You need to consider a lot of things before setting up your own venture. As a first time entrepreneur, you will come across a lot of hurdles and roadblocks; knowing and being prepared to handle problems is probably your best option. Experience can be your best guide and the perfect way to make things easy for yourself is to take the help of a seasoned businessman (mentor).
bA business idea is great but absolutely useless unless documented in the form of a business plan. While writing a business plan seems like too much hassle, remember that no good investor worth his salt will invest until he checks out your business plan.
A marketing strategy, projected sales report and business environment analysis are the most important factors in your plan (from the investor’s perspective). You should also have a practical exit strategy if all fails. Don’t obsess over the past.b
It’s perfectly natural to make a few mistakes along the way. Learn from your mistakes and move on. Don't be depressed when you hear about failure stories from your competitors. Rather, analyze those mistakes and make sure you never commit them. Hire with a sensible approach. Getting all your friends and relatives to join may seem like fun but it doesn't make business sense.
Scouting around for the cheapest employees is also a bad idea. Hire people who will serve as assets to your company and pay them enough in order to retain them.
Unique Characteristics of Indian Service Vendors
Many start ups often use freelancers, third party agencies or individual professionals to get some part of the work done. Though specific laws vary across kind of company or person hired, there are 3 important aspects to keep in mind.
If you have hired a company (sole proprietor or Inc) as a service provider, they are sure to charge you service tax. If the service provider has crossed the 9 lakh benchmark in a financial year, you will be charged service tax above 12%. Any payment calculations you make should be made with cognizance of service tax. If you are working with an individual, you will have to deduct a certain amount from the pay and directly pay taxes to the relevant authorities.
Indian vendors are famous for smooth talking and disregard for documentation. Remember to maintain proper service contracts with all your vendors. In case of failure to meet service expectations, a service contract will enable the concerned authorities to take action. The terms to be covered in the contract are service expectations, milestones, terms and conditions and payment modes.
If your service provider has a SLA (Service Level Agreement), read it carefully and check for loopholes. Always go for milestone payments when working with professionals. Once you pay the entire amount to any person, the desire to work hard for it automatically decreases. Also, recovery of money for lapses in commitment is also quite difficult. Mutually discuss and decide upon nature and frequency of milestones with your service providers.