Entrepreneur Saurabh Kathuria talks candidly about all the pitfalls Indian entrepreneurs have to face during their lonely startup journey
Our initial journey to starting up our company Infonative Solutions was similar to a baby sea turtle that has just hatched and is making its way into the sea.
This is the time when we were most vulnerable with the biggest fear — what if we fail? So we decided to focus on our core competency and the value we bring to our clients, which gave us a lot of confidence that we will prevail.
While trying to grow strong roots, we had these questions popping up:
Will banks support us?
One consistent fear in a startup is: what if a month goes bad and we are unable to pay the employee salaries and other fixed expenses on time? Can we get support from banks? We learnt that a bank overdraft facility is available but on checking with multiple banks on how to avail this facility, the answer we got was a straight NO!
A business can get this facility only after three years of being in operation. And I thought to myself: after three years in operations who will require this facility?! So financial planning with limited funds became the need of the hour where even the smallest expense had to be planned and ranked in order of priority.
Will there be some tax benefits?
This was again a let-down. As a startup in India, you are not entitled to any tax benefits. Instead, you may need to pay taxes before you get any payments!
For example, the service tax on an invoice — a whopping 14 per cent — has to be deposited by the fifth of every month. Also, the payment cycle of domestic clients is another challenge as it can range from 30-60 days or even 90 days in some cases. Paying 14 per cent tax from your pocket, that too at the beginning of the month when all other expenses are lined up, is quite distressing.
We learnt to raise invoices on the first of every month (preferably) so that we get about 35 days window to pay the tax.
Will there be a mentor or guide for support?
There is no career counsellor or mentor available for startups in India like you have in bigger organisations. No one to teach you the ropes. In this instance, books are your best pals! We also learnt from our clients, competitors and entrepreneurs who were in a similar line of business.
Now the times are changing for the better and there are some very good non-profit organisations to help budding entrepreneurs.
Sole proprietor, partnership or private limited firm: which is better?
Sole proprietorship and partnership firms are easy to open and close. But even more than opening one; closing a private limited firm in India is a long and tedious task. So we learnt that it is preferred to open either a sole proprietorship or a partnership firm in the beginning. Start with it, see how it goes, and then open a private limited company after getting the desired results.
The best part is when you start overcoming initial hurdles, you see your venture evolving and budding.
In my humble journey I learnt that you need to confront all the problems, as brutal as they may be, and never overlook, hide or avoid them. At the same time, you need to have perseverance and trust that you will overcome all the hurdles slowly, one-by-one, and don’t give up!
I am ending with this inspiring quote:
It is your work in life that is the ultimate seduction – Pablo Picasso.
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