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Success starts here

How to Build a Business: A Complete Step by Step Guide for Startups

Success Prabash Ranjan

Prabash R Sahoo

be a boss

It’s exciting to start a business. For many reasons, choosing to have own business is better than doing a job somewhere else. If you want to control your own destiny and to be the boss of your passion, building a business is the best option for you.

There are very few who want to be an entrepreneur. Many of us run behind a job and work hard to be in the good book of the boss. The reason is simple. In a business there are lots of challenges that only able few dare to face. Even if you’ve already made a strong decision to start your own business, your friends and family will advise you not to take the risk. Why? Because they fear you might fail in your venture. It’s not astonishing that not more than 10% start-ups really get success.

What’s wrong with the start-ups those fail? There are few clear reasons:

  1. They have no clearly defined goals. They are even unaware of which objectives they desire to achieve.
  2. They are over optimistic and dreamy. Without validating the idea behind their business, they make a long jump. Nothing wrong with a dream, but the dream should fill up with practicable vision. Ideas should be tested and retested on a solid market background.
  3. They don’t have a proper business plan. A business plan is a handy document that describes the business model, potential customers, potential market and competition, operational mode and organizational structure, pricing models, marketing and sales strategies, financial and legal aspects and all other major issues of a business. It works as an axis around which all business activities revolves with proper control. Without a concrete planning document no start-up can proceed even an inch further.
  4. They don’t have any first hand analytical report on competition, customers, demand and finance. All business models must be based on proper survey and analysis.
  5. They are lazy. Lazy people don’t work spontaneously. Businesses always need spontaneous involvement.
  6. They lack finance and resources. Lack of research based data and its analysis, lack of proper business planning, negligence in validating concepts and idea altogether and negligence in proper finance management altogether result in multiple deficiencies and importantly deficiency in finance and resources. Therefore start-ups fail.

Then who get success? Success comes to those who apply practical approach, carefully choose goals and business models at the venture, work hard and manage properly. To translating your dream into a great success story, to reap the reward of all your hard work and to feel pride of having something of your own, you need to proceed step by step. You need to be careful at each step. You not only dare to start a business, you need to dare in fulfilling each aspect that a business venture requires.

With my experience of working with many small businesses as a consultant for last five years, I’m writing this post just to help you in starting and running your business successfully. Just read it carefully and completely. Make notes whenever you feel it’s necessary.

Business plan

After reading the post, slowly and steadily start your journey. I advise to ignore not even a single side. Make a check list, whether everything is in accordance. Are you missing something? Revision is most important aspect.

Goal, Concept and Research

What’s the first requirement to start a business?

  1. A clearly defined goal
  2. A set of concepts
  3. An unique idea after examining/testing the concepts
  4. Adequate research on similar businesses and the market
  5. A mode to discover the ‘Pain-Point’ of your potential customers

Goal

Each beginning, whatever it may be, starts with a goal. In a business goals helps in

  1. Understanding the direction of your business
  2. Achieving objectives
  3. Measuring growth

You must have a set of defined goals before you start. You should set new goals at each point of your business’s development. Your goal need be SMART (Specific, measurable, achievable, relevant and timely).

Here are a few things to consider when setting your goals:

  • Specific – be clear about what you want to achieve. For a startup, the goals are obviously financial independence, better income and secure future. You may add few other aspects too.
  • Measurable – make sure the goal can be measured. You can recognize if you’ve achieved your goal. It should be quantitative, not qualitative. Everything need to be in numbers. For example – How much percentage of ROI (return on investment) in how many years? How much will be your annual progress?
  • Achievable – check that your goal is something you have the time, money and resources to meet. Be more practical while setting your goals.
  • Relevant – ensure your goal is relevant to the direction you want your business to head in, for example, increasing profit, employing more staff, increasing brand awareness etc.
  • Timely – set a realistic deadline for completing the goal. It may be two years, three years or five years. The deadline shouldn’t exceed five years.

While you’re going to start your business, you should define your goal more specifically. What and how much you wish to gain from your business? What’s the time frame within which you are going to achieve your objectives?

Concept and Idea

Concept is an abstract idea on which you are going to work.

