Posted in Entrepreneurship & Startups Articles, Total Reads: 835
A start-up is an adolescent company that is beginning to find its root in the market and grow thereafter. A start-up is usually small initially and financed by few of the founders or an individual. Most of these companies in their early stages realise lower revenues as compared to their expenses. This is usually because the start-ups are unable to get market exposure and they are in the phase of development and testing. Initially start-ups were thought of as only tech companies, but as time passed technology became available to everyone and the differentiating factor of the any start-up became its innovativeness and the business model.
It is important to note that a new company need not necessarily be a start-up. The idea of a start-up is to provide services or products that are not currently being sold to the customers or the founders feel that the particular market segment is under-served.
The main sources of funds for a start-up are banks or credit unions which provide small business loans, Government sponsored small business loans, incubators, angel investors, venture capitalists and even friends and family willing to lend. All funding decisions involve complex trade-offs between near-term and long-term costs and benefits.
A major obstacle for a start-up is that it does not have much of a history and is unable to show profits in its early stages and hence cannot justify its idea of the business. Thus investing in them is seen as a risk by many.
Over the years, start-ups have sprung up in almost every type of industry which includes IT, ecommerce, online food ordering, aerospace, personal transportation, security, education, mobile commerce, etc. One of India’s most famous and successful start-ups, Flipkart, earns revenues of approximately Rs 3000 crores annually. Generally, these start-ups have sprung with an intention to serve the customers better. Most of them focus on services more than products. These start-ups are doing pretty well in India. To name a few, Myntra, Jabong, Flipkart, Uber, Meru, Bigbasket etc are the famous and successful ones. The Government policies also have a great effect on these start-ups. The Make in India is one such initiative taken by the Government to boost start-ups.
Make in India is an initiative taken by the Indian Government, under the governance of the Indian Prime Minister Narendra Modi, to encourage companies to manufacture in India. The prime minister announced the commencement of the campaign a day after India’s successful Mission to Mars. It is by far the most significant and comprehensive policy initiative taken by the Government in recent times. The initiative has found its place in KPMG’s 100 Most Innovative Global Projects being one among the world’s most inspiring and innovative infrastructure projects.
India’s imports are highly valued than its exports. This leads to outflow of cash outside the country. So, to reduce that, Make in India is introduced. The main objective behind this initiative is to provide employment (around 100 million additional jobs by 2022) to the ever increasing population of India and also to increase the level of foreign investments in India which would improve the skills, technology and quality standards and plans to cut red tape. The main focus will on the manufacturing industry. A few sectors have been recognised for this initiative such as IT, pharmaceuticals, railways, energy, textiles, tourism and automobiles to name a few.
The above graph shows that the FDI in India is mainly in the sectors of Manufacturing. This FDI can be used in other sectors like retail to increase the GDP of the country. The Government has thus made changes in its policies. To give Make in India a head-start, changes in some of the policies were made including 100% FDI in railways infrastructure and 49% in defence. Also the foreign equity caps in few sectors were relaxed. The application of licenses was made available online. The government also aims to ease the level of doing business in India to attract new businesses and foreign investments. This in turn is expected to improve the GDP.
The project aims at increasing the domestic value of the country and enhancing its global competitiveness. It also aims at ensuring a sustainable growth for the country, particularly with regard with the environment. The campaign invites world’s top 3000 companies to invest in India. The campaign received with huge appreciation and enthusiasm, and high expectations at the same time. Many companies responded to the initiative, PepsiCo being one of them. PepsiCo Chairman and CEO Indra Nooyi started the largest beverage plant of the country in Sri City, Andhra Pradesh. To summarise, given the changes in choices of the current generation, start-ups can flourish exceptionally, if they please the target audience. Also, if Government is coming up with such initiatives to foster the start-up growth. If one has a good idea and desire to start one, now is the time to do it!
This article has been authored by Apurva Chandravadan from SIMSR
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