Questions to be asked before starting a company in India
Starting a company in India can be quite exhilarating as there are many perks of the same. One can be their own boss, have financial independence, get to work as per their choice and timings.
It must also be kept in mind that starting a company in India requires a lot of research, time and demands detailed groundwork. If not done correctly, a business venture can be a mere loss instead of an entity reaping profits for the owner.
Therefore, it is a must for all entrepreneurs, businessmen and owners to first ask themselves certain questions to know whether doing the business will be the right option for them. Here are certain questions that must be asked by any individual to ensure the right path of making the decision of setting up a business.
What should be the form of entity in which new business shall be started?
This is a very important decision to be made by any starting entrepreneur. In India, a business can be done in the form of proprietorship, partnership, LLP and Private Limited Company. Each form of entity has its own pros and cons.
If the businessman wants to start slow and do not have a long term vision for expansion or not looking for investments from venture capital and private equity investors in future, He may start small with either proprietorship or partnership.
However, if He has a long term vision to expand the business in future or attract investment from a venture capitalist or private equity investors, then He must opt for either Private Limited Company Registration or Public limited company registration.
In case a foreign company wants to set up business in India in the form of an incorporated entity, it may opt for subsidiary company registration in India.
A subsidiary company can also be a normal subsidiary or wholly-owned subsidiary.
Further, it may be noted that options for foreign company registration in India in the form of unincorporated entities are Branch Office, Liaison Office and Project office.
2. In the long run, will the company be drawing profits?
This is a very important question that must be asked by every entrepreneur before starting a business. It is true that finances are not everything but they have an extremely crucial role in maintaining the business to run for longer time periods. It also is a core part of the efforts made by the person and tells them all their hard work is worth it.
If in the long run, the company is not capable of earning enough profits to sustain the business then one should give a second thought to starting a company in India. It should reap higher revenue in future, more than invested in it.
3. What are the long-term goals to be achieved with opening the business entity?
The business activity that the individual is planning to undertake must be in alignment with the goals and objectives to be achieved in the long run. Certain points must be clear in the mind of the owner before starting the business. These are as follows-
- Why do I want to start a business?
- Is operating the company enough as my primary source of Income?
- Where do I see myself and the company or business in the next 5 or 10 or 20 years?
4. Are the company’s ideals and aims in alignment with the personal long-term goals and objectives of the owner?
One requires an accurate amount of capital to start a business. Sufficient finances ensure that the company will be started with lesser hitches and is an essential prerequisite. The individual must assess in advance the ample amount of money they will need for different business-related tasks such as-
- To carry on the business operations
- To buy the goods
- For paying the employees
- To hire professional service providers
- For digital marketing and advertising
- For website building etc.
5. Are there enough tools and resources to start the business set up? Does the individual have enough knowledge about the same?
Setting up a business in India requires all sorts of resources and tools to make it successful. Apart from the financial ones it also requires intellect and emotional level. The individual must have thorough knowledge regarding the goods or services they are going to provide and about the related industry. The available resources must be used efficiently and judicially in a way where there is money as well as time-saving.
6. Who is the target consumer base for selling the product or services?
It is essential to know the target consumers of the rendered product or service provided by the company beforehand. It helps in specifying the demographics to appeal to the masses related to the particular targeted audience in order to make sales and earn profits. Knowing this also helps in deciding which tools one must use in order to reach the people easily.
7. Is enough research been done about the competitor?
This is an important aspect to be looked upon while setting up a business in India. Proper market research and knowledge about the competitor companies is to be carried on. This helps in providing key insights on how to develop a growth pattern and reach the targeted customers by looking at the positive as well the negative points. Surviving, in the long run, means being fully acknowledged about the competition in the market and overcoming with the best possible techniques.
8. What makes your business set up unique and different from others in the market?
Most of the companies operate in the same field or idea that have been in existence for years but what makes them unique is their business doing techniques, their Unique Selling Point (USP) to appeal the consumer base and their priority to make the difference in the product world.
Knowing what key areas make your businessstand out from the other companies and how your product is special from other selling items is important to strategic selling plan. A product or service that clearly states the ambition behind its production i.e. how it will enhance the lives of the customers have a more chance to survive and be popular in long run.
9. Is a team required for completing the business set up tasks or the individual alone is enough?
In the long run to thrive it can be a tedious job to work all alone and complete most of the tasks and activities of the business. Therefore, it is advisable to have a professional team of members for doing different set of tasks rather than doing it yourself. This will help in focusing on only the important issues that require the attention of the owner.
10. Is the individual setting up business in India doing it for the long haul or not?
It can be as exciting as it sounds to run a business or company and being your own boss. But one must be cent percent sure whether they will be continuing it in the long run and just won’t leave if a single hurdle comes by.