When you started thinking of your own business, you came up with one or more ideas. In fact, these ideas are your basics. Roughly they contain your concepts about your product or service, customer, market and goal. But note that it’s abstract; no reality has yet been added to your concept. Hence you need to test the validity of your concept with research and analysis. If you find the concept is not valid to work, you need to change it. Test and retest your idea again and again

Your idea may be about a product or service that you want to sell and you believe that people need it. Here are two alternatives.

  1. The product or service is already in the market. But due to one or more reasons people are in need of better options either in term of quality or price or easy availability or value.
  2. People don’t know that they need a product or service because it has not yet been invented. If you take initiative to invent and produce the same, there will be an increasing marketing demand.

In the first case, you are entering to the market for a competition which is at about zero level. You are going to making it more competitive by offering better quality or lower price or some other values. In the second case, you’re going to create a new market for your product or service.

In both the cases, you’ve already thought that you’re a sure gainer; you’re going to serve your goal. But you might be wrong. For the first case, there may be adequate options for people to choose. And for the second case, your new product or service mayn’t be adopted by the people. Hence you need research – survey and analysis to validate your idea.

Research

Survey

Your research better can be in three levels:

  1. Brainstorming with people around you.
  2. Browsing on the internet
  3. Sample survey in the market(s) you want to servebusiness meeting

It’s wise to start from an informal level. Start brainstorming seasons with people around you – your friends, colleagues and family. Be loud. Discuss the idea with them. Encourage them to be more critical. Be prepared to accept negative comments. Note down each aspects of the discussion. Caution: Be cautious about two things. Few people around you may discourage you. The best thing you can do is – neither accept nor reject them. Just note down what they are telling about you. Second, don’t take the result of your informal discussion as granted. Just observe and note down what your near and dear are telling.

startup

At next level, do research on the internet to find out some important result. Your internet browsing and surfing sessions need to answer to some specific query, such as –

  1. Whether your idea is new and unique or not: Search for the product or service you want to sell. Verify with from bigger online market place to smaller online stores in your defined market area.
  2. What is the competition level: Specify who many large market place and small stores are selling the product or service. What is about the pricing features? Read some review to know what customers and expert are talking about the pricing, features and quality of existing similar products and services. Are they satisfied?
  3. Existence of the idea: Read some blog posts to find out whether there is some exactly or nearly matching ideas have already been viral or not. If yes, how much those match to your own idea.
  4. New idea: You may discover few new ideas through a blog posts or reviews which is though similar to your own, but seems better.
  5. Success and Failure Stories: The internet can adequately help you in reading success and failure stories in two categories: a) of general nature related to starups and entrepreneurship and b) specific to your business idea.
    • Read more failure stories in comparison to the success stories. Failure stories will help you in learning from other’s mistakes. That stuff will be your better guide. You will learn to not repeat the mistakes again.
    • Success stories will someway inspire you but can’t provide the detail picture of the business inside.
    • Stories specific to your business will help you in refine and redefine your idea.

At next level, go for a systematic survey as steps follow:

  1. Prepare two set of questionnaires. One set for the business owners similar to your dream business and another set for your potential customers.
  2. Questionnaires need to mostly contain multiple choice based questions with the choices indicating different degrees or levels, for example –
    • Yes, no, don’t know,
    • Highly Satisfied, Satisfied, It’s OK, Not Satisfied, Extremely Dissatisfied,
    • Above 1000, 1000 to 700, 700 to 500, 500 to 200, bellow 2000 etc.
  3. Provide adequate choice options.
  4. At the end of the questionnaires, keep space for additional information and comments, if the surveyed want to provide.
  5. Your questionnaires should contain all relevant aspects those you need to investigate, but avoid to make them unnecessarily lengthy.
  6. It is best advisable to take the help of a professional researcher, if possible. Hire a research assistant.
  7. While you’re preparing questionnaires for business owners, divide it into three parts.
    • First smaller part will collect demographic details.
    • Second part in medium size will collect both contact and business details of general nature.
    • Third part will be the largest part that will contain more specific questions like
      • Their experience with business
      • Their perception on the future of the business
      • Their perception of the products or services
      • Their experience with the customers
      • If they have any new idea
  8. While you’re preparing questionnaires for target customers, divide it into only two parts.
    • As in case two, the first smaller part will collect demographic data
    • The larger second part will contain more specific questions like –
      • What they are thinking about the quality of the specific product available in the market?
      • How much they are willing to pay for a better quality product?
      • Will they be interested in purchasing a product that can resolve their specific problem?

