Checklist for Starting Up

Here’s the list of things needed to start a business:

• Finding a good startup idea

A good business start-up idea is the foundation of success for any startup. Your idea should be such that it has market acceptability and the potential to become significant. Surprisingly, too many startups go into the market thinking they have an excellent service or product, failing to realise that the masses may not reflect the same sentiment.

Such startup ideas revolve around the preferences or sentiments of the founder—something they like or think others will like. But ideally, products and services must cater to the needs of the people, not the preferences of its founders. This is why the best startup ideas are the ones that cater to the pain points of the people.

For starters, you can begin with a significant problem you are facing or think many people face. If you have a solution to that problem that you feel can be converted into a good business opportunity, then you just need to know whether others are also facing the same problem. If the answer is yes, then you have got your product and market for your new business start-up.

• Market research

Testing the feasibility of your product or idea is important. This will let you know whether your idea is worth pursuing or not. Targeting the wrong target market is one of the reasons why many startups fail in a short time. Sometimes, what you feel is a great idea might not be welcomed by the market. Therefore, a good way out is to do thorough market research. This includes deciding the following:

1. What is the problem?
2. Does everyone face it?
3. Who are the target customers?
4. What is the market size?
5. Whether any alternative solution available to the problem?

• Prepare the financials and business plan

It is one of the most critical factors, i.e., studying the financial feasibility of your idea. Studies say that only 80% of startups don’t survive after one year, and finance is a critical determining factor. Businesses are for profits. If you have a great business start-up idea, but it does not have the potential to generate profits, then your business won’t sustain for long. 

• Deciding the constitution of your business

You need to establish your business legally. You need to decide on the constitution of your business. Creating a company is one of the most preferred options for startups. Apart from company startup, other constitutions include partnership firms and Limited Liability Partnership (LLP) firms. Whatever format you select, you need to incorporate your company formally.  

• Raise investments

It’s time for execution! So start finding the investors for your business and get on the ground! As per Times Now, startups raised a record $ 24.1 billion in 2021. Having an investor’s backing provides a financial assurance and helps the founders in terms of strategy, team building and network.

In a Nutshell

You can follow the above steps to start a small business and grow it into something big. It’s time to start planning and get on the grounds. You also need to plan for your mission-critical and operational stuff like:

• Renting your office space
• Hiring talents
• Deciding the domain name
• Creating a website
• Setting up social media accounts
• Marketing your product.

The key to a successful startup is delivering a superior customer experience. For instance, startups face difficulties when it comes to accepting international payments from their customers. What’s the solution then?

The solution lies in an ideal payment gateway that easily facilitates domestic and international payments.

PayU offers 150+ payment modes to customers along with the acceptance of payments in international currencies. This has enabled startups to expand across borders.  

Frequently Asked Questions

The post How to Launch a Startup? A Detailed Checklist appeared first on PayU Blog.

1. Burned out

Around 5% of start-up businesses cited burnout as their reason for failure. Stagnation in growth and team interest, improper work-life balance, and lack of innovation are possible reasons for a start-up business to experience burnout. Start-up founders find themselves overworked, which leads to an eventual fall in drive and enthusiasm.

Thus, it’s imperative to know when your efforts are heading towards a dead end, cut your losses, and redirect your energy toward a more productive venture.

2. Pivot went wrong

One of the most famous examples of a successful pivot is from Burbn to Instagram. When done right, pivots can be a shortcut to success. On the contrary, even a high-profile start-up business can suffer unimaginable losses due to a pivot if done wrong. A whopping 6% of start-ups have claimed it as the reason for their failure. Thus, pivots should be well-planned and executed to avoid unfortunate results.

3. Poor product

Often, it is not the people but the product that brings about the end of a newly established start-up – as was the case with 8% of the businesses in the survey. Using aggressive sales tactics is only successful when you have the reassurance that your services won’t fall short of the quality they’re promising.

