If you’re a woman who’s thinking about starting your own venture, well, you need to stop thinking. Starting your own business is not only enormously satisfying, but it also allows you to be flexible with the work load that you take on because you’re not answerable to anyone but yourself. If the idea of starting a business feels daunting to you, remember that the key to success is taking things step by step. Here is a list of essentials that every small and medium business woman in India needs. Conquer this list before you conquer the world.
Registering your business
Are you going to be a solo entrepreneur? Or are you starting your venture with a partner/partners? If you’re flying solo, you don’t require any particular registration, although The Companies’ Act 2013 does have a provision for One-Person Companies. If you’re thinking of doing business with few others, then you can consider registering it under The Limited Liability Partnership Act, 2008. Registering your business might seem like a painful process, but there are plenty of professionals out there who can help you out. Registration makes your business a separate legal entity and gives it a great deal of legitimacy.
There are a number of banks that offer loans at subsidised rates, and with reduced requirements for women entrepreneurs. SBI, for example, has a Stree Sakthi loan that gives loans to businesses where more than 50% of the ownership is rested with women. Similarly, Dena Bank has a Dena Shakti loan that is focused on financing small businesses owned by women. The Mahila Udyam Nidhi, set up by The Small Industries Development Bank of India, also gives loans to businesses exclusively owned by women. Additionally, the Government in 2015 announced the ‘MUDRA’ scheme which gives loans to startups in various levels of growth at a reduced interest rate.
A current account
If you want to be taken seriously as an entrepreneur, your business needs a current account. A current account is a bank account that is allowed an unlimited number of deposits and withdrawals and enables you to conduct your day to day operations smoothly. You do not earn interest the way you would with a savings bank account. You will need to maintain a higher balance, but the advantages that a current account can bring business are manifold. Apart from smooth transactions, it allows you to keep your business accounts separate from your personal account. Arriving at your business’ total income and expenditure is far easier with a current account. Many banks also offer an ‘overdraft’ facility where the bank allows you to make payments to those whom you owe money to, even if there are insufficient funds in your account.
If your business is restricted within the state you are in, and your receipts don’t cross Rs 20 Lakhs a year (Rs 10 Lakhs if you are in the North-East), you are exempt from registering for GST. However, if you do supply your goods/offer services across states, then you will compulsorily have to register for GST because you fall under ‘inter-state’ supply, which is not exempt from registration. Small businesses can opt for the composite scheme where you can charge a nominal rate of GST, however, this will be from your own pocket, and not something that you can charge your customer. Additionally, if you are starting an e-commerce business, you will not be eligible for the composite scheme. For complete clarity, do take the time to consult a professional. It’s important that your GST paperwork and procedures right when you start your business, so you can avoid any unsavoury experiences with tax authorities in the future.
Setting up a business takes time and effort, and can be especially challenging when you’re a woman entrepreneur. Remember that it all pays off in the end, because when you give your business a strong legal foundation, the direction of growth can only be up.