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 new companies that intend to grow beyond the sole founder, have employees, and grow over time. New businesses 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 business
Before starting a startup, you need to know its strengths and weaknesses. The reason why you want to start a startup and you need to be clear about your goals and determined enough to work hard to meet them. The services and products you are going to deliver to people and whether it will be a full-time or part-time business. At the time of self-assessment you must be clear about the previous questions.
Conducting Industry Research
After deciding which business fits your goals and lifestyle, evaluate your idea. Before you put your money into a business you should 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 about people who have a successful image in that industry can also help you understand the industry.
Have a plan
A business plan will help you determine how much money you’ll need to start, what it will take to make your business profitable, what needs to be done, when and where you’re 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 from your friends or banks. When starting a new business, you need a lot of capital to make it work, so you need to plan your finances to see how much capital you lack and how you will fix it.
Configure your space
You have planned your business, strategies for your business, you have financing, until now. Now you need to 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 store, then you will open a home office or rent office space. These decisions you have to make in this step.
Prepare for trial and error
Whether you’re starting your first business or your 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 and creative, adapt, look for opportunities.
Strategies to Fund Startups
Financing mainly depends on the nature and type of business. Once you’ve realized the need for fundraising, here 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 problems getting financing, since they do not get it without first showing some plan of potential success.
Self-financing should be considered as a priority financing option due to the advantages associated with it. When you are financing your own business, you are tied to the business. At a later stage, investors see this as a good point. But this option is only suitable if the initial requirement is small. Some businesses need money from day 1 and for such businesses, startup may not be a good option.
Crowdfunding is one of the newer ways of financing a startup that has gained a lot of popularity lately. It is like taking a loan, contribution/investment from more than one person at the same time.
An entrepreneur has to put a detailed description of their business on a crowdfunding platform. He has to mention the objectives of his business and the plans he has to make a profit, how much financing he needs and for what reasons, etc. Then consumers can read about the business and decide 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 excess cash and want to invest in upcoming startups. Angel investors also work in networking groups to collectively assess 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 risk in investing to earn higher returns.
Venture capital for financing
This is where the big bets are made. Venture capitals are professionally managed funds that invest in companies that have great potential. They typically invest in businesses against equity and exit when there is an initial public offering or acquisition. Venture capitalists provide expertise, guidance, and act as a litmus test of where the organization is headed, evaluating the business from a sustainability and scalability standpoint.
raise money through bank loans
The bank offers two types of financing for companies. One is the working capital loan and the other is financing. Working capital loan is a type of loan required to run a full cycle of income-generating operations, and the limit is usually decided by mortgage of shares and debtors. Bank financing would involve the usual process of sharing the business plan and valuation details, along with the project report, on the basis of which the loan is sanctioned.
Government programs offering seed capital
The government-backed ‘Pradhan Mantri Micro Units Development and Refinance Agency Limited (MUDRA)’ starts with an initial amount of Rs 20,000 crore to extend the benefits to around Rs 10,000 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.