I had known this person for nearly 2 decades. A salaried person who is working in a small concern and wanted to have another stream of income. During the course of our conversation, I knew he had the fire in him to do business, but couldn’t figure out how to initiate the work of starting a business. It is easy for me to help such a person. As he did not want to risk his capital, after offering him many options, we concurred on a quality product with niche customers. The initial investment worked out to around (Indian-INR) Rs.50,000/-. The amount was very less because it was an online business and the major expenses were for the fees for getting the mandatory approvals. I had to handhold him for each and every step even after the business was rolled. Now, after 6 months, the business is growing in geometrical progression and he is a very happy man. Well, for me, making a person wealthier and seeing a smile on the face of a person due to me gives me immense satisfaction as I sense the fulfillment of my purpose of living in this beautiful planet. So, I am posting the steps on how to commence a small business in India, with the thought that let this post be a spark in someone’s life. Though, the incident given above is an online business, since I had successfully assisted in starting retail(Brick & Mortar) businesses also, I will post the steps for commencement of both these businesses.
- Identify the product/service in which you are interested(I don’t recommend any sin products to my clients. My definition of sin products are the products which includes (i) those which have been obtained by giving pain to another life form(ex-Leather), (ii) those which does no good to the customer(Ex-Tobacco)
- If you are a producer – produce the best quality product(Do not bother about the costs. There are customers out there who are willing to pay the right price for a quality product). If you are a retailer – Identify a trustworthy supplier of the best quality products. Please supply only best quality products. Even if a whiff of doubt arises on the quality, just drop it. Your integrity is at stake.
- Create a separate email account(preferably in the name of the business) and have a mobile number exclusively for the purpose of business.
- Identify an address for the business in order to (i) apply for PAN to Income Tax Department – https://www.onlineservices.nsdl.com/paam/endUserRegisterContact.html, (ii) GST Registration(compulsory for online business) in the GST portal – https://reg.gst.gov.in/registration/ , (iii) In the case of Food products only – FSSAI – (a) Registration(in case of petty retailer) or (b) Licence(in case of producer), (iv) Trade Licence from Corporation/Municipality. The above requirements are for a small proprietorship firm only. In case of partnership firm or private limited company, you may approach a Chartered Accountant for the formation.
- It will be easy if all the items mentioned in step (4) are dealt by a Chartered Accountant(Many do). Please don’t worry much about these initial work & expenditure. It is mandatory.
- Register in the online business portal. Here I give the example of amazon. You require all the above mentioned details and documents for registering in their portal, apart from your current account opened in a bank – https://services.amazon.in/services/sell-on-amazon/benefits.html?ref=as_in_soa_hnav . The links given above may be updated anytime. So, please google and update yourself. Just follow the steps mentioned in the portal for registering and submit the required details and documents asked for. Also take good quality photos of the products you desire to sell for the purpose of uploading in their platform. You will receive a response from them(amazon) through phone or email – approval or either to update. You can also use the paid services of their agents(available in the services section in the website itself) for uploading the details of the products to be sold. You may have to decide to ship the products yourself or through the FBA(Fulfilment byAmazon), which will be easier, but at a small price.
Small shop(Retail-Brick & Mortar)
The term Brick & Mortar business means, the place of business(shop) is physically seen & felt by the customers who purchase the products offered, whereas in online platforms, the images of the products, their description and to some extent the reviews of previous customers are the only tools for selecting a product for purchase by a customer.
All the steps mentioned above, other than registering in the online portal, is required for commencing a business in a small place/shop-it may include icecream/milk/tea parlour, handicrafts, fancy articles like artificial jewellery, snacks, grocery shop or services like photocopying, studio, AC/washing machine/laptop/water filter servicing, etc. GST registration is not required for a new retail business, as mostly the aggregate turnover(total volumes including exempted goods) will be low. However, it is prudent to keep a tab on the volumes, and if the amount is likely to exceed the threshold limit (depends on different places & products or services), registration will be mandatory. The most important factor is identification of an apt place and size, keeping in mind the product and the customer. Nowadays, the amount of capital to be invested mainly depends on the area (residential/commercial) of the shop. The major part of the capital will be towards the interest free deposit of rental advance payable to the owner. While selecting the shop, the next important factor to be considered will be the fixed recurring expenses like rent, wages, electricity & water if applicable. It is always prudent to keep the fixed recurring expense especially rent at a manageable level, for a budding enterprise. A word of caution – I have seen many people doing business only to pay huge amount of rent rather than earn profit for themselves and finally lose their capital also. It is important to remember – Do not bite more than you can chew. Retail Trade does not involve expertise of staff. However, for services/manufacture, the business depends on skilled labour, the retention of which is the most important part of the business. It is always better to have honest staff with higher wages than to have dishonest ones. Above all, consider the workers as part of your family. Try to provide food to them during the working hours. One more factor I advice to look for a shop is for vasthu compliance, before the shop is rented. You are a successful businessman now 🙂
The advantage of an online business for a retailer is LESS CAPITAL, LESS CORRUPTION, UNLIMITED AREA OF COVERAGE and above all, almost REGULAR PASSIVE INCOME.
So, what are you waiting for…