Similarly, ignoring the needs and demands of consumers in favour of applying your innovation leads to failure. A good start-up business requires the ability to read trends and adjust products. 

4. Product mistimed

The timely release of a product is an essential factor in determining its success or failure. However, having a good product doesn’t guarantee success. Releasing it too early into the market may lead to the public disregarding it, while releasing it too late might make you miss your window of opportunity. This issue was faced by 10% of the start-up businesses, who mistimed the release of their product and suffered for it. 

PayU is a well-doing startup enabling other businesses to grow and find accessible payment solutions. 

5. Not the right team

A myriad of skilled individuals is required to keep a start-up business afloat. Around 14% of failed start-ups have regretted not being able to accumulate the right personnel for their ventures. A new start-up frequently fails for the following reasons: poor management, hiring inexperienced workers, and frequent leadership changes.

6. Pricing/cost issues

Striking a proper balance between pricing a product high enough to generate a profit yet low enough to attract customers is a delicate art. A business in constant loss will eventually lose its investors and possibly risk bankruptcy. 15% of start-up businesses were shut down because the cost of running the company was simply higher than the revenue its products brought in. 

7. Regulatory or legal challenges

Some start-up businesses sound perfectly plausible in theory. However, on implementation, they can encounter various legal complexities that might lead to their eventual closure. Changes in government policies, inability to meet consumer demands, and financial trouble are common factors from which legal challenges might arise.

8. Flawed business model

About 19% of failed start-ups agree that a dynamic business model is required to run a business successfully. Therefore, a single rigid business ideal is not conducive to running a successful business venture. Failing to capitalise on opportunities or coming up with new ways to make money at scale may leave investors hesitant to invest further in your business.

9. Got outcompeted

Sometimes, the market is too saturated with similar products for a new one to succeed, as was the case with 20% of failed start-up ventures. While new and emerging businesses are often advised not to pay attention to competition in the market, ignoring it also spells disaster as others try to capitalise on your opportunities. 

10. Ran out of cash or failed to raise new capital

According to 38% of failed start-up ventures, the most common reason for failure was being unable to raise new capital to support their business. Money and time are two precious resources for a new business, and being unable to secure financing from investors is the end of a business. Thus, it is crucial to have an attractive pitch and solid figures displaying your future success rates. If you cannot convince the investors of your potential, your start-up will sink before it begins. 

Frequently Asked Questions

The post Why Startups Fail: Top Reasons appeared first on PayU Blog.

Tips for Cutting Overhead Expenses and Utilities

Invest in Technology

Investing in technology may seem costly but increase productivity. It saves time by automating some clerical tasks or making some complicated tasks quick and easy.

Recycle

Try to reduce, reuse, and recycle any product. Printer cartridges, cans, bottles, and mobile phones are examples that you may reuse. Reduce the use of electricity, water, etc., or recycle plastic or paper.

Use a Shared Workspace

Coworking space is a trending way of working now. You share your office space with other businesses. This helps your business save money on rent, electricity, maintenance, etc., without hampering your business.

Avoid Credit

Whenever possible, avoid giving credits as it may become an additional cost to you. You borrow money to provide credit to your clients, and you will increase your liability of paying interest.

Tips to Save on Business Equipments and Services

Go Paperless

Most of the business activities have turned digital. Reducing on paper will help you save overhead costs on paper.

Avoid Subscription-Based Services

Avoid auto-renew subscription services. Only subscribe when you need them.

Use Free Softwares

Many software can be expensive to buy. Look for alternative free open source or ones at lower prices. For example, many antivirus software is available for free online.

Conduct Virtual Meetings

It is now possible to have meetings over the phone or laptop. This helps the company save travelling expenses as well as time.

Shop Online

Another best cost-cutting idea for businesses also includes online shopping. Today, you can easily buy products online that offer great discounts and save on time and money for their delivery. Also, online stores have a return policy; thus, if the product is not up to the requirement, you can return it.

