is crucial for success.

• Risk Management: Taking calculated risks and making well-informed decisions to balance potential rewards and pitfalls.

• Networking and Relationship Building: Building connections with the right people can open doors to opportunities and support.

• Finding a Co-founder: The right co-founder is crucial for startup success. Look for someone who shares your vision, complements your skills, and is equally committed. A co-founder brings added expertise, support, and diverse perspectives, laying a strong foundation for the venture and increasing the chances of overcoming challenges and achieving shared goals.

• Marketing strategy: Having a unique marketing strategy is crucial for startup success. Companies like Nike exemplify this, achieving billion-dollar valuations through innovative approaches such as the iconic “Just Do It” campaign and strategic athlete endorsements. A well-executed marketing strategy establishes a strong brand image, fosters customer loyalty, and drives significant sales, demonstrating its power in propelling startups to extraordinary achievements and billion-dollar status.

• Operational structure: In a startup, the operational structure is the framework that guides how tasks and responsibilities are organized. It defines roles, communication, and decision-making processes. A well-designed operational structure enables efficient operations, adaptability, and focus on core tasks, leading to the startup’s success.

• Understanding Taxation: Taxation knowledge is indispensable for entrepreneurs starting a startup. Understanding tax implications enables informed decisions on business structure, financing, and growth strategies. It facilitates leveraging tax incentives, deductions, and credits to optimize financial resources and enhance profitability. Compliance with tax obligations ensures smooth operations and prevents potential penalties or disputes with tax authorities.

• Security of documents: Document security is vital for startup entrepreneurs as it protects sensitive information, ensures legal compliance, and preserves the company’s reputation. By preventing intellectual property theft, maintaining business continuity, and mitigating financial risks, secure document practices lay the groundwork for a successful startup. Prioritizing document security builds trust with customers and safeguards valuable assets, fostering a strong and resilient business foundation.

• Awareness of government schemes: Entrepreneurs must be aware of government schemes because they offer crucial financial, infrastructural, and regulatory support to startups. These initiatives aim to bolster startup growth by providing essential resources and assistance to thrive in the competitive business landscape. Being informed about these schemes allows entrepreneurs to leverage the benefits and opportunities available to them, enhancing their chances of success.

 

Funding:

Securing funds is crucial for startups to support marketing, build prototypes, acquire materials, and hire staff. However, getting funding can be challenging as investors seek promising startups with solid plans. Diligent preparation, transparency, and nurturing relationships can improve success chances. Private funding from investors becomes relevant as startups gain momentum and show progress in their business. Timing matters! A solid foundation, early validation of the product or service, and a clear growth strategy are essential before approaching private investors.

Government schemes can offer valuable resources and financial assistance. Being aware of and leveraging these initiatives can significantly boost a startup’s development and provide a competitive edge. Securing the right funding at the right time sets startups on the path to success. 

https://www.startupindia.gov.in/content/sih/en/funding.html

You will find more information about fund raising in this website.

Registering a company:

Registering a private limited company in India involves several important steps. To start the process, individuals need to register with the Ministry of Corporate Affairs (MCA) through their official website. They can seek assistance from a chartered accountant or company secretary during the registration process. For a private limited company, a minimum of two directors is required, and each director must possess a Director Identification Number (DIN) and Digital Signature Certificate (DSC) for e-signing and auditing purposes.

The steps for registration are as follows:

• Obtain Digital Signature Certificate (DSC) and Director Identification Number (DIN) by applying online from government-approved agencies and the MCA.

• Choose a unique name for the company and get it approved by checking for           availability and trademark conflicts.

• Prepare the Memorandum of Association (MOA) and Articles of Association (AOA) with the help of a Company Secretary. File the incorporation documents, including Form SPICe, with the Registrar of Companies (ROC).

• Pay the registration fees online based on the authorized capital of the company.

• Upon successful verification, the ROC will issue the Certificate of Incorporation as proof of the company’s existence.

• Apply for Permanent Account Number (PAN) and Tax Deduction and Collection Account Number (TAN) from the Income Tax Department for tax compliance.

• Use the COI, PAN, and TAN to open a bank account for business transactions and operations.