Starting a business in India can be a challenging yet rewarding journey. In his YouTube video, Dhruv Rathee breaks down the key steps and valuable insights for aspiring entrepreneurs looking to take the plunge. Here’s a comprehensive summary of his guide, which provides a roadmap for becoming an entrepreneur in India.
Find Your Business Idea
The first step is understanding what you want to do. Many people believe they need to come up with a completely unique business idea. However, Dhruv advises against this. There are two reasons why pursuing a novel idea is often not the best approach:
- Low Probability of Originality: With over a billion people in India, it’s unlikely that you’ll think of an idea that no one has ever conceived.
- High Risk: Starting a business in a completely new field is risky. Without an established customer base, trial and error data, or any idea of the potential revenue, such businesses are more prone to failure.
Instead, Dhruv recommends focusing on your passion and interest. What do you enjoy doing, and how can you add value to others? If you’re passionate about something, like adventure sports, think about how you can use this to benefit others. For example, if you love river rafting, you could start an adventure sports company. Then, research existing businesses in this space to understand how they operate.
Create a Business Plan
Once you have a clear business idea, it’s time to develop a business plan. A solid plan is crucial for both guiding your own efforts and convincing potential investors. Your plan should include:
- Budgeting: Determine the capital needed to start your business. This includes operational costs for the first year and estimates for profits.
- Funding Sources: Consider how you will raise capital. Dhruv suggests avoiding loans in the early stages, especially from banks. Instead, consider funding from friends or family to minimize financial risk.
Register Your Business
After solidifying your business plan, it’s time to officially register your company. There are different business structures in India, and the one you choose will depend on the scale and nature of your business:
- Sole Proprietorship: This is the simplest and most common structure, where you are personally responsible for all aspects of the business. It’s ideal for small-scale businesses with minimal regulations.
- One Person Company (OPC): This is suitable if you want limited liability. As a director and shareholder, you won’t be personally liable for the company’s debts.
- Private Limited Company: This structure is perfect for businesses that aim to expand and build credibility. It requires at least two directors and shareholders and offers limited liability protection. It’s also easier to obtain loans and attract investors.
- Limited Liability Partnership (LLP): Ideal for professionals like doctors, chartered accountants, or engineers, or for businesses that are meant to be dissolved after a specific project.
Each of these business structures comes with different registration costs and timelines. For example, registering a Sole Proprietorship can cost around ₹1000 and take just a day or two. Meanwhile, setting up a Private Limited Company can cost upwards of ₹7000 and take around 5-10 days.
Tax Registration
Once your business is registered, you’ll need to complete tax registrations:
- GST Registration: Mandatory for businesses with annual turnover over ₹20 lakh (₹10 lakh in some states). GST registration is also required for e-commerce businesses or those involved in import/export.
- Other Registrations: Depending on your industry, you may need additional registrations like Import-Export Code or Employee State Insurance for businesses with more than 10 employees.
Mandatory Yearly Compliances
Running a business involves ongoing obligations. You’ll need to fulfill yearly compliance requirements, including:
- Income Tax Filing: Businesses must file income tax returns annually.
- Accounting and Balance Sheets: Keeping accurate financial records is crucial, whether you do it yourself or hire an accountant.
- GST Returns: If your business is registered for GST, monthly or quarterly filings are required.
- Secretarial Compliance: Required for businesses structured as OPC, LLP, or Private Limited.
- Statutory Audits: Necessary for businesses with turnovers exceeding ₹40 lakh.
Tips for Success
Dhruv shares several personal tips from his own entrepreneurial experience:
- Focus on Adding Value: Whether through services, products, or knowledge, always ensure that your business provides value to customers. This is the foundation of any successful business.
- Passion is Key: Only engage in businesses that align with your personal interests. Enjoyment is key to long-term success.
- Sustainability: Build a business model that is sustainable in the long run. Avoid ventures that harm the environment or society, as these will eventually lose public trust and respect.
Conclusion
Starting a business in India can be a fulfilling venture if approached with the right mindset and thorough planning. By following Dhruv Rathee’s advice—focusing on passion, creating a detailed business plan, registering the business correctly, fulfilling tax requirements, and maintaining yearly compliance—you can set yourself on a path to success. Remember, the key to a thriving business is delivering value, enjoying the process, and remaining ethical in your operations.
With dedication and the right approach, anyone can embark on their entrepreneurial journey and make a significant impact in India’s growing market.