Tips to Increase Productivity and Reduce Labour Expenses

Take More Quotations

Cost-cutting business ideas also include contracting or outsourcing your work to a company or freelancers. Approach multiple vendors and compare their quotations. Then go with the one offering the best value for money. This gives quality work delivery and saves on the cost of hiring a full-time employee.

Reduce Fixed Costs

A high fixed cost means the sales required to cover the fixed costs must be higher. This leaves you with little money to cover your variable expenses.

Consider Low-Cost Advertising

Traditional advertising methods can be expensive. Try looking at modern business ideas like social media, a powerful tool today to reach new customers.

Shop the Used Market

Buying used office equipment and furniture is a good option. With a bit of repair, some assets can work as good as new ones.

Practice Inventory Management

Managing your inventory is very crucial to meet customer demands. When you buy in bulk, you get discounts which may save some cost.

Sell Unused Items

Try to sell any items and equipment you have lying around which is not in use. This saves in their maintenance costs and also generates some money.

Set a Budget

Having a budget is essential. It helps reduce business costs and limit expenses within the decided amount.

Commission Based Sales

Try to get your sales team’s remuneration based on commission. It helps reduce costs substantially as salaries will be paid based on sales made.

Other Top Business Cost-Cutting Ideas

Practice Outsourcing 

It is impossible to fulfil each task internally by business. Thus, try to outsource such tasks and look for freelancers who can do short-term projects for you. 

Hire Interns

Hiring interns for cold calling and data tasks is a win-win for both. Interns are temporary and are available at a fraction of the salary of a full-time employee. In turn, they gain experience by working with the business. 

Hire Smart Employees

Hiring intelligent and experienced employees might cost you a higher salary, but you can efficiently deal with them. They avoid mistakes, rework, and sub-standard work, thus improving business productivity and reducing costs of rework. 

Efficient Working Hours

Allow employees to work as per their comfort. This way, their efficiency, and loyalty would rise. In addition, this will reduce the use of office resources such as stationery or electricity and lower hiring and training costs of inexperienced staff. 

Review Financial Statements

Review your financial statements thoroughly and look to find any expenses that you can avoid. Such reviews help in identifying and reducing business costs. 

Create Partnerships

Creating partnerships provides new opportunities for businesses. It helps you identify the best practices of your partner organizations and enables you to grow. 

Loan Restructure

If your business has loans, try to restructure them. At times, you can get the loan transferred to a different bank with lower interest rates, which may help you save a lot of money on interest payments. 

Remote Working

Many tasks don’t require the employee to be present at the office. Working from a remote location helps reduce the required office space and save fixed expenses like rent. 

Rent Out

If you have any space that you are not using, consider renting it out. This will help you generate extra revenue while saving costs. 

80/20 Principle

Use the 80:20 principle. Here you shall figure out activities that don’t generate income and activities that generate revenue. Now curb 80% of those expenses that don’t generate income. 

Split Advertising Cost

Split the cost of advertising and promotion with neighbouring companies. Share mailing lists, distribution channels, and suppliers with companies that sell complementary goods or services to buy storage space or advance your marketing alliance. 

Barter System

Try the old practice of barter. There is nothing wrong if you offer your service in exchange for a service that your client provides. This way you build good relations and may also save on costs. 

Try Reducing Landlines

Landline phones are an age-old service that is no longer a necessity. Mobile phones are way cheaper and offer much flexibility. 

Conclusion

Business ideas are not just about working hard to get sales. It also involves innovative work that generates cost-cutting business ideas and increases revenues. These cost-cutting ideas for businesses are efficient strategies that are useful for all kinds of organizations. If you have more to add to the list, do put them in the comment section below. 

The post 30 Best Cost-Cutting Ideas for Businesses That Work! appeared first on PayU Blog.