The main motto behind the survey is to discover the real ‘pain point’ of the people. What the problem or difficulty people are facing with the existing product or service or non-existence of a facility in terms of product or service.

The degree of the pain point will let you know the strength of your idea. If the people’s pain for the product is higher, you will get better success if you lunch your idea.

Analysis

Now it’s time to analyze the opinion, knowledge and information you’ve collected through your three level investigations. The analysis will lead you to take the next big steps. Hence, take adequate care.

  1. Take sufficient care to make the investigation report readable, comprehensive, to the point and concise.
  2. Divide all the information and opinion into three categories –
    1. Informal,
    2. Semi-formal and
    3. Formal
  3. Divide each category into further sub-categories –
    1. Qualitative
    2. Semi-quantitative and
    3. Quantitative
  4. You’ll find most of the informal data/information/opinion you have collected are qualitative and subjective in nature. But those come from different level of experiences. Avoiding any type of bias, have a deep look into them. You’ll get some deep insight.
  5. Semi-quantitative and quantitative data you have collected consist degrees, levels, comparisons and numbers. Those can be analyzed in more systematic way.
    1. Use a data analysis software like SPSS (Statistical Package for Social Sciences), Stata, SAB Business Intelligence or Statistix.
    2. Read the instruction to know how to use them.
    3. Put your data in the format given
    4. Follow the steps those come while applying the software
    5. You will get all the result in a comprehensive table. You’ll find the exact numbers, percentage, averages and values
  6. Now, make a comparison of the findings at different level. Make comparison of qualitative and quantitative suggestions (results).

SWOC Analysis

Now, you’ll get a clear picture of what you were investigating for. Make a comprehensive report. Go to the last step of analysis, i.e., SWOC (strengths, weaknesses, opportunities and challenges) analysis. This well tested and widely used management tool is, in fact, adequately strong to –

  1. provide perfect vision,
  2. help in formulating better business model and marketing strategies and
  3. navigate your business in the right direction.

Strengths and Opportunities:

Make a list of all your strengths in entering the market. Clearly indicate the opportunities those are waiting for you.

Weaknesses and Challenges:

What’s the weakness with? Isn’t it bigger than your strength? Or your challenges aren’t bigger than your opportunities?

If weaknesses are not more than the strength and challenges are not greater than opportunities, you are in the good side. But there might be the opposite. If practical fortune is not with you, you need to conceptualize your idea. You should be in continuous effort to get bigger strength and better opportunities. Never overestimate your weaknesses and challenges, but be brave enough to fight. Throughout the investigation and analysis processes you have been introduced with many conceptions, many ideas, many insights and many options. If one idea doesn’t fit to the practicable frame, put another, but never apply force to make it fit. Be practical and always look at the ground reality.

It’s time to have a look where you were one or two months earlier and where you are at present. Obviously there have been a lot of changes in your perception and strength. Whatever the idea in your perception at present is far matured from the earlier one.

Prepare the Business Plan

You have already defined your goal, analyzed SWOC and validated your idea. Now you have to make the most of your brain on thinking on a proper business plan. A business plan can help you in

  1. Defining why you thing you need to lunch your business
  2. Summarizing the sense of your business in a single document
  3. Guiding you in operating your business
  4. Creating a map for investors, bankers and other interested parties to use when determining how they can best help you and to help them decide whether or not your business is viable

Your main plan should consist of:

