Research says the bigger the firm the less likely it is to be headed by a woman. The ILO estimates that while 22 per cent of men’s productive potential is underutilized, women’s is as high as 50 per cent. This blog will help you identify the different sectors where women entrepreneurs traditionally have ventured in, also the pain points in running the shebusiness. This blog will talk about Strategies that Women Entrepreneurs should consider following like “Starting from Now”
Categories of Women Entrepreneurs:
- Women in organized & unorganized sector
- Women in traditional & modern industries
- Women in urban & rural areas
- Women in large scale and small scale industries.
- Single women and joint venture.
Many small retailers consisting of the local kirana shops, owner-manned general stores, chemists, footwear shops, apparel shops, paan and beedi (local betel leaf and tobacco) shops, hand-cart hawkers, pavement vendors, etc. which are few examples of unorganized sectors. Unorganized retailers normally do not pay taxes and most of them are not even registered for sales tax, VAT, or income tax. Demonetization was a big blow for people or labours belonging to this sector. Organized sector has become more popular in big cities in India and most of the metropolitan cities and other big cities are flooded by modern organized stores. Many semirural areas have also witnessed entry of such organized retail outlets. It is called organized for the players in this sector have the necessary compliance done. Top 10 strategies to do business in organized sector:
- Business Incorporation: This must be done according to the Companies Act, 1956 and Companies Act, 2013 (collectively the Companies Act) and the regulations laid down by the Securities and Exchanges Board of India (SEBI) for listed companies in India. Entity options: LLP, Pvt Ltd, OPC, Sole proprietorship, Partnership
- Taxation Laws: This compliance will be done based on Income Tax Act, 1961, indirect tax laws including laws relating to value added tax, service tax, customs, excise etc. Also, International Taxes
- Investing in India by non-residents: Requires conformity with India’s foreign exchange regulations, specifically, the regulations governing FDI
- Foreign company to do business in India: You can do business via offices, the options are as follows: Liaison office, Project office, Branch office, Partnership, Trust
- Post Incorporation: The company must apply for its PAN and Tax Deduction Account Number (TAN); Shop and establishment registration; Register with employment law authorities; open bank account; Board meetings; Contracts and Agreements.
- Auditing and Accounting: The first auditor should be appointed by the Board within 30 days from the date of its incorporation. It is a good practice to maintain the books so that financial statements are updated.
- Issuing securities: Indian companies may issue numerous types of securities. However, companies are required to comply with the Companies (Share Capital and Debentures) Rules, 2014. Options that you have: Equity shares, Preference shares, Debentures.
- Fundraising Compliance: Compliance like share transfer and increasing authorized share capital that comes following raising funds.
- Tax Returns Filing: Like VAT refund is an integral component of a modern VAT system.
- Employee Stock Options: Giving employees the right to purchase a certain number of the company’s shares instead of salary.
The 15 Pain points that women entrepreneurs face:
- Differences in endowments, preferences and barriers to entry and exit
- Overrepresentation in traditional sectors that have low start-up costs and limited barriers to entry
- Female entrepreneurs, especially those in unorganized enterprises, operate home-based businesses
- Lack or limited access to technology due to affordability, lack of knowledge, and/or social norms
- Women more likely to start enterprise in sectors with low effective demand leading to lower profits
- Less favourable profile with investors since women own small businesses and do not have adequate collateral
- Financial institutions may require higher collateral from female entrepreneurs. Some banks may also require women to have a male co-signer to open accounts
- Low financial market participation
- Preference for own savings to finance enterprises instead of credit from financial institutions
- Informality and home-based enterprises are mainly the result of a need to combine work and family responsibilities
- Limited vocational and technical skills may be caused by women’s lower educational attainment or social norms that limit their physical mobility
- Limited knowledge of government legislation and less experience on starting a business than men and compliance thus discouraged.
- Denial or limited ability to own assets and inheritance due to laws
- Lack of awareness of different financing programs by government
- Lack of awareness of IP protection
Startup entails complex procedures and many bureaucratic hurdles, entrepreneurs are better off using professional services. Hiring a virtual lawyer and virtual accountant can save time and help ensure that the process goes smoothly. For any Legal and Accounting support, Happy to help you, let us talk.