Is starting a business in India risky?
Tell someone you’re starting a business in India and get ready for their overwhelming show of support:
Don’t you know 90% of Indian startups fail within five years of inception in India?
Most businesses are never profitable and fail within 1-2 years in India.
Aren’t you worried about all the time and money you’ll lose if you fail?
Well, these so-called ‘well-known facts” do have some truth in it, but it’sits not the complete truth.
First of all, and bear with me on the pedantry
Since 2015, as many as 1,500+ startups have failed and closed down in India.
The primary reason for the failure of these Indian startups was not the lack of subsequent funding from the investors! They failed because of the replication of Western business models that weren’t suited for our Indian market.
Currently, India ranks 52nd on the Global Innovation Index (GII) 2019 list, which is 38 places behind our neighbor China.
Though India has real potential to become a global driver of innovation, including market potential, due to its talent pool and an underlying culture of frugal innovation,
Our weaknesses lie in the indicators for the business environment, education expenditures, ability to produce creative goods and services.
According to a report by Failory,
The common characteristics of the Startups that failed are:
1. Incompetence
2. Lack of experience in the line of goods
3. Personal problems
4. Little to no business experience
So, it’s fair to say for most of the so-called CEOs and Founders, doesn’t have what it takes to run a successful business.
They treat their “businesses” as side-projects that they might or might not hope will grow into something more.
There’s a possibility that some startup entrepreneurs in India may have ceased operations for a better opportunity as an employee or an entrepreneur.
So, there’s the statistic we haven’t talked about yet. Almost none of us ever talks about it.
But don’t let these above facts discourage you because the other side of the story is even more daunting.
The job market in India
Most people can quickly get a 9 to 5 job after college in India.
But it’s usually not the job they are happy about or want to work.
But you must be thinking, so what?
Who loves their job? No one, but you has to do it.
Plus, starting a business is risky!
How you are going to start a business if you’ve don’t know how to start a business!
What are you going to do if I don’t make any money?
What your family and society will say about me if I fail?
These are the response you get if you suggest someone you should start a business!
If you look at the current state of the job market, salaries, inflation, taxes, and cost of living in a big city, getting a tradition job isn’t that safe either.
I believe getting a traditional job is even riskier than starting a business in India. Why?
Getting hired does not give you job security nowadays
Gone are the days in India when people used to work where they live, and getting a job wasn’t that difficult because there was a high demand for labor in the industrial age, and the supply for educated and skilled individuals was low.
Now, after the introduction of globalization, you are not only competing for a job against locals but also against people from all over the world with outsourcing.
People have started freelancing and providing their services all over the world from their home and that too at a much cheaper cost than a salaried employee.
In the future, not only you are competing against people from all over the world but also the Robots and Automation.
Heck! Even now, you can read about robots that are working as a lawyer, a driver, police, and a cook all over the world.
Here are some High-Income skills in India that can help you make a fortune
Sooner or later automation is going to take over the job industry because if you are paid Rs 10 Lakh a year plus time off plus weekends plus festive holidays to do a job that can be done by machines by spending one time Rs 70-80 Lakh or even 1 Crore Rupees to automate then guess what is going to happen to your job?
You have to realize that big businesses don’t want to pay for your benefits and your pensions.
But if you work on your business, you are in charge. You can also use automation and robots to cut your production costs.
But don’t worry, I’m not suggesting you should quit your job immediately.
You can start a business while you are working on your job and work on your business on weekends and day-offs. When your business start growing, you can quit your job and focus on your business.
Potential for growth in a Job vs. Starting a Business in India
There always a limit on how much money you make when you get a job because there are only limited hours a day that you can exchange for your money.
When you start a business, there is no limit because you are not trading your hours for money.
Let’s say – If you are selling a pen, you are not limited to sell one pen an hour. You can sell 10s, or 100s or even 1000s of pens an hour.
You can also sell your pens even while you are sleeping and convert it into a passive income by building a business system. You can hire a distributor, salespeople, and office staff to work for you.
If you focus all your 24 hours on one job, you’ll get the maximum money you can earn from 1 job, but if you focus your energy on your business now, the growth opportunity is endless.
Financial Freedom
It’s very depressing to think that young Indians, the millennials won’t be able to retire in the future because of the unemployment crisis that is glooming in our economy. Their spending habits and lack of saving also, life will become more expensive in the future.
Have you heard of a word Downsizing?
A few years ago, Downsizing was a word from the west; in India, the demand for quality workers was deficient.
Until 2004, people in India used to believe if we work hard, go to school, and get good grades, go to college, get a degree and get a job for 30-40 years, and after retirement, the company and the government will take care of you.
The Central Government of India has discontinued the existing pension scheme for all employees who are recruited from/after January 1, 2004.
And now in India people are losing their job which they thought they would be doing till they were 60.
According to a report by a committee under RBI–Only 23% of India save for retirement, and most of them depend on their children for support.
Now the real problem will arise in the future when the children of this other 77 % of people in India will be dependent on their parents when they lose their job.
In western culture, they refer these kids to as Boomerang generation–
The term “boomerang generation” implies those kids who came back home from college or job to live with their parents. Because they could not financially support themselves or they are unhappy with their jobs or their life choices.“
We all have limited energy, where you want to put your focus or energy?
Starting a business in India or a job?
Check these 25+ Killer future business ideas for a super successful startup by 2020 in India
Both of them are hard in their way, but both have different potential outcomes.
Starting a business in India not only brings you financial freedom but also the freedom to spend time with your family, travel the world, to do what you love. Your business will continue to pay you because you have created a business system that will work without you.
Cost of getting a job
The average cost of getting a degree from a reputed college in India is between Rs 4-20 lakhs. That covers your tuition, books, food, hostel fee, etc.
The average starting salary for a college graduate in India is between Rs 3-5 lakhs.
The cost of starting a business is now cheaper and easier than ever before.
You can start a business in less than Rs. 1 lakh and can become a multimillion-dollar Valuation Company if you have the right business mindset.
There examples of some companies like DELL, HP, Subway that started with less than $1000, and look where they are today.
So spending Rs 20 lakh rupees for a college degree in which you get no job security, and a cap on how much you can earn and no freedom and spending fraction of that money to start a business where you can live your dream life is a much safer option.
Makes sense to some people, I guess. It is possible if you think a little differently.
The Bottom Line
We live in a county where “career counselors” still advise us on how to “improve” our job search efforts.
And, we feel pressured to validate our degrees, diplomas, and certificates by sending out endless resumes.
How much longer are we going to ignore the fact that globalization, recession, and automation have changed our world?
The world is a totally different place career-wise from 10 to 20 years back.
To survive in this world, we need to play by the new rules, and we need to escape from the orthodox point of view about jobs and businesses.
I want to remind you that having a job is NOT necessarily a less risky route compared to having your own business in India.
If you are looking to start your own business –
Here are the 5 things I want you to do before starting a business in India:
1. Do your research about the business and competition and legal aspects
2. Map your finances.
3. Calculate and understand the risk.
4. Time it right because timing is an important element of building a business.
5. Hire help because starting a business shouldn’t be an independent journey.
Also, check – 15 Best Ways to Make Money Online in India
Now that you have read about my views on jobs and businesses
Comment below what you think!
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