[TheDesertRat]

Members,

I and my wife are planning to open up a music academy in the NCR area. Both of us do not have any background of starting/operating a business. Wife has a real passion for singing and has a degree in classical singing. Having searched the dearth of the internet and this forum as well, we could not find relevant answers to our queries. Few questions to start with:

1. Do we need to get the academy registered as a business? It is going to be a fee based program.

2. Do we need to engage/get endorsed by local authorities, i.e., police etc. to make them aware that we are running a business in the premises?

3. Buy versus Lease? What should we do in terms of office space?

4. What are the other formalities/paperwork/processes one needs to follow? Excise? Income Tax?

5. If there are any members in this community, who have started a business from ground-up, can they please give me other relevant pointers on the do's and dont's?

As with everything, Team-BHP is the one place where I begin my analysis from on everything.

Note to Mods: Please delete the thread/post if inappropriate.

Cheers,
Saurabh

[Warwithwheels]

Originally Posted by TheDesertRat

1. Do we need to get the academy registered as a business? It is going to be a fee based program.

The simplest way to kick start your business would be a sole proprietorship based setup. The setup cost is close to zero. All you need is a PAN card and a bank account to start the operations. If you are planning on a brand name, check with the bank for the documentation requirements wrt opening bank account in the brand name.

2. Do we need to engage/get endorsed by local authorities, i.e., police etc. to make them aware that we are running a business in the premises?

If you plan to operate out of your own premises, no permission is required. If you live in a society, you may need to talk to your association.

3. Buy versus Lease? What should we do in terms of office space?

It purely depends on your requirement. From taxation POV, lease rental is tax deductible and it doesn't lock up your capital.

4. What are the other formalities/paperwork/processes one needs to follow? Excise? Income Tax?

All you need is a PAN card for the taxation aspect. If your revenue is likely to exceed INR 1 million, you will need to register for service tax. Excise is only if you are into manufacturing business.

[roy_libran]

Originally Posted by TheDesertRat

Members,

I and my wife are planning to open up a music academy in the NCR area. Both of us do not have any background of starting/operating a business. Wife has a real passion for singing and has a degree in classical singing. Having searched the dearth of the internet and this forum as well, we could not find relevant answers to our queries. Few questions to start with:

1. Do we need to get the academy registered as a business? It is going to be a fee based program.

2. Do we need to engage/get endorsed by local authorities, i.e., police etc. to make them aware that we are running a business in the premises?

3. Buy versus Lease? What should we do in terms of office space?

4. What are the other formalities/paperwork/processes one needs to follow? Excise? Income Tax?

5. If there are any members in this community, who have started a business from ground-up, can they please give me other relevant pointers on the do's and dont's?

As with everything, Team-BHP is the one place where I begin my analysis from on everything.

Note to Mods: Please delete the thread/post if inappropriate.

Cheers,
Saurabh

Where in GZB are you planning to set this up. Saurabh? Point-wise:

1. Sole Proprietorship, as mentioned on previous response.
2. No.
3. Lease.
4. No. Not at this point. Keep detailed records though - it's a good practice.
5. Location matters. Don't neglect the importance of it. Makes all the difference to customer perception and visibility, and eventually success or failure.

All the best.

[TheDesertRat]

Thanks @Warwithwheels and @roy_libran.

This seems pretty straightforward in terms of formalities.

@roy_libran, we haven't finalised the location yet. Could be anywhere from Noida to Indirapuram. We will be targeting areas with a high density of residences and some schools if possible as our target audience would be school children for phase 1 of this project. Suggestions?

What I need to come up with is a formal business model containing staffing plan and other relevant details.

Any suggestions are equally welcome.

Cheers,
Saurabh

[GTO]

DesertRat,

As someone who has built two successful, sustainable organisations that are now over a decade old, I can tell you this:

1. Your wife clearly knows a lot about music, but the two of you know nothing about business. Don't start one right away. First, ask her to work in another music academy for 1 - 4 years, and gain some good experience.

2. Start small, then scale up. Keep the costs low at the start and grow only as you get more customers (size follows customers, don't do it the other way around). Over 90% of new businesses eventually wind up. Reasons are only two = Either they run out of working capital, or the lack of absolute sales.

At this stage, don't waste too much time on drafting detailed business plans, making fancy excel sheets etc. No one knows where their business will be in 2 - 5 years.

[pramodkumar]

Great points by GTO, very true.

You need to register under the shops and establishments act first, here is a link of an article http://smallbusinessindia.intuit.in/...80%93-law-says

There are millions of rules in the Indian system that govern how an establishment should be run, and if every establishment is looked through a microscope will not meet some of these statuary requirements. Its always better to see how a similar establishment runs, this will give you some Do's and Don'ts. When running an establishment, especially in the NCR region you will have to grease a lot of palms regardless to the fact whether you are running it in your house or a place which is leased. Please do proper research, like GTO mentions, most business in India suffers from high infant mortality rate, 90% of all business that start; closes within the first year of operation, 90% out of the remaining 10% close in the first 3 years.

My idea is not to scare you out of it, being a past entrepreneur myself I am just sharing some of my insights.

Pramod

[TheDesertRat]

Thanks @GTO and @pramodlkumar. Very valid points indeed.

@GTO, I was looking forward to your advice as I have read how you successfully started what is now a phenomenal brand in itself. I do understand you have tons of experience with entrepreneurship and we would be looking towards you as an inspiration as well as a guide.

As far as working in a music academy is concerned, we will be looking at these options but I am not too sure if there are any good opportunities out there.

