How to start a new business
Starting a new business requires careful planning and a willingness to follow a structured approach from idea to launch. Understanding each stage — from market research to legal registration — can help you avoid costly errors and lay a strong foundation for growth.
10 steps to start your business
- Carry out market research — gain a clear understanding of your customers and competitors.
- Prepare your business plan — develop a roadmap for operations, structure, and growth.
- Arrange funding — identify sources of capital and explore funding options.
- Select your business location — whether physical or online, choose strategically.
- Decide on a business structure — options include sole proprietorship, partnership, LLP, or company.
- Choose a business name — ensure it is unique, memorable, and aligns with your brand.
- Register your business — make it legal and safeguard your brand identity.
- Obtain tax registrations — acquire PAN, GSTIN, and any applicable state tax identifiers.
- Apply for licences and permits — ensure legal compliance from the outset.
- Open a business bank account — keep your finances organised and separate from personal funds
Conduct market research
Market research will tell you if there’s an opportunity to turn your idea into a successful business. It’s a way to gather information about potential customers and businesses already operating in your area. Use that information to find a competitive advantage for your business.
What to include in your market research
- Target audience analysis: identify who your customers are and what they need
- Competitor research: study existing businesses in your space — their strengths, weaknesses, and pricing
- Market size and demand: quantify the opportunity using industry reports and search data
- Trends and forecasts: understand where your industry is headed over the next 3–5 years
- Regulatory environment: identify any licences, permits, or compliance requirements upfront
Determine your business concept
Identifying the right business concept is the cornerstone of a successful venture. Assess your passions, skills, and areas of expertise. Consider what you enjoy doing and where your strengths lie — then evaluate whether the market has genuine demand for that product or service.
How to define your business concept
- Assess your skills and interests: your business is more likely to succeed if it aligns with your expertise
- Identify a market gap: look for unmet needs or underserved segments in your chosen industry
- Validate demand: use keyword research, surveys, and competitor analysis to confirm there is a paying audience
- Define your USP: clarify what makes your product or service better or different from existing alternatives
What kind of business should you start?
Choosing the right type of business is a pivotal decision that impacts your long-term growth, profitability, and personal satisfaction. Consider market demand, competition, your available capital, and your personal strengths when evaluating which business to start. If you’re starting small or testing a new idea, exploring a micro loan can be a smart way to fund initial expenses without overextending your finances.
Business types to consider
| Business type | Suitable for |
| Product-based business | Entrepreneurs with manufacturing, sourcing, or e-commerce capability |
| Service-based business | Professionals with specialist skills — consulting, coaching, IT, marketing |
| Digital/Online business | Low-investment entry point — content, affiliate marketing, SaaS, apps |
| Franchise | Lower risk entry using an established brand and system |
| Home-based business | Low overheads — suitable for solopreneurs and early-stage ventures |
Research your competitors and market
In-depth market research is imperative to understand your competition and target market. Analyse your competitors’ strengths and weaknesses, identifying opportunities to differentiate your business. Study market trends, customer preferences, and industry forecasts to stay ahead of the curve. This research lays the foundation for a robust business strategy.
How to research your competitors
- Identify direct and indirect competitors: list all businesses targeting the same customer segment
- Analyse their strengths and weaknesses: review their products, pricing, customer reviews, and online presence
- Map market gaps: find areas where competitors fall short — these are your opportunities
- Track industry trends: use tools like Google Trends, SEMrush, and industry publications to stay ahead
- Understand customer pain points: read competitor reviews to learn what customers want but are not getting
- Define your competitive advantage: use these insights to shape a differentiated value proposition for your business
Create your business plan
Your business plan is the foundation of your business. It’s a roadmap for how to structure, run, and grow your new business. You’ll use it to convince people that working with you — or investing in your company — is a smart choice.
What to include in your business plan
- Executive summary: a concise overview of your business, goals, and the opportunity you are addressing
- Market analysis: target audience, market size, competitor landscape, and industry trends
- Products or services: what you are selling, your USP, and your pricing model
- Marketing and sales strategy: how you will acquire and retain customers across channels
- Operations plan: team structure, processes, suppliers, technology requirements
- Financial projections: startup costs, monthly expenses, revenue forecast, break-even timeline
Your business plan will help you figure out how much money you’ll need to start your business. If you don’t have that amount on hand, you’ll need to either raise or borrow the capital. Explore a Bajaj Finserv Business Loan or check your pre-approved startup business loan offer to speed up the funding process and reduce the time between planning and execution.