  1. Executive Summary
  2. Introduction to your company and business model
    1. Name
    2. Trademark, if any
    3. Address/Location
    4. Brief history
    5. Type
    6. Size
  3. Your goal
  4. Your vision and mission statements
  5. Market analysis report
  6. SWOC analysis
  7. Your products or services
    1. What are your products/services
    2. Features of your products/services
  8. Your buying persona or potential customers
    1. Who are your potential customers
    2. Their demographic, cultural and psycho-graphic details
    3. What would they pay for your product
    4. Why would they pay for your product services over your competitors
  9. Your competitors
    1. Comparative analysis to find out your key competitors
    2. Who is doing something similar to you
    3. How have they been successful
    4. Did anyone fail and why
    5. How you can compete with them
  10. Operational and management structure
    1. Operational plan
      1. Product/service creation
      2. Distribution
      3. Other requirement
    2. Organizational Structure
      1. Partners
      2. Employee
    3. Location and Space
      1. Main Location or Registered/Head Office
      2. Branches/outlets/Franchises
      3. Online eCommerce
  1. Marketing and sales strategy
    1. Types of marketing you are adopting
    2. Marketing message
    3. Sales strategies
    4. Sales structure
  2. Pricing model
    1. MRP
    2. Special Discount/Offer/promotion
    3. Coping with competition
  3. Details of financial plans
    1. Budget
    2. Startup cost
    3. Reserve fund
    4. Requirement of loan and third party investment
    5. Expected annual turnover
    6. Return on investment (ROI)
    7. Growth graph
  4. Social responsibilities
  5. Conclusion and Appendix

Above blueprint of an ideal business plan is effectively capable of giving you a complete picture of what you need to include in your business plan and what you have to do at the next steps till lunching your business. However, I’m further expanding and explaining it to not let you to be confused.

Executive Summary:

The executive summary will be the first part of your business plan, but you can write it only after completion of your business plan. It should be 5% to 10% of complete document. A concise but clear summary of your plan, justification of your idea and goal, the best aspect of your business within one or two paragraph, important data in numbers, justification of the business proposal and few concluding statements and contact details are typical components of the executive summary. The structure of the summary should be as it is in the main document. There shouldn’t be any mismatch.

The main objective of executive summary is to present a concise summary of your business plan which can be read and understood separately. It’s meant for the investors, bankers, concerned government officials and any other one who has direct/indirect interest in your business. Make your executive so brief but clear that the concerned person can read it within typically half an hour without missing any point you want to highlight. While everyone in an organization is busy with many work responsibilities, he/she generally prefer to read short and snappy summary while presented to them. Only after reading the executive summary, the concerned person decides whether he/she need to go through the complete document or not.

Note: Along with the typed copy of the executive summary, it’s advisable that you ought to prepare a PPT of the same.

Introduction of your Company and Business Model

Name, Logo and Trade Mark:

This is the starting point of your business plan. Start with a working name and logo of your company. The name of the company should be short, easily memorable and indicative to the specific nature of your business. Avoid duplicity while choosing the name otherwise you’ll face problem in brand reputation and in the processes of registration of your company. Your complete company name or part of it may be used as registered trade name and trade mark of your business. You may change the name of your business at any time before lunching it.

While designing your company logo, try to make it as simple as possible. Take your best efforts so that people can easily remember your logo and identify your company through it. Use such a color pattern for your logo that the same can be used uniformly in your advertising and marketing material, product packages, website etc.

Put your company name and logo on the cover page of your business plan as well in the footer or header section of each page.

Address:

Provide address of the place from where your business will start operating. Along with address give the location and contact details.

Short Introduction:

Provide a short introduction of your business with brief history (if any), model and philosophy/concept of your business along with category (such as software or electronics or apparel etc.), type (service or product, online or offline or both) and size (micro, small or medium).

Limit this section within two printed pages or approximately thousand words or less.

Goals:

Clearly define your goals with bulleted or numbered list. Limit the list to as less as possible. I’ve already discussed regarding setting the goals in previous sections.

Vision and Mission Statements:

Make clear statements of your vision through which you aim to achieve your goals and objectives and can able to grow your business. Also make it clear which mission you’re going to fulfill through your goals and objectives. Whiles goals are specific to your business, mission should be broader like generating employability opportunities or helping customers to save their hard earned money.

Add market analysis report

To strengthen the validity of your idea/concept, goal and vision include few excerption of relevant research based data, final analysis and report of the research that you have conducted. You don’t need to include complete research document in your plan. Show how the research findings are supportive to your idea, but don’t make any biased statement. Rather you should prepare a separate document for research report for your future reference.

SWOC Analysis:

Include complete SWOC analysis which you conducted after market survey. Highlight you strength and opportunities along with your weaknesses and challenges (threats). Clarify how you’re prepared to overcome your weaknesses and face challenges. Which efforts you are taking and how can you transfer your challenges into strengths.

