All You Need to Know About How to Become an Entrepreneur in India

All You Need to Know About How to Become an Entrepreneur in India | Business Management | Emeritus

Do you ever wonder what it will be like to run your firm? You are not alone. Millions of Indians aim to capitalize on India’s thriving economic landscape. There is an unprecedented surge in the growth of startups, with the total number of tech companies at 122,000 in 2023. So how to become an entrepreneur? There is no dearth of opportunities, but the path to success is littered with challenges. It is not enough to merely have an idea because it takes a lot more to attain long-term stability. Hence, it is crucial to keep a few essential steps on how to become an entrepreneur in mind. Let’s find out what these steps are and explore the importance of entrepreneurship in the future.

Overview of Entrepreneurship in India

The country has seen an exponential growth in the number of startups because of multiple factors:

1. Demographic Yield

India is in an enviable position to reap the benefits (vast talent pool, burgeoning market) of its young population (those between ages 18 and 49), comprising over half of its total population.

2. Robust Support System 

Every government, whether central or state, is undertaking efforts to promote startups through initiatives like incubators, funding schemes, and conducive policies.

3. Technological Growth 

India is on the cusp of touching over 900 million Internet users by 2025. Consequently, it will spur the growth of e-commerce, fintech, edtech, and health tech startups.

4. Funding

Indian startups are witnessing enhanced access to capital on account of angel investors and venture capital firms entering the country.

5. Prominent Sectors

Several sectors, such as information technology (TCS, Infosys), e-commerce (Flipkart, Nykaa), and fintech (PayTM, Razorpay), are boosting India’s entrepreneurial ecosystem.

In short, the importance of entrepreneurship in India is evident from the role played by entrepreneurs in the nation’s economic growth. An individual wondering how to become a successful entrepreneur needs to be agile and relevant. For example, future innovation will emanate from sectors such as sustainability, deep tech, and social impact.

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Challenges Faced by Entrepreneurs in India

Every person looking up how to become an entrepreneur must be aware of the following challenges:

1. Bureaucratic Hurdles

Indians contend with a cumbersome regulatory environment where they have to juggle numerous regulations, permits, and licenses to start and operate a business. Moreover, there is uncertainty due to frequent changes in state policies, which disrupt business plans. The recent case of Disney’s exit from India is a sobering reminder that it is not easy to run a business.

2. Financial Obstacles

It is easier to access capital, but it is still difficult for early-stage startups to secure funding. There is no support from the banking system because they are reluctant to lend to new businesses. There is the risk of high interest rates when capital becomes available.

3. Lack of Infrastructure

Entrepreneurs still have to deal with inadequate infrastructure, affecting logistics, supply chain management, and overall business operations. Moreover, many areas lack Internet connectivity and digital infrastructure, making it difficult to ensure the efficiency of tech startups.

4. Talent Shortages

It is quite difficult to find employees with the right skill sets. Many a time, the education system does not address the needs of modern businesses. It is also a challenge to retain employees as they are always at risk of joining companies with better pay and benefits.

5. Cutthroat Competition

It is impossibly hard to gain a foothold in the Indian market because hundreds of domestic and international players are vying for market share. Indian consumers are typically sensitive to price, which can affect profit margins as firms keep prices low to ensure sales.

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Steps for How to Become an Entrepreneur in India 

“If you fully accept the worst that can ever happen in your journey, fear won’t ever be an obstacle in starting up,” believes Kunal Shah, founder and CEO of CRED. Shah sheds light on a critical aspect of how to become an entrepreneur in India. There can be no fear. Here are a few steps to keep in mind:

1. Education and Skill Development

entrepreneur

The answer to the question of how to become a successful entrepreneur lies in obtaining a degree from a reputed institute or honing your entrepreneurial skills through courses. 

The first step would be to obtain a Bachelor’s or a Master’s in Business Administration as it offers a strong understanding of core business principles such as marketing, finance, and accounting. On the other hand, many working professionals also opt for short-term courses so they can balance their commitments with their courses.

Another key requirement for how to become an entrepreneur is developing skills beyond formal education. For instance, leadership, creativity, problem-solving ability, and communication are some valuable skills. 

So, professionals on this journey should equip themselves with entrepreneurial skills via online courses or workshops in business management, marketing, and finance for the journey.

There is no one-size-fits-all plan, as setting up a business in Mumbai may differ from setting one up in Bengaluru. However, there are some basic documents such as a PAN (Permanent Account Number) card and address proof. 

Furthermore, companies, either private limited or public limited, must register with the Ministry of Corporate Affairs (MCA). It involves filing documents like the Memorandum of Association (MoA) and Articles of Association (AoA). 

Most businesses with a physical location require a Shop and Establishment License issued by the local authorities. Lastly, businesses whose turnover exceeds a certain threshold have to register for GST (Goods and Services Tax). You may also require a Digital Signature Certificate (DSC) for online filing of documents with the MCA or other government agencies.

3. Funding Options

An entrepreneur can tap into a bouquet of options that cater to different stages of a business’s lifecycle. For example, bootstrapping involves funding business with personal savings, credit cards, or loans. 

