Fostering the spirit of entrepreneurship in you

Fostering the spirit of entrepreneurship in you

India’s core strength lies in a robust base of entrepreneurs who have tremendous potential in galvanising the Indian economy and pushing it on the road to sustained high growth. If you have that entrepreneurial DNA, it’s time to grow your business idea into a startup – and it’s a favourable time to launch a startup in India. In this article, we delve deeper to understand why it’s a good time to become an entrepreneur in India, the challenges you face while launching a startup, government’s initiatives to boost startups and FICCI’s role in nurturing the growth of entrepreneurial ventures.

India’s startup ecosystem is at the cusp of growth. A confluence of factors such as greater flow of investments, new business opportunities, and a growing domestic market indicate that India is geared up to reinvigorate its entrepreneurial landscape. According to a 2014 NASSCOM startup report, the nation is armed with 3,100 startups – the third largest startup ecosystem in the world, and adding 800 startups yearly. There would be 11,500 startups by 2020, employing over 250 million people. Evidently, the Indian startup landscape is turning out to be a hotbed of opportunities and playing a crucial role in shaping up the new economic epoch.

The favourable growth path of startup ecosystem in India is also supported by the current government and there have been many new initiatives, policies and campaigns designed by the government to support the young businesses in our country. In fact, the government is upbeat in promoting entrepreneurship and self-employment to create a long term positive impact on country’s economy. If we look at the developed nations, the startup and SME space contributes close to 50% to the nation’s GDP, supporting large part of employment. Therefore, the young business ecosystem in any economy plays a very significant role in the overall growth of a country.

Fostering the spirit of entrepreneurship in you

Spirit of innovation and passion among startups
In an increasingly competitive landscape, it is only relentless innovation that can help startups grow and be at par with their larger counterparts. Innovation in business begins with the idea, it is supported by the team that you build and it is maintained by constant endeavour of yours to enhance the product or service.
Business Idea: In order to be innovative, you must scan the environment around you and identify a gap. Your business idea should be very clear and must solve that problem or need. The idea must be disruptive as well. It must be surrounded by real numbers with a tight business and revenue plan and must generate income and interest.

Your Team: A good place to start is with the people you surround yourself with. The team you build is the most integral part for a start-up. One must have the right players in the team to make sure that it is a well-rounded effort and you are taking the best crack at the idea that you have come up with. A great idea is the catalyst but needs a right team to make it come alive.

Walk in your customer’s shoes: You may have come up with best idea in the world but you will need to walk in your customers’ shoes to understand if the idea is really solving their problems? Are they comfortable using it? Is there ecstasy when they engage with you? Once you start offering your product or service, you will have a better sense of what your business is becoming. The feedback you receive will tell how you differ from others doing similar things. Your ideal customers and clients will become clearer to you. You will learn many valuable lessons by knowing your customers better.

However, for budding entrepreneurs lack of deep pockets can be a dampener to their business ideas. It can definitely be an arduous task to get their idea off the ground, as well as understand the finer nuances of getting funded. And how do startups, the backbone of any economy, make sure that they have a continuous funding solution that lets them propel on the fast lane to growth? Here is some good news – New technologies and platforms have given small business owners a variety of new ways to make that happen.

The hiccups in your startup plan to watch out for
Starting a new business can be exciting and rewarding. Many startups originate with a vision, but it takes more than just a vision for them to develop into fruitful businesses, including the grit to combat the many bottlenecks facing startups today. Startups are currently wrestling with some of the following most significant roadblocks:

  • Funds for your venture: You’re willing to put in plenty of grunt work to start your business but you need seed capital. Raising funds for business is one of the most daunting tasks entrepreneurs face. According to a 2015 study by Entrepreneurship Development Institute of India (EDI), 78% entrepreneurs in India find it difficult to raise funds at the ideation stage. Trying to win over investors’ trust about a business idea is also a challenge. Trying to convince them that you are confident about your startup idea is a herculean task, especially when you’re launching your first ever venture.
  • Most investors look towards putting money in already well-known businesses, as these businesses entail much less risk than others. Also, investors want to make sure that they get good returns for the risk they took. To tackle the problem of raising capital for your startup, it’s essential to build the capability to market and sell your dream to potential investors. Your business idea needs to be convincing and must be backed by a robust business plan and good influencing skills.
  • Supply Chain and Logistics: Supply Chain and Logistics management is one of the core necessities of a startup. Logistics include all the actions a business carries out to keep its products flowing into the market – from sourcing raw materials, to delivering finished goods at the point of purchase. However, it is a part of the complete supply chain. Supply chain management is more about strategy, planning, purchasing, procuring and inventory management. If you fail to get these elements right, there are chances that you might hamper the growth and future of your startup. Simply put, if your procurement, manufacturing and distribution strategy is not in sync and failsafe, you could be trapped in problems like prolonged delays, additional expenses, or other serious problems. Again, it’s critical to focus your attention not only on launching a business, but also on a robust supply chain management process.
  • Getting customers on-board: Customer acquisition is not easy, but can pay rich dividends if done in the right manner. The most common reason a business flops is inability to target customers – yet many entrepreneurs do not pay enough attention on figuring out the customer acquisition strategies, or don’t know the ways to do so. So if you wish to dive deep into the entrepreneurial terrain, make sure you are armed with an array of strategies and tactics to attract your target customers.
  • Getting the right business team: One of the business challenge you’ll come across while starting your business from scratch is getting the right business management team – a team that works proactively and brainstorm on ways to contribute value to your business. The process of assembling a team starts even before you’re thinking of raising funds for your startup. Interestingly, most awe-inspiring ideas never get funded because the entrepreneur is trying to raise capital as an individual and not as a team. As an entrepreneur, you are bound to have strengths and weaknesses. And so, you certainly need a business team to supplement your strengths and cover up or complement your weaknesses. As an entrepreneur, you also need to make sure your team shares your vision, mission, objectives and goals. They must believe in your capability and must also be zealous about making that capability a reality. Make sure they are able to comprehend your vision and goals, as well as visualise your business’ future as you do. Your strategic business team may consist of your banker, financial advisor, accountant, attorney or legal advisor and any other specialists who will be able to add value to your business.

The road ahead
The Indian startup landscape is currently riding the crest of success – driven by factors such as ample funding, mergers and acquisitions, ever developing technology, and a growing domestic and international markets. This trend of success should continue. According to a Gartner report published in October 2014, the year saw a lot of action on the e-tail (ecommerce retail) turf with private investors pumping in USD 3.9 billion into India’s e-commerce startups, empowering them to scale their businesses. Angel investment has also increased from USD 4.2 million in 2014 to USD 32.2 million in 2015. Funding will continue to be the major driving factor in the startup ecosystem. Merger and acquisition activities of Indian startups will gather pace. Startups will embrace more innovative approaches to attract and retain the right talent. Also, more and more women entrepreneurs will make steady inroads in the Indian startup terrain.

By Mr. R. Narayan, Founder & CEO, Power2SME

Mr. R. Narayan, Founder & CEO, Power2SME