Choose your business structure
The legal structure you choose for your business will impact your registration requirements, how much you pay in taxes, and your personal liability. Choose carefully — changing structure later can be complex and costly.
Common business structures in India
| Structure | Key characteristics |
| Sole Proprietorship | Simplest form — full control, unlimited personal liability, no separate legal identity |
| Partnership Firm | Two or more owners — shared profits and liability, governed by Partnership Act |
| Limited Liability Partnership (LLP) | Partners have limited liability — popular for professional services firms |
| Private Limited Company | Separate legal entity — limited liability, regulated by Companies Act 2013 |
| One Person Company (OPC) | Single director + shareholder — limited liability with sole ownership |
Consult a legal or financial professional before finalising your structure. If you plan to pledge assets for better financing terms, a secured business loan from Bajaj Finserv offers competitive rates — check your business loan eligibility to understand the options available.
Choose your business name
It’s not easy to pick the perfect name. You’ll want one that reflects your brand and captures your spirit. You’ll also want to make sure your business name isn’t already being used by someone else.
Tips for choosing a business name
- Make it memorable: short, distinctive names are easier to recall and recommend
- Reflect your brand: the name should convey your product, values, or target audience
- Check availability: search the MCA portal and trademark database before finalising
- Secure the domain: verify that the matching .com and .in domains are available
- Avoid generic names: descriptive names are harder to trademark and differentiate in search results
Register your business
Once you’ve picked the perfect business name, it’s time to make it legal and protect your brand. If you’re doing business under a name different from your own, you’ll need to register with the relevant government authorities.
Business registration steps in India
- Choose your structure: decide on sole proprietorship, partnership, LLP, or private limited company
- Apply on MCA portal: file incorporation documents through the Ministry of Corporate Affairs (MCA21) portal
- Obtain Certificate of Incorporation: receive your CIN (Corporate Identification Number)
- Apply for PAN and TAN: essential for tax filings and employee TDS deductions
- Register for GST: mandatory if annual turnover exceeds Rs. 20 lakh (or Rs. 10 lakh in special category states)
Get tax registrations
You’ll use your tax identification numbers for important steps to start and grow your business, like opening a bank account, filing returns, and paying taxes. Getting your registrations right from the start prevents penalties and compliance issues later.
- PAN (Permanent Account Number): mandatory for all business entities — apply through NSDL or UTIITSL
- GST registration: required for businesses above the turnover threshold — enables input tax credit
- TAN (Tax Deduction Account Number): needed if you will deduct TDS on employee salaries or contractor payments
- Professional tax registration: required in certain states (e.g., Maharashtra, Karnataka, West Bengal)
- MSME Registration (Udyam): voluntary but provides access to government schemes, subsidies, and priority lending
Apply for licences and permits
Keep your business running smoothly by staying legally compliant. The licences and permits you need will vary by industry, state, location, and business activity. Operating without required licences can result in fines, closure orders, or loss of contracts.
Common licences required in India
- Shop and Establishment Act licence: required for most physical commercial premises — issued by state labour department
- FSSAI licence: mandatory for any business involved in food manufacturing, processing, or retail
- Import Export Code (IEC): required if your business involves cross-border trade
- Drug licence: required for businesses in pharmaceutical retail, distribution, or manufacturing
- Fire NOC: required for commercial premises — issued by the local fire department
Open a business bank account
A business bank account can help you handle legal, tax, and day-to-day financial management. Keeping your business and personal finances separate is not just good practice — it is essential for accurate accounting, tax filing, and professional credibility.
Why a dedicated business account matters
- Clean financial records: separates business income and expenses from personal transactions
- Tax compliance: simplifies GST filing, income tax returns, and audit preparation
- Professional credibility: customers and vendors prefer paying to a business account
- Loan eligibility: a healthy business account statement is required for most business loan applications
- Payment infrastructure: enables POS terminals, payment gateways, and UPI business accounts
Once your account is active, you can also check your business loan eligibility to understand the financing options available — a healthy account statement is one of the key inputs lenders evaluate.
Conclusion
Starting a new business is a significant commitment — but following a clear, structured process dramatically improves your chances of success. From conducting market research and writing your business plan to registering your company and opening a bank account, each step builds the foundation for a sustainable venture.
For entrepreneurs ready to move from planning to action, Bajaj Finserv Business Loans provide fast, flexible financing to cover startup costs, equipment, and working capital. Monitor the business loan interest rate to choose the right time to borrow, and use the business loan EMI calculator to plan your monthly repayments before you apply.
Helpful resources and tips for business loan borrowers
