According to the 2012 Report of the Planning Commission, India will have to create approximately 10 to 12 million jobs every year in the course of the coming years in order to mitigate the challenge of unemployment.This number seems daunting in the context of the current economic scenario when most organisations are employing a cautious and measured approach in terms of expanding the human resource bandwidth. “Establishing new enterprises is definitely the way forward,” says Krishna Tanuku, executive director, Wadhwani Centre for Entrepreneurship Development, Indian School of Business, Hyderabad. As the Indian economy continues to grow, opportunities for entrepreneurs are increasing, particularly in the healthcare, hospitality and education sectors. “Also continuous advancements in information technology are giving a huge fillip to this sector and almost anything that is e-enabled does find a ready market,” says Meeta Wasan, director, Doon Consulting, an entrepreneurial firm that deals with direct marketing company of IT products and solutions.
Before embarking on any entrepreneurial venture one has to be conversant with the ecosystem of this sector. “Unfortunately most aspirants have little or no knowledge of the linkages within the ecosystem,” says Tanuku. He continues, “Usually people think that ideas and money alone are sufficient for starting great enterprises. While ideas and money are necessary, knowledge of existing innovations is equally critical. For instance, in order to build a successful enterprise in the domain of life sciences, an aspiring entrepreneur should know what the latest innovations in biotechnology and pharmacology are. Further, he/she should also know where and how to access the same. However, in most cases, people do not know about innovations.” Among other ways, one can gather this information by joining knowledge networks like the National Entrepreneurship Network (NEN) or any of the several entrepreneurship forums. Elaborating on the importance of these networks for starters, Tanuku says, “These are the veritable sources that orient people with actual ground-level challenges and opportunities. Also, they get to learn from the success and failures of other people.”
It is important to understand that different stages of the entrepreneurial venture have different requirements in terms of finances and hence it is necessary to have a funding plan. Even the ones who have considerable ready capital can self-finance themselves only upto a certain stage. Angel investors, who usually provide capital in lakhs or over a crore, can be approached in the early stages when one is struggling to transform the idea into reality. After the idea has manifested it has to be turned into a prototype by dint of which the entrepreneur can enter into the market. The hallmark of every successful business idea is proof of concept. In other words, it has to be commercially viable and scaleable. It is at this stage that venture capitalists come into picture. “Venture capitalists essentially fund the steps necessary to establish the commercial viability of a new product, process or service are usually provided by venture capitalists. This funding is also given by several government organisations such as the Department of Science and Technology and Department of Biotechnology,” says Tanuku. After proof of concept is established one can approach private equity firms that provide funds on a large scale between $5 and $10 million. “After the enterprise has significantly consolidated its presence it comes to a stage when it can raise funds through an IPO that in turn will enable it to grow in scale and stature,” explains Tanuku.
Proper registration of one’s enterprise is another important imperative. “For a smooth registration it is important to work with a reputed chartered accountancy firm,” says Wasan. “If one chooses to not work with a CA firm - the process may entail a few trips to the office of the registrar. However, it is a fairly straightforward process. Also at this time one needs to have a preferred list of names for the company and propose a minimum of at least two directors who have the necessary identity and residence proofs,” she adds.