Your Products/services

What are the products or services you’re introducing, explain it exactly. Add the features of your products/services in bulleted or numbered list. Describe how your products/services are helpful for the potential customers. What are the benefits of your stuff?

Buying Persona

Clearly define your buying persona or potential customers with their complete features. Include who they are, i.e., their demographic, cultural and psych-ographic details. What is their purchasing habit and why they will be willing to purchase from you.

Highlight the ‘pain-point’, i.e., whether there’s a vacuum of unavailability of certain product or service for which they are suffering to a certain extend or they are suffering due to the pricing structure or quality or availability or accessibility of a product or service. Clarify how your product/service will able to heal the pain point.

Your Competitors:

Outline who’re your key competitors with the complete features of their business model, financial strength, years of experience and products/services. How they’ve succeeded in the market. What are the plans you’ve ahead to compete with them. In case anyone has failed in similar business, provide the detail reasons of his/her failure.

Operational and Management Structure

Write complete note of how your business will be operated. Outline how you will create products or services. Make the structure of production and distribution starting from outsourcing raw materials, assembling, testing, packaging, warehousing, shipping etc. Define each process and involved phenomenon.. Think over any type of complexities

How many people are required for your business? Clearly define your team. Make a list of the qualifications and experiences your team members required. Select everyone through in depth interview.  Spot real talent beyond certificates degrees or lack thereof. Define your organizational structure starting from receptionist up to the CEO. Include details in your business plan.

Do you need any partner? If yes, do it right now. Choose someone who have similar interest but able to complement you so that you can provide better leadership to your business. Consider your weaker sides and how your partner can complement it. If he/she is one of your best friends, it will better.

Where your business will be operated? How much space you require for different operations? Do you require branches or outlets at different location? Are you planning for any franchise type? What’s about the online presence of your business? Write detail plan of your operational locations

 Marketing and Sales Strategy

How you make your product/services known to your potential customers? How will you sell your product? Depending upon the size of your market you need to choose your marketing strategies. Whatever may be the size of your business, it’s always advisable that you should adopt both online (digital) and offline marketing methods

Marketing message: You also need to define your marketing message. In other words, what will you say to convince customers to choose your product? Here, you want to focus on your Unique Selling Point (also known as USP). This is the unique advantage your product has to solve your customers’ problem. For example, it may be lower price and higher quality or extended warranty etc.

Sales strategies and structure: Along with marketing strategies, finalize sales strategies and structures for your products/services.

Pricing Model

Check out the pricing of similar products and services from your competitors. Consider whether you can sell your product at some exciting price level or you can add some values to the pricing structure such as freebee or extended services.

Consider how you can make a difference to attract more and more customers.

Financial Aspects

This is the most dynamic aspect of your plan. Financial statements translate operational and marketing plan into numbers. Many times under-capitalization leads to failure. Make sure how much money you need and how much money you will make. Be realistic. Make a complete road make of your finances. Cover your startup cost, your running cost, reserve fund, other unforeseen expenditure, expected annual turnover, expected ROI and growth chart and funding sources in your plan.  Write down details about the expected funding sources and how much you can refund to the investors. Spell out what benefit you can give to those who’ll finance your business.

The financial statements translate your marketing and operational plans into numbers — profits and cash flow. They identify how much money you will need and how much you might make. Since this is the most dynamic part of your plan, and perhaps the most important for long-term stability, you should update this monthly for the first year, quarterly for the second year, and then annually after that.

  • Cover your startup costs. How are you going to finance your business initially? The bank, venture capitalists, angel investors, Small Business Administration (SBA), your own savings: these are all viable options. When you start a business, be realistic. You will probably not roll out of the gate making 100 percent of whatever you project, so you need to have enough ready reserve to fund things until you are really up and running. One of the surest roads to failure is under-capitalization.
  • What price do you intend to sell your product or service for? How much will it cost you to produce? Work out a rough estimate for net profit—factoring in fixed costs like rent, energy, employees, etc.

Social Responsibilities

Social credibility is not a less important aspect of any business. Make a clear social responsibility plan that will helpful for your public relations (PR), public acceptance and brand reputation. Few of the priority area should be employee welfare, environmental protection and community services

Conclusion and Appendix

business analysis

Make brief concluding statements and add an appendix to your business plan for additional information.