We did discuss and decide that we will start with a smaller footprint and think of expansion only after getting a solid customer base.

Another question popped in my mind while exploring all the possible options.
Is it worth looking at the franchise route?

Cheers,
Saurabh

[zteg]

Originally Posted by TheDesertRat

1. Do we need to get the academy registered as a business? It is going to be a fee based program.

Yes, you need to. Sole proprietorship is the simplest. Get it registered in either yours or your wife's name.

Originally Posted by TheDesertRat

2. Do we need to engage/get endorsed by local authorities, i.e., police etc. to make them aware that we are running a business in the premises?

You need to get a trade license from your corporation. You will need copy of lease agreement, property tax paid receipt, approval from electricity and water board in case you have applied for fresh connections, NOC from 3 neighbors in case the corporation demands. Once you get the trade license, get a current account for your business. You will need 2 rubber stamps too for opening current account.

Originally Posted by TheDesertRat

3. Buy versus Lease? What should we do in terms of office space?

Lease.

Originally Posted by TheDesertRat

4. What are the other formalities/paperwork/processes one needs to follow? Excise? Income Tax?

For sole proprietorship, you just need to pay your taxes. Keep a record of income and expenses. Will come in handy when you file your returns.

Originally Posted by TheDesertRat

5. If there are any members in this community, who have started a business from ground-up, can they please give me other relevant pointers on the do's and dont's?

Have financial backup for atleast 6 months. Marketing is the key. Have a grand opening. One of the easiest way to market your business.

[Rehaan]

I don't have much to add at the moment, but perhaps just some inspiration...

Here's some pics from the True School of Music in Mumbai that opened about a year ago.

I was really impressed with the whole setup. Link

[noopster]

^^That's a HUGE investment by the looks of it, Rehaan. I don't think TheDesertRat is planning something on that scale.

I don't have much to add on the business front since GTO's advice seems spot on to me. However as someone who dabbles in music let me warn you that people in general are extremely wary of paying for musical training. As an example, my society folks approached me to start music classes in the premises. There were a lot of kids and some adults interested in learning how to play the guitar, learn some basics of Western music etc. They asked me for a plan and I created one: modestly (I thought) priced it at 800/- a month and had only 2 reasonable (I thought) conditions: that people pay me a month in advance and that they buy their own musical instrument.

Didn't hear from them at all for quite q while. Then one of the guys called me and suggested that I do it for free "to start with" and then in a gently chiding tone told me that buying a guitar (costs around 3-4K) was too much of an investment for most of the parents and couldn't I use my own guitar to train them please?

Imagine the nerve! This from a bunch of folks who think nothing of splurging thousands on a single night out and whose kids attend schools that charge in the 6 figures a year just for fees. I firmly told him that if they couldn't be bothered to invest that much themselves there was no way I was going to; and that was the end of that.

[NetfreakBombay]

Originally Posted by noopster

people in general are extremely wary of paying for musical training. ......priced it at 800/- a month

This depends on city I guess. In my society (~10 buildings in campus), standard charges for music are 400 per class. Usually one class every week.

On occasions like Ganesh Chaturthi, 8 - 10 kids perform vocals / instruments (mostly keyboards/guitars).

Usually people start with 2k Casio and move on to 24 - 30k Yamaha / Roland (with Indian instruments). Similarly, kids start with normal guitars and then move on to electric guitar + amplifier etc.

Apart from that, there are exams every year that cost 5 - 6k (Trinity UK and such).

This is in Mumbai, western suburb.

So, music school does seem a viable business. But like most businesses, will take lots of elbow grease + initial failures.

[TheDesertRat]

@Rehaan. Thanks for the pictures. It looks a stunning and swanky place indeed. However, this looks like a lot of investment up front.

@Noopster, very well said and good point. People often tend to think of arts as "extra-curricular" hence it is not looked upon with the right attitude. Cricket coaching these days costs more than regular tuitions.

I have thoroughly analysed the area where we plan to start the academy and I could not find a lot of options available. There are tons of schools present around the area which can be a bonus as well.

Cheers,
Saurabh

[i74js]

Originally Posted by Warwithwheels

All you need is a PAN card for the taxation aspect. If your revenue is likely to exceed INR 1 million, you will need to register for service tax. Excise is only if you are into manufacturing business.

Small correction - 1 million per year.

[naveenroy]

Originally Posted by noopster

Imagine the nerve! This from a bunch of folks who think nothing of splurging thousands on a single night out and whose kids attend schools that charge in the 6 figures a year just for fees. I firmly told him that if they couldn't be bothered to invest that much themselves there was no way I was going to; and that was the end of that.

Yes, this is something I cannot understand. I think the helmet analogy is relevant here too. They buy a high priced bike but will not purchase protective gear - let alone a good helmet to go with the ride.

But to provide some thought to the OP's question - think of starting small. Really small. I've burned my fingers at least twice by not starting small. Scale up slowly but surely once you know you are getting the feel of the business and steady clients sign up.

One thing about running a business that I have learnt - you can be mega passionate about something. But making money out of that passion is a whole different ball-game.

Just my two bits.

[NitroSRT]

You should start small with a sole proprietorship and continue the business in this way till it grows big and then you can change it to your needs. One thing you need to know from the beginning is how you're going to scale up the business. From you and your wife running the business to you hiring teachers and what not. Good to have growth strategy known beforehand.

And don't be too much hung up on these buzzwords like "scaling" and "growth strategy" because you don't know what your business will grow to become in upcoming years.