There is an option of borrowing or seeking investment from friends, family, or close associates, as this typically means more flexible terms. Many government schemes also provide financial aid, loans, or subsidies for startups in specific sectors or regions.

Abhishek Goyal, Founder of Traxcn, explains: “Raise money from investors who are more excited about the BUSINESS or MARKET than the TEAM.”

A business with a proven track record should consider taking out loans from banks and NBFCs. Furthermore, an entrepreneur can reach out to angel investors and venture capital firms looking to invest in early-stage companies with growth potential.

Above all, to understand how to become an entrepreneur, one must thoroughly evaluate all the options by considering factors like funding amount, repayment terms, potential dilution of ownership, and the value of investors beyond capital.

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Strategies to Sustain and Grow Your Business in India

Most courses on how to become an entrepreneur have some key strategies in common, such as:

1. Building a Strong Network

There is an upshot to building a strong network as an entrepreneur. It eases access to people who possess a wealth of knowledge and experience. For example, a seasoned entrepreneur as a mentor, a lawyer as an advisor, or a potential investor for funding.

It is beneficial for expanding the reach of your venture, which can bring potential customers or partners. They can help validate your idea and provide feedback to shape your overall business strategy. Strategic partnerships are kindling for business growth. They can open up doors to various opportunities, such as new markets, joint product development, or co-marketing opportunities.

To grow your network, attend industry events and conferences as they can be a great way to meet interesting people. Connect with people online and participate in industry discussions.

Persistence is crucial, but so is adaptability.” as per Apoorva Ranjan, 9Unicorn. Many aspirants wondering how to become an entrepreneur should know that flexibility is key to being resilient. An entrepreneur must know how to respond to the evolving needs of their customers and industry dynamics. Adjusting your business strategy accordingly is necessary to maintain a competitive edge.

Agility in adapting to trends ensures your products or services remain relevant and actively cater to the market. Imagine a phone manufacturing company failing to notice the trend of touchscreen devices! There is the advantage of fostering a culture of innovation by adapting as soon as possible. Stagnancy can result in the risk of competitors gaining market share. Think of an online business not accepting UPI payments.

It is not about blindly following every trend but identifying the right opportunities to exploit as a firm. Capitalizing on emerging markets is critical to ensure long-term sustainability. Market research is a good way to stay informed about consumer behavior, industry trends, and technological advancements.

3. Managing Finances Efficiently

Maintaining accurate financial records is key to ensuring that business decisions are informed by a realistic picture of the firm’s financial health. It highlights areas to cut unnecessary expenses without compromising growth.

An entrepreneur can set financial goals, budget for expenses, and optimally allocate resources. Monitoring cash flow is also critical to having enough on hand to cover operational needs and avoid cash shortages. Furthermore, analysis of key metrics like profitability, debt levels, and Return on Investment (ROI) is possible through finance management.

It is crucial as is evident from the case of Satyam Computers in 2009. It came to light that the former CEO of the company Ramalinga Raju had been falsifying accounts, inflating profits, and creating fictitious assets and liabilities in the company’s balance sheet. As a result, the company’s stock price plummeted and its credibility was left in tatters.

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Frequently Asked Questions About Entrepreneurship

1. What are the Key Steps to Start a Business in India?

Coming up with an idea that addresses a problem or gap in the market, developing a business plan, securing funding, registering the business, and marketing are some of the key steps to starting a business.

2. How Can I Find Investors for My Startup in India?

Networking at industry events, conferences, and seminars, online platforms such as angel networks, crowdfunding, social media like LinkedIn, competitions with investor panels, venture capital firms, and government schemes, among others, are great to touch base with investors.

3. What are the Common Challenges Faced by Entrepreneurs in India?

Entrepreneurs often face challenges like navigating complex regulatory environments, securing funding, limited access to quality mentorship, market fragmentation, intense competition, infrastructure deficiencies, and talent shortages. Additionally, socio-cultural barriers can impede business growth.

4. How Important is Networking for Entrepreneurship Success in India?

It is extremely crucial as business in India is driven by relationships. Networking provides access to mentors, funding, partnerships, and valuable industry insights. It is often the difference between a struggling startup and a thriving venture.

Awareness of key legal aspects like business structure registration, tax compliance, intellectual property rights (trademarks, patents), labor laws, environmental regulations, contract law, and industry-specific licenses and permits is indispensable.

Advance Your Career With Emeritus

The future is bright for people with promising ideas. Emeritus offers business management courses curated to fit your busy schedule. The course curriculum provides insights on strategic thinking, financial management, and leadership. They are designed to equip you with tools relevant to the industry. Enroll now to learn how to become an entrepreneur and unlock your potential to transform your entrepreneurial journey.

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About the Author

Content Writer, Emeritus Blog
Mitaksh has an extensive background in journalism, focusing on various beats, including technology, education, and the environment, spanning over six years. He has previously actively monitored telecom, crypto, and online streaming developments for a notable news website. In his leisure time, you can often find Mitaksh at his local theatre, indulging in a multitude of movies.
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