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Government Of Assam Industries & Commerce Commissionerate of Industries & Commerce

Invest in Assam: A Comprehensive Guide to investing
How to invest

Starting a business / industry

Preparing yourself

  • Find out Business Opportunities
  • Market Survey
  • Selection of Business Organization
  • Name & Registration of Business
  • Selection of Product
  • Finalizing Location
  • Identifying & Understanding Target Customer
  • Infrastructure Setup
  • Arranging Project Funding
  • Policies & regulations

1. Find out Business Opportunities

Entrepreneurs should undertake the task of preparing business plan before starting a new venture. One should consult with lawyers, consultants and accountants before reaching any final decision. The nature of business is the most important decision. Businesses providing direct services like tailors, restaurants and professional services like doctors, lawyers are generally organized as proprietary concerns. While, businesses requiring pooling of skills and funds like accounting firms are better organized as partnerships. Manufacturing organizations of large size are more commonly setup as private and public companies.

2. Market Survey

Market study is one of the most essential activity that is required to understand the feasibility of the enterprise to be setup. Market study helps to get a better picture of the prevailing competition, existing gaps in the market, consumer needs and preferences etc. This gives confidence to the entrepreneur that his/her product/service is a niche one, having substantial prospects for growth and capable of attaining a competitive position in the market.

3. Selection of Business Organization

After going through the Market survey, one needs to make the choice of the form of Business Enterprise he/she would want to setup. Making the correct choice is very crucial as it determines the power, control, risk and responsibility of the entrepreneur as well as the division of profits and losses. The various factors that need to be considered are -- Scale of operation, degree of control, amount of capital, volume of risks and liability, tax liability etc.

Some of the forms of Business organizations are:-

  • Sole Proprietorship
  • Partnership firm
  • Co-operatives
  • Private & Public Limited Company
  • Societies
  • Limited Liability Partnership

4. Name & Registration of Business

All the business must be named and registered with the competent authorities as below:-

  • Sole Proprietorship - Sole Proprietorship is a legal entity and does not require any registration for the name.
  • Partnership Firm - A partnership firm can be registered with a Partnership deed where in the rights, duties and liabilities of partners are laid down. In absence of a deed, the provisions of The Indian Partnership Act, 1932 would apply
  • Co-operatives - Co-operatives need to be registered with the Registrar of Co-operatives Societies.
  • Private and Public Limited Company - Registrar of companies appointed under the Companies Act, 1956 are vested with the duty of registering companies.
  • Societies - It must be registered with the Registrar of Firm & Societies.
  • Limited Liability Partnership -- To be registered on the website of Ministry of Corporate Affairs, developed for LLP services.

5. Selection of Product

The choice of a particular product or service to be manufactured by the firm can be done by analyzing the following:-

  • Assessing the size and structure of the market for the products.
  • Determining the future demand pattern for each of them.
  • Comparing their competitive positions in the market.
  • Graphing the life cycle of each product.
  • Finding the shelf life of each product.
  • The ease of availability of raw materials
  • Technology for production.
  • Manpower.
  • Government policies, regulations and incentives by both state and central government

List of some of the important organizations who can help in obtaining an idea about the products and services that can be produced are:-

6. Finalizing Location

Location of the business is the most important factor influencing its success or failure. It is a long-term decision which should take into consideration not only the present requirements of the organization but also its future expansion plans. Hence, the most advantageous location is that at which the cost of gathering material and fabricating it plus the cost of distributing the finished product to the customers will be at a minimum.

The choice of location depends on several important factors:-

  • Availability of required raw materials.
  • Availability of required grade of labour i.e. skilled, semi-skilled or unskilled.
  • Proximity to the product market.
  • Availability of transport facilities
  • Adequate supply of power and fuel.
  • Climatic factors based on the product types.
  • Government regulations and policies.
  • Law and order situation.
  • Existence of complementary and competitive industries

7. Identifying & Understanding Target Customer

It is very essential that there is serious thought given behind Consumer taste and preference. Supply is dependent on demand. So it is very important to understand existing customers and find out ways to target new customers. Innovative and creative ideas need to be constantly developed to attract more and more customers. Price, design and utility of the product will have to undergo constant rectifications to align with customer’s needs. Depending on the product a certain segment of the population needs to be targeted. Trying to lure all age/income group might not work out, so it is always advisable to narrow down the target population.

8. Infrastructure Setup

Setting up basic infrastructural facilities for commencing business operations requires Land and Building. For acquisition of the plot of land, the entrepreneur must approach the concerned authority (Municipality, Land Revenue & Settlement Department). The architectural design of the factory must be approved by the concerned authority before starting the construction of the building. The site must be well connected to the nearest transport network i.e. rail, road or port. The availability of the basic amenities like, water, power supply is equally essential. Setting up of a good telecom facility for the industry is necessary for the growth and expansion of the business.

The State and Central Government offers incentives like land and building tax concessions, providing land at cheaper rates through the Government Agencies to new and existing entrepreneurs. It also offers concessions in water tariff, power subsidy, subsidy on generating sets, capital investment subsidy, transport subsidy, insurance subsidy, incentive for pollution control and quality equipment depending on the location, size of investment and category of the industry.

The next step is to select appropriate technology and equipment to produce. In addition to this, the source of raw material has to be decided upon. The requirements of all these can either be met through domestic sources or can be imported subject to the regulatory requirements of the Government.

9. Arranging Project Funding

A business firm requires finance to commence its operations, to continue its operations and for its expansion and growth. Hence, a financial plan needs to be prepared, which indicates the requirements of finance, sources for raising the finance and the application of funds. Financial planning for starting a business begins with estimating te total amount of capital required by the firm for the various need of the business.

A firm may raise funds for different purposes depending on the time periods ranging from very short to fairly long duration and the business can be financed by the following means:-

  • Investment of own savings
  • Raising loans from friends and relatives
  • Loans from Commercial Banks
  • Loan from Financial Institutions
  • Public deposits
  • Reinvestment of Profits
  • Issue of share -- Equity / Preference
  • Issue of Debentures
  • Trade Credit
  • Discounting Bills of Exchange
  • Bank O/D & Cash Credit

10. Policies & regulations

Once an entrepreneur has taken all the important decisions relating to starting a business, he/she has to take into account the basic regulatory requirements which are to be followed for setting up the organization. Policies are issued by both, the Central Government and State Governments. Policies can range from being relevant to a multitude of sectors, as well as being specific to a single sector. Policies are of extreme importance as they can determine the growth potential as well as the ease of doing business in a particular industry. Therefore, entrepreneurs should pay close attention to the Government (both Central and State) policies.

The most important policies and regulations are:-