India today is a hotbed for start-ups and entrepreneurs. The scale of economic liberation that the country is witnessing is astounding.
However, and this is a big however, India is also a tough market to do business in. There are numerous cultural, political and infrastructural aspects that can result in more failures than successes. What makes India lag behind other countries in business innovation?
#1 The cost of starting is a lot!
We’re not talking about just the financial costs; the time and effort cost of starting a business in India is not for the faint-hearted. It can be disheartening for a young entrepreneur to make way through the myriad rules and regulations that have been put in place to give body to a process.
Did you know that you need to complete 12 different procedures, and spend nearly half your income per capita, just to get off the ground? Plus, it normally takes about a month to get everything in place. Compare that to the world average of just 9-12 days!
#2 We don’t have a fail-safe business culture
India operates on a wholly different plane of relationships and personal rapport. It isn’t enough to rely on facts and numbers alone to project an image of seriousness. You need to build relationships along with your business.
The same cultural outlook can also sometimes put pressure on the entrepreneur. Success is expected immediately, and not everyone views failure as a step closer to achieving one’s goal. In such an environment, start-ups might get compelled to suppress free-thinking and creativity. Swapping innovation for mediocrity could affect an enterprise’s growth. This is why a start-up must apply the lean method.
#3 Talent hunt
On one hand, there is a severe shortage of skilled talent within the country. Candidates are either seeking employment outside, with larger companies or are entrepreneurs themselves.
The other side of the problem is that having, by chance, found the right talent, a start-up cannot match the high salaries that larger companies offer. This means compromising and settling for the second-best.
#4 How do you get funding?
Unless you have an inheritance, chances are you will need capital from an outside source. VCs and private equities do help, but most entrepreneurs are often grappling to raise funds. And it gets tougher when an enterprise is looking to scale up. The market for investing in a start-up is still very small in India.
What about foreign investment? That too has its share of challenges. The government must be convinced and it must allow foreign investments in many sectors.
#5 The infrastructure doesn’t always keep pace
You are raring to go, but the infrastructure has other ideas. This might not always be the case, and not so much in larger cities. But smaller towns still reel under inefficient power supply, inferior roads, delays due to traffic, network connectivity, etc. all of which can prove expensive.
#6 Want to go international? Good luck with that!
If you want your idea to cross international borders, you will need to overcome many challenges to make it happen.
Do not get disheartened. If you have a great idea, India is a great economy to be a start-up today, despite these hurdles.
The government has launched the ‘Start-up India’ initiative that encourages and promotes the culture of entrepreneurship in India. There are benefits such as tax sops, and a special mobile app that will seamlessly connect start-ups, the government and regulatory authorities. The business of starting a business is also being simplified, with most registration processes made simpler and faster through online systems.
Moreover, mentorship programs like NASSCOM 10000, iSpirt and more are actively involved in the entrepreneurial mood of the country.
Yes, being a start-up is challenging and there will be days when nothing seems to be going your way. But it is possible to survive and flourish, provided you are prepared for the challenges that lie ahead.