Unicorn Meaning

Unicorn means a privately held startup company that has achieved a valuation of $ 1 billion. In Indian currency terms, that’s roughly around Rs. 7500 crores. That’s a huge valuation for any privately held company.

Becoming a unicorn is a dream for all the startups and a great milestone to achieve. InMobi, a mobile advertising startup, became the first unicorn startup in India back in 2011. After 11 years, India gets its 100^th unicorn with the neo banking fintech portal ‘Open’ entering the elite club.

How Are Unicorns Valued?

Now that we have understood the unicorn meaning in entrepreneurship, how is unicorn status achieved? How are such high valuations achieved by unicorns?

The valuation of unicorns is usually determined by the investors and venture capitalists that have participated in the financing rounds of the company. Several factors interplay while determining the valuation of the unicorn. One might wonder how is it possible for even the presently loss-making startups to attain such a high valuation?

The valuation of a unicorn is not solely based on its current performance and profitability.  It involves long-term forecasts and analysis of its financial model. Here are some of the reasons for unicorns achieving such high valuation:

• Fast Growth Strategy: Here, the investors invest a huge chunk of money in a bid to help the unicorn attain faster growth while also allowing investors to capture a higher share in the start-up. This leads to unicorns attaining a high valuation regardless of current performance and profitability. With each round of funding, the valuation of unicorns reaches newer heights.
• Better Innovations: Start-ups with better innovations often attract investments from multiple investors. If your idea has the capability to solve a real problem, then you are most likely to receive funding from multiple investors.
• Strong Network of Users: There are many startups that base their revenues on their network of users. While the services provided to the users are free, this creates an opportunity for brands to gain visibility. For instance, social media are free to use and have some of the most significant user engagement ratios. Therefore, this creates an opportunity for the brands to gain the users’ attention, further increasing their sales. This enables social media to earn through advertisement. Such models have done well in attracting investors.
• Market Competition: If you are new to the industry or have little to no competition, then you are most likely to attract investors. Being an early bird, you can access a vast unexplored market for your new product or offering. This is likely to shoot up your investments. Conversely, if a startup has just created a replica of an existing business or model or is entering a market with huge competition, then it will face a hard time wooing investors, adversely impacting valuations.
• Buyouts: More often than not, big players buy out startups to enter a new segment to diversify their business or own new technologies. This relieves the bigger players from building from scratch and gives them a head start.

Also read: How To Register A Startup Company In India?

Stages of Startup

While the meaning of unicorn in the startup ecosystem is prominent, the unicorn is only one of the many stages that a startup goes through. As the valuation of a startup increases, it climbs the ladder to the top. Here are the stages of a startup in terms of its valuation:

Do you need a payments partner for your startup? Partner with a reliable payments partner that’s powered over 5 lakh businesses so far – PayU

Frequently Asked Questions

The post What Is A Unicorn Startup? – Meaning, Valuation & Stages appeared first on PayU Blog.

What is Startup Funding?

Regardless of the size or nature of work, every business requires funds to convert its vision into reality. Several entrepreneurial ideas do not see the light of the day due to a lack of sufficient funds. The concept of funding aims to tackle this problem by providing both the business owners and angel investors a platform for earnings and growth.

Essentially, startup funding or startup capital means the money required to kick start a business. It can be generated from various sources, such as self-funding, seed capital, venture funding, Initial Public Offering (IPO), crowdfunding, grants, and more.

How Does Startup Funding Work?

Funding can sound like a bit of rigmarole, but it isn’t as complicated as it looks. Typically, funding begins with ideation, followed by the pooling of personal funds and registration of the company. Later, depending on the size and stage of the startup, one can opt for seed funding, venture funding, or series funding. For established businesses looking to gain more traction, Series A, B, C funding and IPO are time-tested and solid methods of raising money.

