Starting your own IT business takes commitment.Let’s face it, here In India, most of the population has to work a traditional job in a traditional working environment, and commuting can be brutal. For example, if you live in Mumbai and have to take the commuter trains, it can drain you fighting through the massive crowds. Few are lucky enough to be able to walk from their residence to their office.

No matter where you find yourself in your career, almost all of us have dreamed of being our own boss and running our own business. We regularly hear of successful entrepreneurs who have made it big. This is an attractive dream, but as David Allen Cole said, “If you’re big-star bound, let me warn you, it’s a long, hard ride.” Still it is an attractive dream that thousands pursue each year. Why not you?

Starting an IT-Based Consulting Business

Believe it or not starting an IT consultancy in India isn’t as hard as it might appear. True, there is probably a great deal more government red-tape and bureaucracy than in the United States, but the formative steps are quite similar. From here on out, I’ll assume you have the requisite IT skills and experience to start an IT business. If not, stop reading now and get back to work.

A business plan. Each great business began with a plan. The most common questions asked are “How many pages,” and “What topics should it cover?” The answers are: As long as it needs to be and all the important topics. A business plan can be any length as long as you cover all of the important topics and answer all the crucial questions. Good business plans are easy to understand and clearly address how you will overcome obstacles. Spend some time researching and reading business plans. Some serious study now can be very beneficial down the road.

Keep in mind, however, that if you are seeking angel or venture capital-based funding, the shorter the business plan, the better. Investors generally dislike reading long, complicated plans. If you are offering an actual software product, then you will also need to go into detail about the specific markets which you plan to enter into and serve.

Select the proper legal form for your business entity. While working on your plan give some serious thought to choosing the proper legal form for your IT consulting business. It can be a sole proprietorship, a partnership, or a corporation (a limited liability company). I suggest speaking with a barrister to help determine the best form for your business. When it comes to software consulting and IT products, the two guiding principles are the size of your company, and will you offer services on a nationwide basis.

Filing the necessary paperwork. The next major task to setting up your IT consultancy business is filing all of the required government paperwork. This can be a significant hurdle — India isn’t known as a bureaucratic morass for nothing. New businesses are required to register with the Registrar of Companies (ROC); complete a Memorandum and Articles of Association (the constitution of your company); the Declaration of Compliance; and the Notice of the Situation of the Registered Office of the Company and Particulars of the Directors.

You will also have to submit all necessary manager and secretary forms. Fortunately, these forms can be downloaded on the Indian government website, and all of the filing fees probably won’t cost more than ₹ 1,000 (about $23 USD).

Local registration. The good news is that the Indian government provides all sorts of tax breaks and incentives in order to help startups flourish. The bad news is that in order to take advantage of them you will need to fully register with your local government entities. Take care to fully register your company with the Indian Department of Employment. Some provinces, (Kerala, Jammu and Kashmir, Maharashtra and Tamil Nadu) actually provide the means to register your company online. Some unfortunately will necessitate in-person attendance.

Also be sure to register with the Software Technology Parks India (STPI). By submitting your business plan (especially detailed sections on marketing and financial), you could be eligible to receive government grants and loans, and even further substantial tax breaks. The onerous burden of paperwork is likely to be frustrating, but it can also pay worthwhile dividends. Don’t skip doing the paperwork. A little time now, can save a lot of time and money later.

Web Stores

The IT consultancy business in India is an extremely competitive market. It takes a lot of experience, know how, and personal contacts in order to successfully penetrate these two segments. Fortunately, there is a new and emerging type of software business in India which the budding entrepreneur can crack and be successful at (which is measured by making a profit). This is the online store. There are many ways you can sell products and services online, and it can work for any industry, it doesn’t even need to be IT-related.

For example, one of the best ways to start selling products is by becoming a reseller for another company. In other words, you become a distributor and sell their products in your online store at whatever price point you want.

Consider some of these compelling statistics for India’s online marketplace:

  • In 2015, more than 28 million Indians will complete a purchase from an IT E-Commerce related business — a staggering 18 percent increase from 2014.
  • The best way to get potential customers to an IT-commerce related website is by offering special discounts and deals (such as on IT hardware, or even consulting services).

Let’s assume you’ve decided to capitalize on the online market. Here is a quick, step by step guide:

Register with a reliable Internet Service Provider (ISP). It’s actually fairly simple to register a domain name, and it typically costs less than ₹ 600 to maintain it under your ownership. Additionally, most Indian based ISPs offer unlimited web hosting for as little as ₹ 500 per month.

