Are you even ready for an Indian Global IT( Software) start-up yet ?

Indian IT industry is said to be booming by many experts but does anyone ever remember the foundation stones who help setup the Indian IT industry & are sometimes even Martyrs in this Industry set-up process. We have analyzed & seen that 80% of Indian IT startups fail within first 5 years. Here as a business set-up expert we will highlight the Reality Vs Expectations scenario & relate it with results to get to a conclusion.

As a business setup consultant we are here today to analyze who all are really ready for an Indian Global IT( Software) Business ? I would like to start with a software company of around 15 people ( 15 startup employees) & will take the cost to earnings scenario of such a company. Also my initial analysis is from a Tier II Indian city like Noida in Delhi/NCR. Also i will take the minimum possible cost as a benefit of doubt to the Entrepreneurs.

Let's start with the Cost to company :-

1) Rent of the Office : One could start with lesser rent however a Global Software company requires an office of at least a rent( In today's prices) = 25,000 INR per month. Also a security deposit of let's say just 50,000 INR.

2)?Hardware/software fixed cost : Since you are starting a software company and not something which can run with just any hardware or software hence you need to buy the best hardware & software from the Market. Let's see me as the Business set-up consultant and i can arrange a Top notch Hardware & software in just 25000 per PC for each employee( From a Nehru place kind of Vendor) and a secure safe Operations of a software company. Hence cost of all PC's = 2 Lakh 50,000 INR. World class Software costs are very high and hence can be presumably just taken as 30,000 INR per month ( Tel + Skype + Web + Hosting + Servers etc.).

3) Employees: For a software startup of at least 15 employees ( 15?is a Must otherwise the company will not run properly), the below are the type & quality of human resource which is essential for a successful software venture :

Lead generation TL = 40,000 INR per month?Lead generation team = 2* 25,000 = 50,000 Total?= 90,000 INR Per month

Sales/BD Team : Sales Head = 70,000 INR Per month , Sales BDMs = 2*30,000 = 60, 000 per month

?1 Senior web developer = 50,000 INR per month

1 Web developer?= 30,000 INR Per month

1 Senior Android App developer = 50,000 INR Per month

1 Android App developer = 30,000 INR per month

1 Mobile App Designer = 50,000 INR Per month

1 Web App Designer = 50,000 INR per month

1 Senior SEO Manager = 50,000 INR Per month

1 SEO Manager = 30,000 INR Per month

Total cost of Employees =?5 Lakh 60,000 INR Per month

Now let us assume just 6 months of Running the company from the start as a start-up OR Even restarting/ revitalizing the company from scratch again.

So Fixed cost to the company in 6 months =?3 Lakh INR?

Operating cost of the company in 6 months =?35Lakh 10,000 INR Roughly rounding off to the just 35 Lakh INR. Overall Cost(Fixed + operating) = 38 Lakh INR in 6 months

Now let's take the Sales scenario during the Business set-up phase & later & lets take just realistic figures as the Business is in a set-up phase itself.

so 1st six months of Business setup phase sales in $ terms = 0K + 5K + 10 K+ 10 K + 20 K =?45K $?= 45* 65( Taking $ value as just 65 due to international cuts etc.) =?29 Lakh 25000 INR which we would round off to just 29 Lakh INR. These are realistic earnings out of a Global sales scenario in the start-up Business set-up phase as seen by Most Indian software companies. Hence the Revenue earnings are just 29 lakh whereas the Spending is more than 35 Lakh.

BUT Like the other investments too, investment in an IT(Software) company really starts to show real profits only after the first 6 months. Similarly calculating the cost to company in the next 6 months comes out to be > 45 Lakh INR Whereas in the next six months the Sales scenario in the company changes with a consistent efforts by the overall company( Assuming everyone still remains in the company, which is a must as start-up really can't afford to lose important Core members) & after the Business set-up phase, the next six months sales can be like = 20 K +20 K+ 20 K+ 20 K + 30 K =?71 Lakh. If everything goes right as per planning ( Which will mostly not but taken luck & Fortune to be on our side), the Next 6 months spending as just 45 Lakh, we still can still make a profit of?25 Lakh after a 6 months of?a Tussle of Business set-up phase of a Global Indian Software start-up .

Hence my question to every freelancer of today who is ready and says that he has started his own software company is that - Do you really have 35 Lakh to spend on starting a software company in India and then waiting for 6 months to get returns on it of only some lakhs at the next 6 months? It need real money as well a patience and guts' to stand over ! How many entrepreneurs would be ready if This overall calculation is clear to them ?(* These calculations are made with lots of assumptions and on the market scenario of 2016 based at Noida, Delhi/NCR India & may vary for your location & availability of Top quality resources in your town/city/country) But as a business setup expert - I considered it my duty to warn everyone who wants to take this leap into making a Global software company in India a reality.

one scenario is clear to us by experience & doing all these calculations Based on various studies, research & analysis is that " Opening a software company in India"?to be "successful for sure" is not a piece of Cake & it takes more than just skills, will, Maturity, hardwork, smartwork, Entrepreneurship &?more of it - It takes a lot of money to be successful & it is not a short term Game- It is a very long term investment. Contact me for any advice on software Business setup in India/Abroad. I am available mostly during my awake hours. Call at +91-9899783582 for more discussions on the same anytime.