Types of Startup Funding

While self-funding and seed capital funding are widely adopted in the preliminary stages, they may not suffice later. Once a company’s final products and services penetrate the market, it inevitably needs to go for venture capital funding to reach its projected growth figures. Most businesses opt for this type of funding at some point in their business. Let’s have a detailed look at it.

Series A

After establishing itself considerably, a business may opt for Series A funding. This level of funding only comes into place after a company demonstrates a viable business model with strong growth potential. The money raised in this round is used for expanding operations such as staffing, purchasing inventory, etc. Pertinently, while the seed capital pool is generally small, Series A funding may entail crores in investment. 

After registering the business, the company can reach out to or get approached by a VC or private investors for financing. The funds raised here will mainly be diverted towards the expansion plans of the company. After conducting sufficient due diligence, the Series A investors will decide to invest in the business or otherwise. The financing of this type comes from well-established venture capital firms such as RTP Global, Sequoia Capital India, Nexus Venture Partners, and the likes. 

Series B

Like Series A funding, Series B financing occurs only when a business has certain milestones to its credit and has proven itself in the market. It involves private equity investors and venture capitalists and entails a higher share price of investing than Series A funding. 

Typically, with this type of funding, a business ensures that it markets its products/services and customers receive them well. It now requires more money to improve infrastructure, grow the team, and establish a global or more widespread presence. Angel investors or firms at this stage prefer to receive convertible preferred stock as against common stock to mitigate further dilution risks. 

Series C

This is also known as the Series C round. This funding method is generally the last round of venture capital funding. However, in some instances, companies may opt for further rounds of financing, depending on the case and requirements of the business. Much like the previous rounds of funding, Series C financing raises capital via the sale of preferred shares. The shares, in this case, could be convertible shares, with the angel investors being given an option to exchange them for common stock in the company at a later stage.  

Businesses that make it to Series C funding are already quite successful with an established market presence. Therefore, investors at this stage bid their money with the hope of receiving double their contribution as the company scales newer heights. In addition to VC firms and private investors, hedge funds, investment banks, private equity firms, and more extensive market groups also take part in Series C financing rounds. This type of investment means less risk and better profits. 

IPO

IPO or Initial Public Offering is when a business decides to raise capital from individuals in public by selling its shares for the first time. Growing companies use this method to generate funds. In contrast, established organisations may use it to allow startup owners to exit part or whole of their ownership by selling the shares to the general public. 

An IPO involves additional paperwork for a business and requires it to form an external public offering team, compile its financial results and performance, conduct an audit of its financial statements, file the prospectus, and so on. However, in return, the financing method offers several advantages as well. Being public allows businesses to recruit better talent, establish a more substantial presence, and even utilise their public shares to acquire another startup. 

Benefits Of Startup Funding

Business Growth

As a business owner, it’s undeniable that funding is necessary to turn your ideas into tangible profit. To further develop your products or services and take your existing business to the next level, you’ll need to get more employees, expand your operations, allocate money for research and development, and so on. Having sufficient finances allows you to allocate these funds towards the necessary avenues to further your goals.

Networking

It’s been said that your network is your net worth! Entrepreneurs often seek out investor relations for mentorship and building necessary connections that can help them take their business in the right direction. Getting the right advice, mentorship, and ideal contacts will save you a tremendous amount of time, money, and struggle with expanding your business.

Awareness and Publicity

Businesses that get funded by investors and venture capitalists can help get your startup noticed by your customers on a larger scale, especially since you’ll have more resources to allocate towards marketing. It can assist you in positioning your product/service so your prospective customers can understand what sets you apart from your competitors. Also, companies that have been successful in raising venture capital are more likely to be noticed by other investors who may be interested in participating in your company’s future funding series.

Conclusion

The funding forms an essential part to help a business scale further in size and profits. Depending on the stage and requirements of the company, you can opt for the different types of funding to progress further in its entrepreneurial journey. To know more about startup funding and the multiple sources of funding. 

