How To Start A Business From Scratch?

What Is The First Thing You Need To Start A Business?

1. The term ‘business’ might be enthralling for many and at the same time speculative for some.
2. While pondering over the word business, there might not be any being who does not know its meaning.
3. But still, let’s understand what it exactly means in layman terminology.

Business

• 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

Sole Proprietorship

1. This is the simplest kind of business.
2. It is considered as one of the most booming in urban India and across the globe too.
3. In this category, the business is run by a single person for their own benefit.
4. 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.

Partnership

1. This type requires two or more members to be involved in the business together as partners.
2. 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

1. It is a privately held business organisation.
2. It is started by stakeholders.
3. The liability is usually like limited partnerships.
4. 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

1. After a lot of brainstorming, you can reach an idea or a concept on which you can build your business.
2. Usually, what works best here is picking something you feel passionate about.
3. It can be a hobby; it can be an art, it can be anything that makes you feel satisfied.
4. When we say passionate, you can think of endless options like painting, singing, dancing, tutoring, writing, creating art, etc.
5. If you choose something that is close to your heart, you will never get tired of doing the work.
6. And this, in turn, might do wonders for growing the business.
7. As after a tiring day too, you will feel equally satisfied and positive about your work.
8. 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

1. The more unique or novel your business idea, the more its growth shall be.
2. You must study the national and international market thoroughly before penning down your project report.
3. You must make an analysis of your product’s or service’s compatibility with the competition available in the national and international market.
4. Name, qualification of the owner or partners, address, etc., must be furnished.
5. Feasibility must be mentioned in the report with a revenue model, including the capital, costs, sale prices, taxes, etc.
6. 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

1. Setting up a small or medium-sized business in India needs a spare home, office, or shop.
2. 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.
3. A place should be selected, keeping in mind the concept and theme of your venture.
4. 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.
5. 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.

Also Read:

1) How Small Businesses Afford Digital Marketing?
2) Does Commercial Solar Power Make Sense For Businesses?
3) 7 Different Types of Loans for Your Small Business
4) Hiring and Managing People Wisely: HR Mantras For Small Businesses