India has turned out to be a hub for startups, fuelled by innovation, governmental support, and a growing economy in the digital sphere. However, taking an idea and converting it into a business requires planning and execution. In a previous article, we discussed about the evolution of startup culture in India. Let us now get started with the essential steps involved with starting a startup in India, beginning from ideation to business registration, seeking funding, marketing, and scaling.
Step 1 : Identifying a Problem and Validating the Idea
A good business plan starts by identifying a market need or demand. Understanding what the customer wants is the prime driver of any successful venture. The basis of a startup rests in solving an actual problem that exists in reality with a potential solution. Therefore, entrepreneurs should do their best market research to validate their idea, define the target audience, and assess the competitive landscape. Strategic tools such as SWOT Analysis1 help evaluate internal strengths and weaknesses while identifying external opportunities and threats. Porter’s Five Forces analysis2 provides insight into industry competitiveness, and PESTEL Analysis3 is the framework for broad examination of these factors impacting the business. Using frameworks like these, entrepreneurs can pinpoint market gaps and craft a differentiated offering that meets consumer needs effectively.
Step 2 : Crafting a Business Plan
A structured business plan outlines a roadmap to growth for the startup. This business plan needs to detail its model, revenues, cost estimation, and long-term goals. To better understand these aspects, let’s look at how Zomato4, one of India’s most successful startups, has approached each of these elements:
Business Model : Zomato began its venture as a restaurant discovery platform and evolved over time into an online food delivery and dining experience provider. Business Model- Connecting users with restaurants is central to Zomato’s business model. That is the delivery of food (matched with orders), table reservations, or subscription-based benefits like Zomato Gold.
Revenue Streams : Zomato generates revenues across various streams such as commissions from restaurants on each order, delivery fees from customers, advertising by restaurants on its platform, and subscription fees from Zomato Gold members. This diversification of income helps maintain a stable financial structure.
Cost Estimates : Being a tech-centric company, the top expenses of Zomato include development of technology (app and website), promotion and advertising activities, employee salaries, logistics-related expenses for food delivery operations and restaurants partnerships. It also incurs some costs in acquiring and retaining the customer base through discounts and offers.
Long-Term Objectives : Zomato aims to expand rapidly, improve food delivery logistics, invest in cloud kitchens, and explore sustainability initiatives like reducing plastic packaging. Additionally, it has diversified into grocery delivery and hyperlocal services to stay competitive.
It is equally important to craft a compelling business plan both for securing investor funding and meeting the business’ financial requirements.
Step 3 : Choosing the Right Business Structure
Selecting an appropriate business structure impacts taxation, compliance, and liability 5. The common options in India include:
Sole Proprietorship:
Ideal for single-owner businesses with fewer employees, especially because of ease of establishment, minimal regulatory compliance needs, and autonomous decision-making authority. Profits are taxed as personal income, hence suitable for low-turnover businesses.
Partnership:
Best for ventures involving multiple founders – It offers shared responsibilities and liabilities. It has flexibility in decision-making, pooled resources, and collaboration and one shares profits and losses as defined in the partnership agreement.
Limited Liability Partnership (LLP):
Combines the benefits of partnership with the features of limited liability, thereby offering protection of personal assets. Offers flexibility, less compliance, and tax benefits for growing businesses and credibility.
Private Limited Company (Pvt Ltd):
Ideal for startups in scale-up, which are looking to attract investors, offering the benefit of limited liability and the ability to raise capital by issuing shares. More credibility and growth potential but with added compliance requirement.
Step 4 : Registering the Business
To operate legally, startups must complete certain registration processes. Key steps include:
- Selecting a unique business name
- Registering with the Ministry of Corporate Affairs (MCA).
- Obtaining a Director Identification Number (DIN) and Digital Signature Certificate (DSC).
- Acquiring GST registration if the turnover surpasses ₹40 lakh for goods or ₹20 lakh for services 6.
- Applying for a Permanent Account Number (PAN) and Tax Deduction and Collection Account Number (TAN).
Step 5 : Securing Funding for the Startup
Funding is crucial for business operations, expansion, and innovation. Entrepreneurs can explore multiple funding options, including:
Bootstrapping: Refers to the financing used in funding your startup through personal savings or reinvested business revenues. The entrepreneur would have to work and manage finances personally to save adequate amounts of capital or generate them in initial business activities. It is often the first choice for early-stage entrepreneurs.
Angel Investors: A person or individuals who provide capital for start-ups that are usually early-stage, in exchange for equity or convertible debt. The entry point for accessing angel funding would be networking in startup ecosystems, attending pitch events, or even platforms like AngelList or Indian Angel Network. The entrepreneur should have a very attractive business idea and be able to convince the investor of the growth potential of the venture.
Venture Capitalists (VCs): VCs are investment firms that provide funds to high-growth startups at later stages of development, typically in exchange for equity. Usually, to access VC funding, startups need to have a scalable business model, a proven product-market fit, and some track record of growth.
Bank Loans: Additionally, an entrepreneur may access bank loans through formal loan applications at banks or financial institutions, providing business plans, collateral (if required), and proof of creditworthiness.
Government schemes like Startup India, Mudra Loans, and SIDBI provide financial support through specific programs for encouraging entrepreneurship. These can be accessed by applying via government portals or by approaching associate banks, in case the criteria for eligibility is met.
Crowdfunding: It is an activity of soliciting small amount of money from a large number of people which is usually conducted through online modes such as Kickstarter, Indiegogo, and Ketto, etc. Here, an entrepreneur needs to draft a campaign presenting his product or service and may offer rewards or equity in exchange for contributions made.
