Planning to Start Your Own New Business? Begin with the Basics

Posted on Monday, April 7th, 2025 | By IndusInd Bank

Starting your own business is an exciting journey, filled with opportunities and challenges. Whether you dream of launching a tech startup, a retail store, a consultancy, or an online business, getting the basics right is crucial to long-term success.

Many new entrepreneurs in India struggle because they jump straight into execution without proper planning, research, and financial preparation. To ensure your business thrives in a competitive market, you need a solid foundation, clear strategy, and strong financial management.

In this guide, we’ll walk you through the essential steps to set up your new business in India, from defining your idea and conducting market research to securing funding and creating an effective business strategy.

Defining Your Business Idea and Market Research

1. Identifying the Right Business Idea

Your business idea is the backbone of your venture. Here’s how you can refine it:

• Solve a Real Problem – The best business ideas solve an existing problem in the market. Identify gaps in services or products that people need.

• Assess Your Passion & Expertise – Choose an industry you are passionate about and where you have some knowledge or experience.

• Evaluate Market Demand – Ensure there is enough demand for your product/service before investing time and money.

2. Conducting Market Research

Market research helps you understand your target audience, competitors, and industry trends. Here’s how to do it effectively:

• Identify Your Target Customers – Who are they? What are their preferences, income levels, and pain points?

• Analyze Competitors – Study businesses offering similar products/services. Identify their strengths and weaknesses to differentiate your brand.

• Test Your Idea – Conduct surveys, interviews, or small-scale trials to validate your business concept.

By conducting proper research, you minimize risks and increase your chances of success in the Indian market.

Also Read: How Do Business Loans Work?

Setting Up a Strong Business Foundation

1. Choosing the Right Business Structure

The legal structure of your business impacts taxes, liability, and regulatory compliance. In India, the common options include:

• Sole Proprietorship – Best for freelancers and small businesses with minimal regulatory requirements.

• Partnership Firm – Suitable for businesses with two or more partners.

• Limited Liability Partnership (LLP) – Offers limited liability while maintaining a partnership structure.

• Private Limited Company (Pvt. Ltd.) – Ideal for startups and scalable businesses, attracting investors and offering credibility.

Choose the structure that best aligns with your business goals, taxation preferences, and growth plans.

2. Business Registration and Compliance

To legally operate in India, complete these formalities:

• Register Your Business – Depending on your structure, register with MCA (Ministry of Corporate Affairs) or local authorities.

• Obtain GST Registration – If your turnover exceeds ₹40 lakhs (₹20 lakhs for service-based businesses), you need GST registration.

• Apply for a PAN & TAN – Required for tax filings and employee-related transactions.

• Secure Licenses & Permits – Depending on your industry, you may need FSSAI (for food businesses), MSME registration, or trade licenses.

Getting the right approvals early helps you avoid legal issues and penalties later.

3. Setting Up a Business Bank Account

Separate personal and business finances by opening a dedicated current account. It ensures better financial management, tax compliance, and credibility while dealing with vendors and clients.

Managing Finances and Securing Funding

1. Estimating Startup Costs

Before launching, calculate your initial investment. Common costs include:

• Product Development or Inventory Costs

• Office Space or Work-from-Home Setup

• Marketing & Branding Expenses

• Legal & Compliance Fees

• Technology & Software Tools

Having a clear financial plan ensures you don’t run out of funds in the early stages.

2. Exploring Funding Options

If you need financial support, consider these funding sources:

• Self-Funding

• Best for businesses that require low investment.

• Keeps full control with the founder.

• Bank & NBFC Loans

• Leading banks like IndusInd Bank offer small ticket business loans for startups.

• Angel Investors & Venture Capitalists

• If you have a scalable startup, investors can fund your business in exchange for equity.

• Crowdfunding & Peer-to-Peer Lending

• Ideal for innovative product-based businesses.

Whichever option you choose, ensure you plan for loan repayments or investor returns to maintain financial health.

Building an Effective Business Strategy

1. Creating a Business Plan

A business plan acts as a roadmap for your startup. It should include:

• Business Overview & Vision

• Product/Service Offerings

• Target Market & Competition Analysis

• Marketing & Sales Strategy

• Financial Projections & Budgeting

Investors and lenders often require a detailed business plan before approving funding.

2. Establishing an Online & Offline Presence

• Build a Website & Social Media Presence – Digital marketing is essential for brand visibility.

• Leverage E-commerce Platforms – If selling products, use platforms like Amazon, Flipkart, or Shopify.

• Network & Collaborate – Attend industry events, webinars, and local meetups to connect with potential customers and investors.

3. Hiring the Right Talent

A business is only as strong as its team. Initially, hire key personnel like:

• Marketing & Sales Professionals

• Financial & Legal Advisors

• Tech & Product Development Experts (for startups)

If the budget is tight, consider freelancers or outsourcing for non-core activities.

4. Monitoring & Adapting

Track your business performance, sales, customer feedback, and financial health regularly. Stay adaptable to market changes and improve your business model accordingly.

Conclusion

Starting a business in India requires thorough planning, financial discipline, and a strong execution strategy. By defining your business idea, setting up a legal structure, managing finances wisely, and creating a strategic roadmap, you can lay the foundation for long-term success. While challenges are inevitable, persistence, adaptability, and continuous learning will help you grow and scale your business effectively. Take the first step today and turn your entrepreneurial dream into reality!