#7 Key Points A Foreign Entrepreneur Must Keep in Mind
India, today, has become an innovation hub and one of the entrepreneurial engines of the global economy
Like any other country, India too has its own set of challenges along with myriad opportunities to succeed.
India, today, has become an innovation hub and one of the entrepreneurial engines of the global economy. The country is the world’s third largest economy and has a huge market for enterprises interested in setting up their businesses.
The revolutionary initiatives of the Government of India, including Goods and Services Tax, Demonetisation, Digital Payments and Make in India Mission can be controversial in result estimation but serve as a strong indicator of the Government’s dedication to formalize the country’s economy and, offer all the more opportunities to new entrepreneurs as well as established ones, to rise on the growth curve.
Starting up a business in India might look tedious, but is not impossible. It requires a lot of fixed paper work and it is better to take help of local legal advisors.
Earlier, policies around doing business in India were comparatively more rigid in nature and required an enormous amount of time and energy. However, the recent initiatives by the government make the work of aspiring entrepreneurs a lot simpler.
The amendments in the companies’ law have far-reaching implications that are set to significantly change the manner in which corporate operate in India. Entrepreneurs keen on setting up new enterprises will be able to do so by filing just one form against the eight separate forms earlier, as a part of the government’s drive to make it easier to do business in the country. The government wants to reduce the time taken to register a company in India to one day. This initiative is aimed to improve India’s ranking on globally tracked parameter of ease of doing business.
Let’s have a look at seven important points that a foreign entrepreneur must understand and absorb so that he/she doesn’t feel deterred while doing business in India:
Entrepreneurship requires a lot of time, mental effort, hard work applied in proper place, in right direction and at proper time, so unsurprisingly, many initiatives end up failing. But if your company survives, the rewards of entrepreneurship are well worth the obstacles you overcome on the road to success.
Following are few essential steps that all entrepreneurs should consider for establishing their business:
- Test idea viability – do market research and intelligence to know the trends, consumer choices, competitors, meet potential customers, etc.
- Check legality of the business, government licenses and permits required
- Take care of finance - be sure that resources will be enough to support polishing your product till market fit, and multiply by two
- Assure that you are able to utilise the latest technology in the field
- If you are a foreigner, try to build local expertise through more careful process team building
The regional practices of a state are one of the most important things to consider before setting up a new business. One should do a thorough research about the location and the local practices, demand for particular service or product, information need of the consumer, etc. Even some states have different industrial laws and compliances that need to be met. Doing this will help understand the pros and cons of setting up a business in that particular area so that the business owners get settled in smoothly.
For example, with news like; ‘National Incubators and Accelerators to be set up for start-ups’ few state governments have signed MoUs with NASSCOM (National Association of Software and Services Companies) on setting up incubation centres for start-ups. Cities like Kolkata, Vizag, Bengaluru, Pune, already have these incubation centres and are very helpful.
Consumer Behaviour vis-à-vis Marketplace
Another important point to consider is the consumer sentiment. Indian online consumers are educated enough, like in any other country and they are well aware about the product and services that they wish to have. They also like good content and rely more on pictures than on detailed description.
The information provided about product or service has to match real delivery. Thus, business owners should be careful with their products that they are offering and sending to their consumers. They must be as per the specification, should be genuine, and delivered on time.
In case, a mistake happens at any stage, there should be an easy return or exchange policy. Situation like these, if not taken care of, can tarnish the image of the brand. Therefore, it is important for the company to react momentarily and train customer relationship personnel well.
Free market competition is the basis of modern capitalist economy. Due to an open fight for consumers, better services are provided and new ideas emerge. It means identifying competition and staying informed about their products and services, in order to react accordingly, is important for the survival of any business.
Be aware of markets which are easily penetrable by relevant industries’ behemoths which are attracted by size and growth of Indian consumer market. Their free access to resource cannot be beaten even by better service but with higher price.
So, the best approach is not to bother oneself about what others are doing if you know the target and you are persistent in realising your dream.
With high economy growth and many new ventures established, good candidates are scarce resource in the Indian market. For a small business or a start-up to grow, entrepreneurs must attract talent pool with favourable work policies and reward systems. The most important attraction for employees in a start-up is the opportunity to do a wide range of tasks and learn with faster growth prospects. The potential of promotion is always much more for an active in-house worker, since it is easier to assign new responsibility to someone already involved in processes.
It is extremely important for an entrepreneur to have the latest technology in place for smooth functioning of business. Even if your company is not from information technology sector, still you might use and integrate into your processes the latest products which play an important role in offering innovative as well as agreeable services to the customers.
For example, in e-commerce businesses, companies have no choice but to align with online banking and other payment requirements, connect with delivery companies via Application Programming Interface (API) rather than manually enter information into complicated logistics forms. A company has no other choice but to follow a dynamic approach, embracing all variables to accommodate all business and customer needs.
Government Policy and Regulations
The pace of changes in India is really high, so an entrepreneur must keep himself aware of the latest news about the industry and government interventions. For example, business environment is highly sensitive to policy shifts with respect to foreign direct investment, digitization, GST, demonetization, labour laws, etc. to name a few. Information like, ‘FDI has accelerated from $ 36 billion in FY 2014 to $ 60 billion in FY2017’, also must be known to an entrepreneur as such information reflects changes in the economy of country.
In total, the size, growth pace together with recent developments in the Indian economy are favourable for any promising business venture, be it led by an Indian or a foreigner. The new economy that is being created is globally cost-competitive, enabling a better business eco system for any investor in India.