Step 6 : Building a Strong Team
Any successful startup requires a dedicated team. A good entrepreneur must hire the skilled professionals with whom he/she is in tune and who can realize the firm’s vision. Clearly defined roles, a work culture of cooperation, and other legal agreements, such as NDAs and employment contracts, must be maintained.
Step 7 : Developing a Minimum Viable Product (MVP)
An MVP enables the entrepreneur to test the ideas before investing much in the venture. Thus, launching a basic version of the product or service would help startups gain user feedback, further organize products based on insights and continue to refine what was produced before launching in full scale.
Startups can launch their MVP on various platforms, depending on the product type. Ideal platforms for showcasing MVPs to early adopters and gathering feedback across web and mobile apps are Product Hunt, BetaList, AngelList, Google Play, Apple App Store, GitHub etc. When it comes to an e-commerce-based MVP, testing could occur on Shopify, Etsy, or Amazon.
Evaluating interest in the market and raising funds, especially for hardware or consumer products, should rely on crowdfunding sites like Kickstarter and Indiegogo. Tools for early-stage marketing would include using Unbounce, Launchrock, or WordPress to build landing pages and capture user information. Other resources would include communities like Reddit, Indie Hackers, and GrowthHackers that offer early feedback from niche audiences and early adopters.
Step 8 : Effective Marketing Strategies
Marketing is one of the critical steps for acquiring traction and getting customers. Good strategies involve setting up a digital presence with a website, social media, and SEO. Engaging with influencers, content marketing, and performance marketing will create more traction for engagement and conversions. Networking and reaching out to stakeholders within the industry can also be enhanced by professional networking, such as on LinkedIn.
Step 9 : Ensuring Legal and Compliance Adherence
You don’t need to know every legal detail, but safeguarding your intellectual property is a crucial step; because certain businesses easily get copied or imitated. Most importantly, trademarking the brand name and logo would protect your identity, patented innovations, and copyrights on any unique products. Follow relevant industry-specific laws as well as labor laws. That way, startups can steer clear of legal challenges, establishing credibility, and protecting your assets from infringement.
Step 10 : Scaling the Startup
Once the startup gains traction, entrepreneurs should focus on optimizing operations, enhancing customer retention, and exploring new markets. Strategic partnerships and securing additional funding can further accelerate growth.
Other key aspects
Government Support for Startups
The Indian government has launched several initiatives to support startups:
The MAARG Portal is a critical initiative aimed at connecting startups with mentors, investors, and relevant resources. Through an AI-based matchmaking system, it offers customized mentorship where startups can seek the best, most relevant experience to address specific needs. A user-friendly interface makes communication straightforward, thereby paving the way for effective interactions to guide startups along their growth path.
Another notable initiative is the Bhaskar Registry, which makes use of blockchain technology to facilitate business registration with more transparency and efficiency while eliminating much of the bureaucratic red tape that often slows down new ventures. The Bhaskar Registry is a centralized digital space for the connectivity of startups with investors and industry experts in assisting cooperation and exchange of knowledge within the startup ecosystem.
For providing financial aid to early-stage startups, the government introduced programs such as the Startup India Seed Fund Scheme, or SISFS. This scheme is an important source of funding for proof of concept development, market entry, and scaling operations, which offers initial validation funding up to ₹20 lakh and scaling funding up to ₹50 lakh 7.
Apart from these initiatives, AIM also helps the startups through incubation centers and innovation labs, mentorship, and innovative project funding. The NIDHI program has played a critical role in assisting incubation centers through seed funding and mentoring. Besides, under the Credit Guarantee Scheme for Startups (CGSS), credit is provided under collateral-free loan up to a guarantee of 75% 8, which ensures that even smaller entrepreneurs with lower collateral assets may access capital for their projects without much stringent requirements.
Inspiring Startup Stories:
The Journey of Zerodha
One of the most inspiring startup success in India is Zerodha, founded by Nithin Kamath in 2010. As opposed to the traditional brokerage firm that charges commission through percentage, Zerodha pioneered a discount brokerage model; it would have flat fees on trades. The invention revolutionized stock trading and reduced the cost much for retail investors.
Kamath bootstrapped the company without any external funding, and he used his experience as a trader to create a platform that addressed the issues of investors. Industry veterans did not believe in the idea, but Zerodha’s transparent pricing and customer-centric services made it popular. It also expanded its offerings to include Varsity, a stock market education platform, and Rainmatter, a fintech incubator.
By 2025, Zerodha became one of India’s largest stock brokerage firms, proving that a disruptive idea, backed by perseverance and innovation, can revolutionize an industry. Kamath’s journey exemplifies how entrepreneurs can challenge industry norms, bootstrap their ventures, and succeed through relentless focus on value creation.
Ola: Adapting an International Business Model Successfully
Founded by Bhavish Aggarwal in 2010, Ola adapted the ride-hailing model of Uber and localised it for the Indian market. It started as an intercity cab rental service, but then quickly pivoted into an app-based transportation model. Ola was different from others because it included auto-rickshaw services, cash payments, and affordable ride-sharing options, thus making app-based transportation accessible all over urban and semi-urban India.
Expanding into electric mobility through Ola Electric, further marked the company as innovative as it launched electric scooters and also established a large-scale battery manufacturing ecosystem. Now, Ola is one of India’s top mobility platforms. These are cases that demonstrate how the startups can actually win in terms of implementing business models in their existing operations which cater to local market requirements.
Turn your ideas into success with hard work and smart planning!
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