The entrepreneurial journey is extremely arduous and often, very expensive. If you’ve got your sight set on building a massive empire or a thriving business, at some point in time, you’ll need a cache of financial resources that can fuel your growth in the direction you seek. Getting in touch with angel investors and venture capitalists can help achieve your business goals far easier and quicker than you may imagine. To learn more about the numerous avenues of funding and how it works. 

The post Startup Funding – A Beginner’s Guide appeared first on PayU Blog.

• Network
• Participate
• Access

With better networking with various participants and access to a myriad of knowledge and support resources. It aims to create a supportive ecosystem for the continuous growth and development of these entities.

Steps to Register Your Startup with Startup India

Startup India Registration requires the following steps:

Incorporation and Eligibility Criteria

The first step towards getting the entity registered for the scheme and getting recognition is to incorporate the entity and check for the various eligibility parameters defined within the particulars of the scheme.

Account Creation

Once the entity is incorporated and the eligibility criteria are fulfilled, the next step is to create an account on the GOI start portal (www.startupindia.gov.in). A user can register the entity by browsing the portal and clicking the new user. Registration can be done by filling up the details or using any of the social media accounts. Once the OTP-based validation is done, an account is created for the entity.

DPIIT Recognition

Entities can access higher-level facilities, thanks to the Department for Industry Promotion and Internal Trade recognition. Existing and new users can get the DPIIT recognition through scrolling to get ‘DPIIT Recognition’ and ‘Get Recognition,’ respectively. The benefits of DPIIT recognition are,

• Self-Certification
• Tax Benefits
• Relaxed Public Procurement Norms
• Intellectual Property facilities
• Easy Winding-up
• Access to Funds of Funds

Recognition

A detailed form for entity recognition needs to be filled out. Here, the details for recognition can be accessed.

Document Submission

An entity has to furnish the required documents to complete the entity recognition process.

Self-certification

All the documents to be submitted for recognition have to be self-certified before filling.

Certificate of Recognition

The DPIIT certificate of recognition will be issued once all required documents have been submitted and the application has been reviewed. Once the entities are registered, they are permitted to use the DPIIT G2B portal. The portal provides options to file online applications, queries, pitch something, file an application, and history of filed applications and license obtained previously.

List of Documents required: 

• Proof of registration: Certificate of Incorporation 
• Director details 
• Questionnaire received 
• PAN 
• Entity Pitchbook: A pitchbook for startup registration, indicating how the entity fits the required parameters of the Startup India Initiative. 
• Reference Letter: 
• A letter of funding from the Indian government or a state government as part of a specific scheme to encourage innovation; OR 

• A reference from an Incubator as required by the Department of Industrial Policy and Promotion (DIPP); OR 
• A letter of support from a government-funded incubator mentioning innovation concerning the project; OR 
• A letter of recommendation from an Incubator indicating innovative nature of entity OR 
• A letter of funding and support from any SEBI registered approved entity indicating endorsement of business; OR 
• A patent was filed by the Indian Patent Office and published in the Journal in areas related to the nature of the business being promoted. 

Benefits of Signing up with Startup India

Tax Benefits

For the initial three years, registered Entities will be getting tax exemption so that revenues can be employed for further development. 

Self Certifications

Registered Entities get the ability to self-certify compliance for nine labor and environmental regulations, thus reducing the regulatory pressure. 

Patent

Registered entities will be entitled to fast-track application of patents, additionally will have the eligibility to 80% rebate on the patent fee. 

Going Public

Registered entities will have relaxed norms for going public to raise capital. 

Incubator Module

Registered entities will be enabled to use the knowledge and support of Incubators to have a conducive growth environment. 

Networking

With 49000 users registered on Startup India Portal, registered entities can broaden the range of networking possibilities. Registered entities also get networking opportunities through fest conducted under the scheme. It is done twice a year. 

Government Tenders

Registered entities get equal footing to obtain high-value government tenders with relaxed norms and incentives. 