Select an ISP with a dependable record of keeping websites up and running. Don’t settle for a mediocre service provider; it just isn’t worth it. You don’t want your e-commerce site to go down for any reason, for any amount time, as this will only ruin your brand and reputation. You want a provider that maintains their customer website uptimes at 99.999 percent or greater. When you open an account with an ISP, make sure the agreement reflects this 99.999 percent uptime guarantee.

Create your online store. Once you have established your e-commerce account with an ISP, you will now create your online store. You can do this relatively easily by utilizing the thousands of templates that your ISP typically provides, or if you really want something fancy, you can hire a specialist to custom create your online store for you — obviously the more expensive route.

When creating your online store, these are some necessary things to consider:

  • Take care to ensure that your contact information, email, business address, phone/fax number, and so forth are correct and clearly stated on your site.
  • Create a simple and straightforward contact form for customers to be able to reach out to you. A frustrated customer isn’t likely to be a return customer.
  • Include links to all of your social media sites, most importantly that of Facebook, LinkedIn, and Twitter.

If you are planning to create and launch a mega-sized IT-related e-commerce store, then you can use an e-commerce Content Management System (CMS). CMS allows you to easily post new information and offerings to your site. Some of the more proven and popular CMS brands include Magento (Community Edition), Presta Shop, Cube Cart, OS Commerce and Zen Cart.

  • Payment must be simple and easily accessible. Select the appropriate gateway in which to process credit card and other forms of payment. Some of the most popular payment platforms include PayPal, Google Checkout, MoneyBookers, 2Checkout, CCAvenue, Payumoney, and Airpay. Keep in mind that if you are shipping tangible IT products, you will need a logistics carrier as well. I strongly recommend one with a great track record in India (DHL, UPS, etc.).
  • Customers aren’t just ordering off their desktop computers. As of August 2014, 50.3 percent of e-commerce activity was via mobile device. With the spread of Smartphones in India this percentage is only going to continue growing. Take care that your e-commerce site can be viewed quickly and easily (especially the payment gateway portion of it as well) across all the major Smartphone brands including the Android, Samsung, and iPhone lines.

Difficulties in Launching an IT Business E-Commerce Store

Success in any venture is rarely simple, there are always unexpected obstacles to navigate. Keep in mind that even if market conditions are ripe and the profit potential strong, launching an IT-based business in India mean you have a number of major hurdles to overcome. Some of the more common ones include:

  • Starting your own IT business takes commitment.Construction permits. With an e-commerce storefront, the probability of needing an actual brick and mortar establishment is very low. But if you need to build such a place, be warned that it can be an arduous and lengthy process to submit the required paperwork and obtain the necessary permits. Presently, it takes almost 200 days to get the ridiculously required 34 construction permits from various government entities such as the Tree Authority, the Storm Water and Drain Department, the Sewerage Department (not part of Storm Water and Drain), the Electric Department, the Environmental Department, and the Traffic & Coordination Department. Truly, an Everest-like effort can be required.
  • Electricity. Compared to the rest of the world, purchasing electricity in India is an inexpensive proposition, amongst the lowest in South Asia. But, actually getting that electricity into your building remains a most daunting task. According to inside sources, it can take up to three weeks to get the necessary electrical connections in place, and have an actual meter installed at your place of business.
  • Contracts. When launching a new IT-based consultancy (especially if you are developing software for particular applications), you need to first create a contract and then, when necessary, have it actually enforced. Creating the contract is easy, having it enforced in a court of law is a totally different matter. India ranks among the worst in the world for contract enforcement via the courts, with an average wait of 1,420 days just to be heard by a magistrate. Good luck if you have a dispute.
  • Paying taxes. In the United States, people complain about navigating a complex tax code to complete their taxes by April 15 of each year. Believe it or not, India’s tax code, although shorter, is even more complicated. An IT entrepreneur in India will make a total of 33 tax payments per year to various government entities, taking 243 hours of attention of a tax professional, devouring even more from your bottom line.
  • Bankruptcy. In the all-too-common likelihood that your venture fails, you will still need to deal with legal and business issues for years to come. The Indian marketplace is amongst the worst in the world for resolving issues of business insolvency. It can take almost five years, thus greatly impeding any future business relationships which you are trying to build and establish.

Conclusion

If you dream of going out on your own and becoming the next Tech Mahindra or TCS, realize that there are substantial road blocks to success. But at the same time there are also wonderful opportunities for an idea whose time has come. If you feel like you have the pluck to face fearsome odds and never quit, then go for it. Remember, “Fortune is a fickle mistress, but she loves the strong and smiles her favor on the brave.”