A Step-by-Step Guide to Setting up a Startup Business with Government Schemes in India

In India, starting a startup business is an exciting thing to do, however, understanding the startup India scheme provided by government can be challenging. In this article, we will walk you through a Step-by-Step Guide to Setting up a Startup Business with Government Schemes in India. In addition, there will be a discussion about the benefits of startup India scheme for setting up businesses and start-up India scheme eligibility criteria. From ideation and registration to compliance, funding, and scaling will be provided in the article.

Short Note about Startup Business

A startup business is generally a new set-up of a company or an organization, which is shaped to bring unique and different goods and services to the market. It is known for its innovative and disruptive nature. As their purpose is to introduce new business models, technologies and solutions to meet particular market’s needs. These businesses are mainly started by entrepreneurs, often with a proper vision to scale quickly and acquire growth.

Here are some features of startup businesses:

• Uncertainty and high risk;
• Growth Ambition;
• Innovation;
• Flexibility;
• Limited capital at the beginning;
• Entrepreneurial spirit

Criteria for setting up a Startup India schemes 

Here are certain criteria for setting up a startup India schemes:

• Structure must be legal such as registered under private limited companies, one-person companies (OPCs), or limited liability partnerships (LLPs).
• The government schemes have decided the age of startups, which will be between 5 to 10 years from the incorporation date.
• Several schemes proposed a maximum annual turnover limit for startup businesses; mainly it is INR 25 Crore to INR 100 Crore.
• Government schemes generally prioritize those businesses, which are innovative, unique, and advanced technologies.
• Several companies provide benefits for a particular sector or field only.
• Government schemes promote startup as it generates employment opportunity in the country.
• One is required to attain certification as a startup from the Department for Promotion of Industry and Internal Trade (DPIIT), the government of India. To attain the benefits of certain schemes.

Step-by-step guide to setting up a Startup business with government schemes in India

Here is a step-by-step guide to help you navigate the process:

• Step 1: Idea and Business Plan
  • Idea Development: Start by identifying a viable business idea. Consider your interests, skills, and market trends.
  • Market Research: Research your target market, competition, and potential customers. Validate your idea’s feasibility.
  • Business Plan: Create a comprehensive business plan that outlines your business model, revenue generation strategy, and growth plans. Be sure to include financial projections.

• Step 2: Legal Structure and Registration
  • Choose a Business Structure: Decide on the legal structure for your business, such as a sole proprietorship, partnership, LLP, or private limited company. The choice will affect taxes, liability, and compliance requirements.
  • Register Your Business: Register your business with the appropriate government authorities based on your chosen structure. To attain the registration of the Private limited company (under the Companies Act, 2013) is a choice, that one can do by the Ministry of Corporate Affairs (MCA) website.

• Step 3: Funding and Financial Planning
  • Prepare a Budget: Create a financial plan that includes startup and operational costs. Evaluate the necessity of the funding to start a business.
  • Seek Funding: Explore various funding options, including bootstrapping, angel investors, venture capitalists, and government schemes like the Startup India program.

• Step 4: Compliance and Regulations
  • GST Registration: Register for Goods and Services Tax (GST) if your business turnover exceeds the threshold limit.
  • MSME Registration: Consider registering your business under the Micro, Small, and Medium Enterprises (MSME) category for various benefits.

• Step 5: Avail Government Schemes
  • Startup India Registration: Register your startup with the Startup India program. This registration can make you eligible for various government schemes and benefits.
  • Intellectual Property: If your business has unique products or ideas, consider applying for patents, trademarks, or copyrights to protect your intellectual property.
  • Incorporate under MCA’s ‘Zero Fees’ Scheme: If eligible, you can avail of the ‘Zero Fees’ scheme under the MCA for company incorporation.

• Step 6: Business Bank Account and Licenses
  • Open a Bank Account: Open a business bank account to separate personal and business finances.
  • Licenses and Permits: Obtain any specific licenses or permits required for your industry or location. Check with local authorities and industry-specific regulatory bodies.

• Step 7: Build a Team and Infrastructure
  • Hire Employees: Recruit and hire employees as per your business needs. Comply with labour laws and regulations.
  • Set Up Infrastructure: Secure a physical location, if needed, and equip it as per your business requirements.

• Step 8: Marketing and Sales
  • Create a website and develop an Online Presence: The online presence can be increased through social media and a website. Invest in digital marketing to reach your target audience.
  • Sales and Promotion: Need to improve your sales and marketing strategy to attract consumers and encourage your goods and services.

• Step 9: Compliance and Reporting: Stay compliant with all relevant laws, including regular filing of taxes and financial reports.

• Step 10: Scaling and Growth: As your business grows, explore expansion opportunities, and continue to innovate.

Benefits of Startup India Schemes 

Startup India benefits of government schemes for startup businesses:

• Financial Assistance: Government schemes give financial help in the form of low-interest loans, grants, or subsidies to support startups to cover their expenses. This financial aid can be crucial in the beginning of companies with limited resources.
• Tax Incentives: Some government schemes offer tax benefits or exemptions for startups, such as reduced income tax rates, tax credits, or deductions. These incentives can help startups save money and reinvest in their businesses.
• Incubators and Accelerators: Government-funded incubators and accelerators provide startups with workspace, infrastructure, and mentoring. They offer a conducive environment for networking, learning, and collaboration.
• Mentorship and Training: Government programs often connect startups with experienced mentors and industry experts who can provide guidance, advice, and valuable insights. This mentorship can help startups navigate challenges and make informed decisions.
• Access to Resources: Government schemes may provide startups with access to research facilities, testing labs, and specialized equipment, which can be expensive to obtain independently. This access to resources can be crucial for product development and innovation.
• Market Access and Networking: Government-supported programs often offer startups opportunities to showcase their products or services at trade fairs, exhibitions, and networking events. This exposure can help startups gain visibility and connect with potential customers, partners, and investors.

Takeaway

We have explored the comprehensive guidance to set up a startup business. The government schemes provide several financial aids, incentives along expertise advice, which can effectively open the doors for entrepreneurship. These government initiatives act like a catalyst, developing your capability to thrive in the Indian startup ecosystem. If one has an innovative idea, then don’t hesitate to take benefit of these opportunities. There are several government schemes for startups in India, and helped in various ways.