When You Start a Small Business in India, You Face the Top 5 Problems
When the country is facing a recession, it is always a good idea to start yourself a small business.
You do not have to look for personal as well as other jobs in the government sector. Rather than being dependent on others, you can start your own business.
In fact, many people in India have started moving towards small businesses instead of following private jobs or government jobs.
However, starting a home based business can be a good option but it is not easy to start.
Generally in India you have to face many difficulties when you are planning to start a small business on your own, but here are the top 5 issues that you need to consider before launching your new business.
Getting a loan to start a business
Capital is needed to start any business small or large. If you are in India and coming from a middle class background then it is clear that you will be unable to deposit enough cash to start a small business.
Therefore, you have to look at banks or other firms who can give you some loan to start your business. Although there are thousands of banks that are ready to lend you cash.
But the problem is that they are reluctant to give to those who do not have a strong financial background.
For example, if you want a loan of Rs 500,000 / – then you have to show your tax returns and many other documents. And it is not necessary that you pay taxes because we are talking about people coming from a modest background here.
Therefore, getting a loan to start a small business in India is the biggest problem especially for the middle class people.
Affordable office space at the right place
Even if you are able to get a loan to start a small business, but the next challenge is finding the right place and the office space at cheaper cost.
As you know, the place is very important in the success of a business. But the place of the office is growing so high that it is impossible to hire a small business owner.
Only big companies can rent for their offices. You will find it really difficult to find the right place at the right price.
There are some businesses that you can not compromise on your place. Like the real estate agency where your office location matters a lot. Similarly, convenient stores and others.
This is especially difficult in urban centers.
Targeted, broad and low-priced platforms to reach customers
Now the next challenge is to face which is reaching customers. If you are starting a small business then people in your area, city or city should know about it.
To advertise your business locally, you have to go through all kinds of things.
You need to be totally dependent on the offline medium for advertising as there is still very little Internet access in India. Online advertising is quite expensive and beyond the reach of many small business owners.
In this way, to expand your business in competition, you need to upgrade the new advertising techniques. But in India it is limited to only major corporations.
Large corporations dominate all major advertising platforms such as TV, radio, online etc.
Cost of daily operations – labor, electricity, logistics
The fourth problem you will face is the cost of daily operations. After being able to get office and after reaching customers, you should be prepared to prepare daily costs for running a business.
Labor is not so cheap because you have to pay them adequately. Then things like electricity are also a major problem. Especially if your business consumes a lot.
Next is logistics, the raw materials required to run your business are also very expensive.
So you have to prepare for the huge cost of your small business’s daily operations.
High rates of income tax
Now if you are capable of managing all the four difficulties above, it would be impossible to avoid tax in India.
If you know that tax rates in India are much higher than other developed countries. If your business is generating at least Rs 100,000 / – to Rs 2,00,000 per month then you will have to pay 30% of your income in taxes.
It has a much higher rate than anywhere else in the world. Thus, high tax rates in India make it very difficult to start a small business.
The main reason for such high tax rates is that India is still a socialist country.
Is there a way out?
After reading more than 5 problems, you may be disappointed to start a small business in India. However, you do not have to lose your heart because there is a way.
It is not necessary that you have to start a small business which is very traditional. You can think of something outside the box which are not the other.
For inspiration you should look around others, not others.
Internet based business
Such a small business that you can start is an internet based business. Online business is very different from other offline small businesses.
It is new in India and is very interested in it.