Managing Finances

Arrange Startup cost

Money is the backbone of any business. However, securing funds for a startup is one of the toughest challenges. According to a recent study about 76% of startups fail due to lack of finances. Funding a new business is always a painstaking activity. Therefore you should cautious enough to fund your business and make expenditure in accordance.

Before lunching your business make adequate financial arrangement. Try at each possibilities of arranging capital. Look at the following options –

  1. Bootstrapping: Self funding, aka bootstrapping is the first option of financing for startups. You can invest your own saving. You should never invest all your savings into a business due to the risk of failure. In addition, you should never invest money put aside for emergency savings (experts recommend having three to six months of income put aside for this purpose), or money you will need over the next few years for various obligations. In addition, you may ask your friends and family to invest in your business.
  2. Home equity loan: If you have a home, looking to get a home equity loan can be a wise idea, since these loans are typically easily approved and interest rates are typically lower.
  3. Product pre-selling: Product pre-selling is a good idea to manage the startup cost. You need a large online platform like Amazon or Flipkart to offer pre-lunch booking with exiting offers. The growth of Apple and Samsung is largely due to product pre-sale.
  4. Business Credit Card: You may apply for a business credit card. On the billing due date pay the minimum due and let the rest amount roll over for the next cycle. However, credit card interest rate is much higher than that of any other type of loan.
  5. Working Capital Loan: Working capital loan from a bank is the fund required to run one complete cycle of revenue generating process. Visit the websites of different banks to check the loan offers, rate of interests, eligibility criteria and other terms and conditions. Compare and apply for a loan from the bank whose interest rate is lower. Since it’s not easy to secure a loan for business before running, keep multiple bank options.
  6. Government Schemes for Startups: Check for different types of government funding for start-ups. If your business plan will be approved, you can get funding at lower interest rate
  7. Angel investment: Angel investors are individuals with surplus money to invest in a new business. They also work in group to collectively screen the proposal before investing. They prefer to take more risk in investment for higher returns.
  8. Venture capital: Venture capitals are professionally managed platform to businesses which have huge potential. However, they generally don’t invest in any new business having no profit record.
  9. Funding from incubators: Early phase businesses can get funding, training and guideline from business incubators. Look for any incubator available in your city.

Minimize your running cost and avoid wastage

As a startup you have work with low fund for running your daily business. Monitor to keep your running cost in line with your projection. To avoid wastage, look through and estimate how much you really need, and minimize the cost in every possible way. Purchase nothing that is not an immediate requirement. Keep purchasing office equipment and stationery to a minimum when starting up. Brainstorm to get better idea for lo cost management.

Keep reserve fund

There might be many unforeseen situations that you need additional finance. Be prepared for such situations. Keep adequate fund in reserve to fill the gap. It should be not less than 20% of your total budget.

Decide payment modes

You should have adequate options for your customers to make payment. Make a clear policy of accepting payment. You may include most of the following options

  1. POS (point of sale) swipe machine for payment through credit and debit cards at outlets.
  2. Online payments through secure payment gateways like PayPal, Amazon, CCAvenue etc.
  3. Payment through mobile wallet by scanning QR (quick response) codes
  4. Cash at outlets
  5. Cheques and bank drafts Business success

Covering Legal Sides of your Business

Legal sides include:

  1. Product and zoning laws,
  2. Incorporation laws and
  3. Tax laws

Ensure that your business is following all government regulations. To do so at first you need to hire a qualified and experienced legal advisor who has sufficient knowledge of business regulations of the land. Follow the steps suggested by him/her.

With the help of your business advisor decide the type of your business entity. Check the website of Ministry of Corporate Affair to know incorporation regulations. You have the following options.

