How to Start a Software Company in India | A Start-to-Finish Guide

 

India's software industry is rapidly expanding. India has the world's third-largest startup ecosystem. So, let us discuss how to start a software company in India. 

Before starting a software company, it's important to understand the IT or software industry's growth in India. 

In constant currency terms, the Indian IT sector is expected to grow at a rate of 12-14 per cent in FY2016. 

According to the National Association Of Software And Services Companies, the sector is expected to triple its current annual revenue to the US $350 billion by FY 2025.

 

5 Steps for Starting a Software Company in India

Before establishing a software firm in India, we need to decide if we want to work for a service or a product-based organisation. 

So, let's look at the many types of software companies in India.

Types of software companies:-

• Product Or Development Based Software Company 
• Service Or Consulting Based Software Company

 

Step 1 - Determine the Issue

Every business is created to solve a certain need. Consider how Steve Jobs came up with the concept of a personal computer for the average person.

They ushered in a new era of technology by vying with other tech titans like Microsoft to develop a home-friendly device. Apple has a role in the tech industry as a pioneer of the PC Revolution.

It does not imply that you must invent completely new technologies (although that would be great). Existing technology can be improved and applied to industries that have yet to benefit from them.

Consider the idea of e-commerce employing Artificial Intelligence (AI). Although artificial intelligence is not new, incorporating it into commercial operations is.

 

Step 2 - Register your Software Company

To legally start a business in India, you must create a legal entity and register a software company. There are three popular legal entities in India that allow you to perform business.

• As a software company, a sole proprietorship is the finest legal entity to test your ideas at a low cost on the smallest scale. It is not a corporation, but it is a simple firm or a sole proprietorship corporation that can assist you in starting your business.

• A partnership firm is useful when you have co-founders and want to test a concept with the least amount of legal expense.

• Private Limited Company - This is a legitimate company or corporation in India. In India, private limited company registration online accounts for more than 90% of all enterprises and businesses.

 

Some crucial documents necessary to register a software company:

• Copy of the owner's and partners' pan cards
• The owner or partners must provide an Aadhar card, voter id, or a driving licence as evidence of address.
• You can register your home address as a business address by providing proof such as utility bill copies and rent agreement copies.

 

Other public licences and legal registration requirements for starting a software company in India include:

• Business's service tax registration 
• GST registration is mandatory when delivering software on CDs or any other medium.
• STPI licence is advantageous for new software enterprises because it provides zero taxes and no export duties on hardware and software.
• Register your trademark to safeguard your brand identity.
• Register your source codes for copyright.
• Technology patent registration
• Software licencing contracts

 

Step 3 - Make a Business Strategy

It's time to structure your service when you've decided what kind of service you want to provide.

A business strategy increases your chances of achieving your objectives twofold. 

It provides a roadmap for founding and maintaining your business. In fact, it will be your answer to how to start a software company in India.

It covers everything from obtaining a loan to securing investment funds, making large purchases, recruiting team members, and strategizing the company's expansion. 

The following are elements of a business plan:

• Summary - The section that summarises the company's mission statement as well as information about its leadership, staff, and operations.
• Product/Service Description - This section offers information about the products and services that are being supplied. Pricing, product functioning, and consumer benefits are all outlined. It could also include information about the production and manufacturing process.
• Target Market - The target market is defined as a group of people. It includes industry trends and competitive information.
• Marketing Plan - This section covers the company's marketing approach for attracting its target audiences. It will include a list of distribution channels that will help as well as strategies for future marketing campaigns.
• Budget - A list of the projected costs associated with the company's operations. Including staffing, development, production, marketing, and other operational costs.

 

Step 4 - Invest in your Solution

It's time to put your strategy into action once you've figured out the problem and the solution. 

What use is a company plan if it can't be implemented? 

Raising money for a software company is extremely challenging.

This is especially true if the amount you're raising exceeds your bank credit limit. You'll have to look for other ways to get money. Fortunately, finding investors for your firm has never been easier.

Also, you can gain more financing by joining accelerator programmes or approaching angel investors. 

The benefit of enlisting the help of other investors is that you will receive assistance in developing your company.

 

Step 5 - Hiring!

The people you hire have a big impact on the success of your company. 

They establish the structure and dynamics of how your firm will run as founding members. 

As a result, you must involve in the hiring process, from the recruiters to the software engineers.

You must also think about how you will hire your crew. 

Options like outsourcing and freelancing might help you tap into a larger talent pool.

 

Conclusion

There are numerous laws and procedures to follow while forming a software company. 

The constitution and other corporation laws that govern India today are based on British-era legislation. The 'New Companies Act 2013' mandates that all enterprises in our country obtain a licence. 

To establish a firm, the business service provider provides the finest of its services. A software firm can readily register. 

In addition, a skilled team will assist you with every aspect of how to Start a Software Company in India like company registration online, GST registration, trademark registration, and other relevant services.