With innovation and creativity visibly bursting at the seams in every small corner, there is no shortage of entrepreneurial ventures in India. But with the dream of a start-up, there is the added connotation of stiff competition, bureaucratic procedures, funding, inadequate infrastructure and legal and regulatory compliance.
The global pandemic crisis jumpstarted technology and the concept of online businesses. With that, there came a sudden bloom in start-ups in India, especially those in the digital sector. The future of start-ups does seem to incline towards the promising side with supportive governmental policies and an increase in internet access, thus boosting any businesses with a technical aspect. But that is not to say that it comes without its challenges.
Legal Permits and Licensing- Among the multitude of difficulties that an entrepreneur may encounter in their journey of building a business, the one that remains highlighted are the legal complexities. Legal procedures in India can be excruciatingly time-consuming and the first barrier that one needs to overcome in order to kickstart their venture is obtaining legal permits and licensing from the government, which differ with each business and its locality.
Advertising –Advertising of a business often acts as its ‘make or break’ factor. But with the pressure of good marketing, there is also the need to ensure that the claims made during advertisements are legally correct and verified, and are not misleading in any manner whatsoever. In fact, advertisement of various products such as tobacco and infant formula is completely banned in India, making these industries highly arduous for any new businesses.
Privacy and Data Protection- Although the online mode of commerce is one of the fastest growing today, it brings along with it privacy and data protection concerns. The risks that lie in the violation of a user’s privacy data rights are not to be taken lightly, and to avoid any such offences, start-ups need to be mindful enough to enter privacy policy agreements.
Contracts and Agreement- Contract management seems to be another hassle for these enterprises. A start-up has to undergo various contracts and legal agreements with co-founders, employees, users, supplies and other such involved parties. These contracts must be thoroughly drafted and revised to ensure that there are no legal loopholes to avoid any future conflicts.
Business Structuring- Every start-up must determine the right business structure to be able to strive and function smoothly. Ideal business structures differ on various grounds, such as the nature of the business, the mindset of the entrepreneur, locality, opportunities etc. But it is up to the founders to make a decision on how their business is to be registered (partnerships/ sole proprietorship/ LLPs etc.). These business structures have different taxation systems, and different registration processes and must be well looked into before one makes a call.
Intellectual Property Rights- The concerns over intellectual property rights, infrastructure-related zonal laws, and tortious liabilities also hinder the potential growth of a start-up. Alongside these, the ethical norms must be abided by, ensuring that the start-up follows through with its duties towards employees, customers, environment, community and all and any affected audiences.
Mr. Ratan N. Tata once said, “If there are challenges thrown across, then some interesting, innovative solutions are to be found. Without challenges, the tendency is to go on the same way.” This ideology seems to be the guiding principle of entrepreneurship, and while the potential problems faced in businesses are vast, there are multiple solutions for them.
Marketing- Start-ups are one area where people can use the overpopulation in our country to their advantage. With the solution to the right problem, marketing that strikes a particular target audience and a product or service that is extremely specific, one can increase their chances of success. Start-up owners should also look at rural towns and villages to introduce their products, given that there is lesser competition there as compared to the metropolitans. Start-up companies like CRED focus on the high-end base and show strong growth across the years. Such enterprises also heavily emphasize on the need for a strong and efficient workforce, especially in leadership roles.
With the IT field taking over, the smart choice would be to link the business to technology. This would not only increase the reach and the scope of the business but also the chances for funding and economic growth. That being said, one should be well-equipped when entering into this area of business.
Entrepreneurs also must be well aware of the supportive government policies that they can benefit from. Exemptions and concessions in taxations, legal compliances and financing have made life for start-ups comparatively easier, allowing them to flourish and strive in the cut-throat market spaces. Framing the problem statement, creating an opportunity portfolio, managing the strategic project, linking all plans to financial data and converting assumptions into knowledge through in-depth research are the keystones of a viable business.
Customer- At the end of the day, it all comes down to how user-friendly a business model is, while also being realistically applicable. Companies like Amazon and Swiggy are known for their customer- experience obsessed vision and while adapting such ideologies might not seem feasible during the birth of the business, they are highly beneficial in the long run.
With the rise in start-ups in India, there has been an introduction of legal consultancy agencies which focus solely on helping these companies build from the ground up to be able to thrive in the business environments that exist today. From registration processes, contract drafting and legal checks and evaluations, start-ups can depend on these companies to have some breathing space and focus on their business model rather than the bothersome legal proceedings.
It’s important for start-ups to proactively address legal challenges by seeking professional legal advice, conducting regular compliance checks, and staying updated with relevant laws and regulations. Establishing a strong legal foundation can help startups navigate the complex legal landscape and focus on their growth and innovation. Although the difficulties in starting new businesses are in abundance, the solutions to these challenges are available and practical. The potential of start-ups in India is on a steady ascent and, as the numbers suggest, will continue rising to greater heights.
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