Boost in Research and Development

Research parks are being set up to promote research and development for budding entrepreneurs and students. Registered entities will be able to exploit these resources to innovate and develop their products/services. 

How Do I Know My Registration is Complete?

Startup gets recognized after filling the application with duly required documentation. Subsequently, you can download a copy of your certificate of recognition from the portal. Certificate of recognition gets available for download in two working days after completion of forms. 

Conclusion: Register Your Entity Today

Startup India Statistics stands at: 

• 15475 recognized entities. 
• 148897 Jobs created. 
• 45% o these entities have women directors 

Examples of Startup India registered Success Stories: 

• 108 COUTURE LLP,  
• 21-century polymers Pvt ltd, 
• 360 DEGREE FOOD AND BEVERAGES PRIVATE LIMITED  

To see the complete list of registered entities, click here. 

There are many other schemes that the Government of India provides for entrepreneurs in India. Each of these schemes provides a unique kind of assistance to the entities. With a supportive environment and assistance from varied resources, the startup initiatives of India are indeed a boon to upcoming entrepreneurs. Here is the list of Government of India Schemes. 

Did you find this blog helpful? Check out more at PayU India Blog. 

The post A Quick Guide to Register Business Under Startup India Scheme appeared first on PayU Blog.

Lenskart is a leading e-commerce portal in India that revolutionized the eyewear industry with its omnichannel approach. Take a look at this blog to find more about the vital metrics in detail.

How Data Can Be a Powerful Tool for a Startup’s Growth Journey?

Leveraging data depends on the stage of the startup. One needs to balance qualitative and quantitative inputs. When a startup begins, quantitative data may not be enough. Thus, relying on qualitative data is helpful.

As startup scales, multiple metrics like new user acquisition, average revenue per user, gross to net, and Net Promoter Score (NPS) come into the picture. It is always possible that an increase in any other metrics can impact the other ones. Hence, defining data metrics beforehand can help startups build the right growth strategy.

Creating monthly and daily dashboards to get a quick view using a plethora of tools and building data democracy also plays an important role.

What are Important Metrics for Scaling Startups Rapidly?

As Ramneek suggests, “Important metric we look at is the net promoter score (NPS)”. A business with very high NPS is a strong indicator that it’ll always grow. Having clarity on the number of consumers and NPS is helpful because it is one metric that needs to be driven. It makes sure that a company grows.

If you can solve the problems of customers who haven’t taken any action, it is 60% possible that they’ll make a purchase. These are the metrics that may not be easily available, but they need to be available to everyone to analyze them.

What is a Good Measure of Customer Conversion?

Customer conversion can be divided into two buckets for startups that are:

• Horizontal in nature
• Vertical in nature

The startups horizontal in nature, have a lower conversion rate of about 1-2%. These are marketplaces where people come to check out new products every now and then.  

The startups vertical in nature tend to have a higher conversion rate of about 5-10% because people come for a specific need. These may include platforms that cater to a specific line of businesses like fashion and many more! 

How Can Payment Solutions Impact a Product?

Payment gateways like PayU, bring in value-added services like Buy Now Pay Later and EMIs that create a direct impact. With the increase in usage of UPI and reduction in payment failures, there’s an uptick in payment solutions like subscriptions. Payment solutions like this increase average ticket size because customers get better payment options.

To find out more about metrics that matter the most in the product journey, check out this video.

To know more details about the upcoming episodes, click here.

The post The Most Vital Metrics in a Product Journey that Make a Significant Difference appeared first on PayU Blog.

Table of contents

What is goods and services tax (GST)?

It is a tax reform that came into existence on 29th March 2017 by an act of parliament and has replaced many indirect taxes such as VAT, excise, service tax, etc.

A comprehensive destination-based tax, GST is levied on the supply of goods and services at every point of sale. For example, you are a wholesale merchant and sell goods to Mr X, a retailer, who further sells it to Mr Y, the consumer. At first, the tax is levied on the purchase made by Mr X from you. Then, the tax is further levied on the purchase made by Mr Y from Mr X.

