Execution of strategies to start a new business in India
A startup is a company started by individual founders / entrepreneurs to seek a repeatable and expandable business model. Startups refer to startups that intend to grow beyond the lone founder, have employees, and grow over time. Startups also tend to face great uncertainty. You can register your company as a private company or a partner company as your startup.
Steps to start a new startup company
Evaluate yourself
Before starting a startup you must know your strengths and weaknesses. The reason why you want to start a startup and you must be clear about your goals and be determined enough to work hard to achieve them. The services and products that you are going to deliver to people and whether it is a full-time business or a part-time business. When evaluating yourself, you should be clear about the questions above.
Conducting industry research
After deciding which business suits your goals and lifestyle, evaluate your idea. Before putting your money into a business, you must know all the important information about that industry. You should talk to people who are already working in your target industry and gather information of interest to them. Reading and researching people who have an image of success in that industry can also help you understand the industry.
Have a plan
A business plan will help you determine how much money you will need to start, what will be needed to make your business profitable, what needs to be done, when and where it is going. The business plan will help you chart your progress according to what you planned and where you are now according to it.
Have a financing plan
Depending on the size and goals of your business, you may need to seek financing from an investor. Financial help may be available through your friends or banks. When starting a new business, you need huge capital to run, so you need to plan your finances to see how much capital you lack and how you are going to organize it.
Configure your space
You have planned your business, strategies for your business, you have financing, until now. Now you must decide if you want to set up a store for your business or if you want to start your business online. If you want a showcase, then you are opening a home office or renting office space. These decisions you have to make in this step.
Prepare for trial and error
Whether you’re starting your first business or a third, expect to make mistakes. It is natural and you should always learn something new from your mistakes. If you don’t make mistakes, you don’t learn what to do less and what to emphasize. Be open-minded and creative, adapt, look for opportunities.
Strategies for financing startups
Financing depends mainly on the nature and type of business. Once you’ve realized the need for fundraising, below are some of the different sources of funding available.
Starting your business
Self-financing, also known as bootstrapping. It is an effective way to finance a startup, especially when you are just starting your business. First-time entrepreneurs often have trouble getting funding, as they don’t get funding without first showing some plan for potential success.
Self-financing should be considered a priority financing option due to the benefits it brings. When you finance your own business, you are tied to the business. At a later stage, investors consider this to be a good point. But this option is only suitable if the initial requirement is small. Some companies need money from day one, and for such companies bootstrapping may not be a good option.
Fundraising
Crowdfunding is one of the newest ways to finance a startup that has been gaining a lot of popularity lately. It is like asking for a loan, a contribution or an investment from more than one person at the same time.
An entrepreneur has to put a detailed description of his business on a crowdfunding platform. You have to mention your business goals and plans to make a profit, how much funds you need and for what reasons, etc. Then consumers can read up on the business and decide whether to give their money or not. Anyone can contribute their money to help a business they believe in.
Get angel investments
Angel investors are people who have a surplus of cash and want to invest in new startups. Investor angels also work in network groups to collectively evaluate proposals before investing in them.
Angel investors have helped launch many leading companies, including Google, Yahoo, and Alibaba. This form of investment usually occurs in the early stages of a company’s growth, with investors expecting up to 30% equity. They are willing to take more risks in investing to obtain higher returns.
Venture capital for financing
This is where you make the big bets. Venture capitals are professionally managed funds that invest in companies that have great potential. They typically invest in deals against equity and exit when there is an initial public offering or acquisition. VCs provide expertise, mentorship, and act as a litmus test of where the organization is heading, evaluating the business from a sustainability and scalability standpoint.
Raising money through bank loans
The bank offers two types of financing for companies. One is the working capital loan and the other is financing. The working capital loan is a type of loan necessary to run a full cycle of income-generating operations, and the limit is generally decided by mortgaging shares and debtors. Bank financing would involve the usual process of sharing the business plan and appraisal details, along with the project report, based on which the loan is sanctioned.
Government Programs Offering Startup Capital
The government-backed ‘Pradhan Mantri Micro Units Development and Refinance Agency Limited (MUDRA)’ starts with an initial amount of Rs 20 billion to spread the benefits to around Rs 10 lakhs of SMEs. The company is supposed to present its business plan and, once approved, the loan is sanctioned. You will get a MUDRA Card, which is like a credit card, which you can use to buy raw materials, other expenses, etc.
