5 things to keep in mind while starting a business in India
Updated: Apr 26, 2019
There is always something challenging about starting a business. While business founders go through checklist after checklist, it always seems that the finality never arrives. In a way, this is both good and not so good. Good because the 'decision' can now be taken. Not so good because now the action is 'final' and 'irreversible'. In today's startup world of 'Pivot', 'Persevere' and 'Fail Fast', founders are looking at global trends and thereby global markets. With cloud-based technologies and communication tools, infrastructure is no longer a challenge for most startups. An increasing mobile user-base and a growing consumer segment is attracting entrepreneurs to tap into India's market opportunities. While opportunities are hard to miss, founders must understand that running a business in a local market like India presents its own unique challenges. Here is a quick five point checklist that should get you started.
Study Indian local market really well. Run pilot in India on the ground. Not online surveys. Not user surveys in markets abroad.
Don't base market size calculations just on size of population. India is a fractured market due to differences in cultures, languages, level of development etc. Know your real addressable market.
For local knowledge, hire local experts. Do face to face interviews. Preferably, do a Skype /zoom round initially. But getting down here and speaking to local experts is best. Don't go by online newspaper reports alone. Media is biased.
Take a long term approach to business in India. A typical horizon of 10 years is a must. Don't expect quick returns. Give a couple of years to pivot, make mistakes and to figure out a MVP.
Consult a Chartered Accountant / Lawyer based in India for legal entity options. If you are routing money from an investment vehicle abroad, consult your overseas accountants/advisors for the appropriate routing channel. If you plan to invest in multiple countries, create a common investment vehicle - preferably outside India (viz, Singapore or Mauritius).
Bonus point: During the first 12 months, keep your business plan spreadsheets ready and going. Cash can burn quickly if you aren't careful. Some of the costs in India (C-suite, digital marketing..) are comparable to the rest of the world. So you need to be careful about your estimates.
Global trends continue to influence newer startups. At times, global trends alone is not enough. While entering global markets, it is important for founders to consider local context. To achieve this, the mindset of the founders is important. The above points should act as a guide in developing this mindset and achieving entrepreneurial success in India.