What Is The First Thing You Need To Start A Business?
- The term ‘business’ might be enthralling for many and at the same time speculative for some.
- While pondering over the word business, there might not be any being who does not know its meaning.
- But still, let’s understand what it exactly means in layman terminology.
- Business implies an organisation or an enterprise that is involved in professional, commercial, or industrial events or programs.
- It involves buying or selling products or services for earning profits.
- Now that we’ve understood what business is let’s view the subject a bit closer by knowing its types.
- The types of businesses are listed below.
Types of Businesses
- This is the simplest kind of business.
- It is considered as one of the most booming in urban India and across the globe too.
- In this category, the business is run by a single person for their own benefit.
- The viability entirely depends on the owner of this business as they are the sole decision-maker.
Advantages of Sole Proprietorship
- All the profits are for the sole proprietor only.
- The rules and regulations laid down by the Government are a bit more relaxed for proprietorship.
Disadvantages Of Sole Proprietorship
- Like profits, the debts also need to be managed by the owner only.
- Ownership rights are difficult to transfer.
- There isn’t a difference between personal and business income.
- This type requires two or more members to be involved in the business together as partners.
- A formal agreement has to be signed between the partners to start the venture.
Advantages of Partnership
- The resources can be shared, and thus, it provides more capital for the business.
- Every partner shares equal rights in the profits earned.
- The expenses involved in starting a partnership are nominal.
Disadvantages of Partnership
- Each partner is held responsible for the debts or losses suffered by the venture.
- Selling can be difficult, as finding good partners can be tough.
- Partnerships come to an end when one of the partners decides to quit.
Private Limited Company
- It is a privately held business organisation.
- It is started by stakeholders.
- The liability is usually like limited partnerships.
- But, the liability of shareholders broadens with the number of shares possessed by them.
Advantages Of Private Limited Company
- The liability turns limited due to the less number of stakeholders.
- The profits are shared by all owners without double-taxation.
Disadvantages Of Private Limited Company
- The laws can be stringent.
- Agreements are complex and comprehensive in nature.
- Starting a company has high costs due to legal and statutory fees.
- So, after going through this quick read on what a business is and its basic types, now let’s delve into the process of starting or setting up a business from scratch.
- While highlighting the aspects that need to be understood for opening up a new venture, we’ll focus on the sole proprietorship pattern.
- This type of business is trending and is considered as one of the simplest forms to start with.
- The corporates and businesses you see today weren’t born overnight.
- There isn’t any rocket-science involved in this. Starting a business is a different ball-game altogether.
- Somewhere, someday, somebody had an idea, developed a strategy, gathered funds, and launched a small scale business unit.
- Hard work, diligence, and optimism nurtured the idea into something dynamic.
Step 1 - Idea/Concept
- After a lot of brainstorming, you can reach an idea or a concept on which you can build your business.
- Usually, what works best here is picking something you feel passionate about.
- It can be a hobby; it can be an art, it can be anything that makes you feel satisfied.
- When we say passionate, you can think of endless options like painting, singing, dancing, tutoring, writing, creating art, etc.
- If you choose something that is close to your heart, you will never get tired of doing the work.
- And this, in turn, might do wonders for growing the business.
- As after a tiring day too, you will feel equally satisfied and positive about your work.
- Otherwise, you can also check for an array of options online or connect to friends for opinions.
Step 2 - Training Or Experience
- Any business’s success depends on your expertise.
- Thus, you must be trained or should possess good experience in that particular field.
- Try to get hold of as many tips and tricks for the business as possible.
- Research is the keyword here.
- Read or browse and learn from whatever you get your hands on.
- Extensive research is the key to starting a venture.
- Unless you have 100% information about the concept, there isn’t a point in going any further.
- You can opt for professional or vocational training available in many institutes and online.
- Once you gain certifications, your project report becomes stronger too.
- These certificates can be demanded by bank officials if and when taking a loan.
Step 3 - The Project Analysis Report
- The more unique or novel your business idea, the more its growth shall be.
- You must study the national and international market thoroughly before penning down your project report.
- You must make an analysis of your product’s or service’s compatibility with the competition available in the national and international market.
- Name, qualification of the owner or partners, address, etc., must be furnished.
- Feasibility must be mentioned in the report with a revenue model, including the capital, costs, sale prices, taxes, etc.
- And this analysis should be supported with forecasting and budgeting for the next 3 to 5 years.
Step 4 - Funding
- Most of the businesses are self-funded, or the capital is raised with the help of family and friends.
- You will need a smart projection of how much funding you will need in both short-term and long-term periods.
- Also, you must plan the finances in such a way that the business will stay afloat till you start reaping profits.
- But entrepreneurs who wish to venture into small, medium, or big sized businesses can apply for loans from various nationalised banks or cooperative societies.
- Funds can also be raised from welfare specific communities, crowdfunding, angel investors, etc.
- The lending charges and other details may vary depending on different aspects like type of business, projected ROI, etc.
Step 5 - Location And Registration
- Setting up a small or medium-sized business in India needs a spare home, office, or shop.
- Selecting a space can be tiring, but it needs to be managed carefully, as changing the location becomes very difficult physically and documentation wise as well.
- A place should be selected, keeping in mind the concept and theme of your venture.
- For example, if you are starting a dance studio, the location should not be in a residential area, as it might create disturbance in the locality.
- Once the location is fixed, you must register the business by providing all the documents to the local authorities or corporation for starting the venture smoothly.
Step 6 - Branding And Marketing
- Another vital element in the journey of setting up a business is creating a face for it.
- And that can be done through the right branding and marketing.
- For this, you must first get a good user-friendly website designed for your venture.
- In these rapidly changing times, every business has turned towards online selling.
- Thus, you too must keep the website in place.
- With the website, social media marketing also needs to be taken care of through hiring agencies or doing it on your own.
- Reaching the customers and connecting with them is the priority in today’s world.
- This classification, pros and cons, and the steps involved in the process will surely help you build your business.
- Along with all the details mentioned in this article, you must also focus on uniqueness, honesty, perseverance, diligence, hard work, positivism, and strong will power.
- If you imbibe them in your lifestyle, the sky shall be your limit.
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