A unique number called GST registration number is allotted to every business registered under GST.

Types of GST

In India, there is a dual GST system in which the central and state governments levy taxes simultaneously with a common tax slab. However, GST is mainly categorized in three simpler terms:

State Goods and Services Tax (SGST) – taxes levied by the state government or union territory (UT) on goods and services manufactured or sold within state or UT boundaries.

Central Goods and Services Tax (CGST) – taxes levied by the central government on any intra-state transactions for goods or services.

Integrated Goods and Services Tax (IGST) – taxes levied by the central government when a transaction of goods or services takes place within two different states. The state and central government share the tax levied equally.

Advantages of GST registration for startups and small businesses

GST for small business and startup provides these advantages:

• If you file your return under GSTR-1 and GSTR-3B, no late fee will be charged as per the 31^st GST council’s declaration to boost Startups and SMBs.
• Starting a business in India is now a lot easier. SMBs and startups can go ahead with only GST registration. Earlier, the process was a bit complex.
• Simplified indirect tax system to one uniform system. Ever since GST came into existence, a lot of indirect and direct taxes have been subsumed such as excise, VAT, etc. This has made the tedious process of filing and managing taxes much simpler.
• Easy compliance and requirements
• Paperwork efficiency and ease of logistics towards dense locations of client

Exemptions under GST for startups and small businesses

There are no complex criteria for eligibility for GST registration. In fact, businesses with a turnover of under Rs. 40 lakhs per year don’t need to register under GST. As a result of this exemption, many startups and small businesses that fall under the category of Rs. 5 lakh – Rs.40 lakh income can grow without having to worry about filing GST returns.

How to register a startup or small business under GST

Wondering how to register a small business in India? It’s quite simple to register your business under GST online. There are a few GST registration requirements. Just follow the steps given below:

• Go to the GST portal at https://www.gst.gov.in/. Click on ‘Services’ and then select ‘New Registration’ under ‘Registration’.

• Generate a temporary reference number (TRN) by filling in the details given below such as PAN, email ID, and mobile number, and click on Proceed.

• Enter the OTP received on the given mobile number or email ID and validate it. 

• Once you validate your number, a TRN will be allotted. Use it to log in again to complete the GST registration process and requirements. 

• Login to the portal using the TRN, enter the captcha and complete OTP verification. Click on the pencil icon below ‘Action’. 

• Enter all the information about your business such as trade name and composition scheme. Click on ‘Save & Continue’. 

• On the next screen, provide information about all the promoters and directors of your business. Or you may enter the details of the proprietor in case of proprietorship. You can enter the details of up to 10 promoters or partners on the portal. Then, click on ‘Save & Continue’. 

• Enter the details of the authorized signatory nominated by the promoters to file GST returns of the business. 

• Submit the details of the principal place of your business such as an address, official contact details (email, phone no., etc.), nature of possession and others. Upload relevant proofs of the same and click on Save & Continue. 

• Enter additional place of business details. For example, if you have an eCommerce business and use Amazon’s warehouse then the details of the warehouse must be given in this section.  

• Provide the details of the top five goods and services you supply. Fill in the HSN code for goods and SAC code for services. 

• Verify the details submitted. Once it’s completed, select the verification check box and e-verify the name of the authorized signatory. 

• After the signature verification, a success message will appear on the screen, and an Application Reference Number (ARN) will be generated. Use it to track the status of your application. Once the process is complete, you will be informed about the allotment of a GST number. 

Conclusion

GST registration process for startups and small businesses is much simpler now. Just as a startup becomes successful when the idea behind it is properly executed likewise if GST is implemented properly, it helps a lot in achieving the financial goals easily.

The post GST Registration for Startups and Small Businesses in India | A Quick Guide appeared first on PayU Blog.