In the current era of competitive market, every person wants to start its own business but due to inadequate knowledge and experience their business fails in starting 1-2 years. Either they fail due to cash crunch situation, wrong marketing strategies or due to non-compliance of law. During our day to day practice many youngsters contact us, that they want to start their own start-up but when we consult with them and let them know the process of starting a new business and its compliances and funds requires to run a successful business many of them deny to start their business because they are not ready to face new challenges and they have no adequate knowledge of that business.
In this article, we will discuss about some major points which must me considered while starting a new business: –
Basic Knowledge of Business which we are going to start
While starting a new business, we must have adequate knowledge of that business, how to perform in that business because in the era of this competitive market, if we start a business without basic knowledge then chances of our failure is very high.
Legal Registration & Compliances required in that Business
Before starting any business, the person must be aware about all legal compliances involved while starting and running a business. Like in Food Industry FSSAI registration is mandatory, and in case of Intra State Trading GST Registration is mandatory.
For Proper guidance the person (entrepreneur) must associate with a person who is expert of all these compliances, so that all compliances are done in timely manner because in case of default, penalties are so high that a new business can be on ground, if that penalty is levied.
Constitution of Business Enterprises
This is very important factor while starting a new business. Firstly, we have to decide under which constitution we have to start our business and its tax implications: like in case of Proprietorship firm income tax is charged as per slab, however in case of Partnership firms tax is charged @ 30% +Education Cess +Surcharge. So, it is very important factor to stay in this competitive market.
Cash Flow/Fund Flow Requirements
This is the main factor of failure of business. If we start any business, without analysing its cash flow/ fund flow requirements at starting of business and during the running of business, then there are very high chances that out business will face cash crunch situation. If in any business, recovery period of funds from customers/debtors are high then survival of business is always at stake. To overcome this situation, the Government of India has introduced MSME Samadhaan Portal to recover your outstanding dues from customers if they are delayed for more than 45 days.
I have already written an article on MSME Samadhaan which is accessible from my profile section.
Wrong Marketing/Inadequate Marketing
In the era of digitization, survival of business without marketing is not possible. It is observed that many entrepreneurs, either do not do marketing or they do wrong marketing, which sucks their time and money without giving proper results. So, we have to plan which marketing media is suitable for us, so that we get Maximum ROI on our marketing budgets.
Doing business in legal Way
From past few years, the Government departments are making maximum use of technologies so that illegal business and tax evaders can be tracked easily. So, while starting new business, we must ensure that we will do business in legal and formal way so that we can run our business for a long time.
Disclaimer: This article is for the purpose of information and shall not be treated as solicitation in any manner and for any other purpose whatsoever. It shall not be used as legal opinion and not to be used for rendering any professional advice. This article is written on the basis of author’s personal experience. Adequate attention has been given to avoid any clerical/arithmetical error, however; if it still persists kindly intimate us to avoid such error for the benefits of others readers.
About the Author: The Author “CA. Shiv Kumar Sharma” can be reached at mail – [email protected] and Mobile/Whatsapp – 9911303737/ 9716118384