  1. Sole Proprietorship: A sole proprietorship is the simplest form of business entity in India. In this case, the owner of the business and the entity are not separated. If you’re the single owner of your business and willing to take all responsibilities of profit and loss of your business, you might prefer to adopt this form of entity. There is no separate regulation to cover sole proprietorship. You just need to have an establishment license from the local municipalities. You don’t need any paper work and annual compliance.
  2. Partnership: A partnership is quite similar to sole proprietorship. The two basic differences between partnership and sole proprietorship is that –
    1. more than one individual is involved in a partnership.
    2. The roles, responsibilities and the share of each partner are specifically defined in a legal partnership agreement.
  3. Limited Liability Partnership (LLP): An LLP is a separate legal entity from the partnership entity. Unlike the partnership and normal proprietorship business assets are separate from the personal assets of the partners. In case the business incurs losses, the personal assets of partners are not put at risk as the maximum liability of every partner is defined by his share capital in the entity. Compared to Partnership and Sole Proprietorship, Limited Liability Companies always have better credibility among investors. The main reasons include proper maintenance of financial records, incorporation records and tax records. However, formation of LLP is
  4. Private Limited Company: It’s one of the most sophisticated business entities in India. Minimum number of members required to form a private limited company is two which can be extended up to maximum 50 members. Minimum paid up capital required is Rs. 100,000.00. In this form, business is a separate entity than the individuals. The profit and loss of the business is not the profit and loss of the individuals forming it. The members are the share holders of the business. Such type of company can’t invite the public to subscribe share. The existing shareholders too can’t transfer their share. To form a private limited company a lots of paper works required and the registration process is complex.
  5. One Person Company (OPC): OPC is similar to Pvt Ltd. Company, but the advantage is that only one person can open the company. Similar to a Company, an OPC is a separate legal entity from its members, offers limited liability protection to its shareholders, has continuity of business and is easy to incorporate.

Get an account

After forming the business entity open a bank account in the name of your company. The document required to open a bank account are:

  1. Certificate of incorporation or establishment license
  2. Document of formation, if any
  3. Legal agreement, if any
  4. Address proof of the business premise such as latest electricity or telephone bill or leas/rent agreement or property ownership deed.
  5. PAN of the company, if any
  6. PAN of the proprietor/partner/directors
  7. Address proof of the proprietor/partners/directors
  8. Passport size photographs of proprietor/partners/directors

Fulfill taxation norms

Fulfill all the taxation norms including individual income tax, company income tax, Goods and Service Tax (GST) etc. Click here to find out GST related laws.

Making Your Business

Start Creating Products/Services

It’s time to make all necessary arrangement to make products/services. Make all appointment or outsource manpower. Make a complete list of work processes and assign responsibilities to each one.

Check two important aspects:

  1. Whether you are fulfilling all government laws that apply to your industry.
  2. Whether you have adequate arrangement for quality test.

Get a website

Having a business website has many advantages. Depending upon your sales strategy and structures, you may either have an e-commerce website or a simple website to showcase your products/services. Whatever it may be your website need to be interactive and full of quality content so that visitors to your website will be engaged. Continuous engagement results in converting the unknown website visitors to customers. If you are in eCommerce, your website is both of your sales and marketing channel, but if you aren’t in eCommerce, your website can serve you as your primary marketing channel.

Please note that your website must be optimized for search engines so that your potential customers can find it on search engines like Google and Yahoo. Read details of Search Engine Optimization here.

Spend time on social media

Next after building a website, what you need is spending time of social media. Social media are the platforms from where you will get approximately 55% of your customers. Creating a Facebook page, linking a group to the page and strategically diverting your fans to your website is not only exciting, but much rewarding. Daily active users of Facebook are not less than 1.45 billion and increasing at the rate of 13% annually.

After Facebook, you also need to add Instagram, Twitter, Pinterest and LinkedIn as your prominent online marketing channels.

Implement your marketing and distribution plan

Along with marketing and advertising online, you may require some offline channels such as television, radio, newspapers, billboards depending upon your area of operation and budget. Spend adequate time to monitor and evaluate your marketing efforts. Keep a close eye on how your marketing messages are reaching at your customers.

Have a close look on your distribution channels. Ensure that your sales executives are well trained. Make a check list of all your distributors.

Lunch your business

entrepreneur

Time has come to lunch your business. Advertise sufficiently on social media, other online channels and newspapers. Send press release to all media houses and declare about opening of your new business. Never forget to invite media persons to the occasion. Arrange special event to lunch. Announce to the world loudly.

Concluding Notes

While reading this article, many queries and doubts might have been aroused. You may need to know more about some aspects or you may have requirement for a piece of information. Please feel free to ask me everything you need to know.

How to Build a Business: A Complete Step by Step Guide for Startups
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