by New Ventures refer to newly established business enterprises started to introduce new products, services, or innovative ways of doing business. They are usually created by entrepreneurs who identify market opportunities and take risks to convert ideas into reality. New ventures play an important role in economic development by generating employment, encouraging innovation, and increasing competition. In India, new ventures are growing rapidly due to digital technology, startup support schemes, and changing consumer needs. These ventures may be small or large and can operate in manufacturing, services, or technology sectors. New ventures require proper planning, financial resources, and managerial skills. Successful new ventures contribute to economic growth, social development, and entrepreneurial culture in the country.
Types of New Ventures:
1. Manufacturing Ventures
Manufacturing ventures are businesses involved in producing goods by converting raw materials into finished products. These ventures use machines, labor, and technology to manufacture items such as food products, textiles, electronics, furniture, or chemicals. In India, manufacturing ventures are important for employment generation and industrial growth. Small scale and medium scale manufacturing units play a major role in rural and semi urban areas. Manufacturing ventures require high initial investment, proper location, skilled labor, and quality control. Government support through Make in India and MSME schemes encourages such ventures. Successful manufacturing ventures contribute to exports, economic development, and self reliance of the country.
2. Service Ventures
Service ventures provide intangible services instead of physical goods. Examples include education, healthcare, tourism, banking, transport, consultancy, IT services, and hospitality. In India, service ventures are growing rapidly due to urbanization, digitalization, and rising income levels. These ventures focus on customer satisfaction, service quality, and human skills. Service businesses usually require less capital compared to manufacturing ventures but need trained manpower and good management. Service ventures generate large scale employment and contribute significantly to GDP. Growth of online platforms has further expanded service ventures in areas like online education, food delivery, and digital marketing.
3. Trading Ventures
Trading ventures involve buying goods from manufacturers or wholesalers and selling them to retailers or consumers. These ventures do not produce goods but focus on distribution and sales. Examples include retail shops, wholesale businesses, online sellers, and distributors. In India, trading ventures are common due to strong market demand and wide consumer base. They require moderate capital and strong market knowledge. Profit depends on purchase price, selling price, and sales volume. Trading ventures play an important role in connecting producers and consumers. With the growth of e commerce, online trading ventures have become very popular among new entrepreneurs.
4. Technology Based Ventures
Technology based ventures use advanced technology to offer innovative products or services. Examples include software companies, mobile apps, fintech startups, edtech platforms, and artificial intelligence based services. In India, technology ventures are growing due to digital infrastructure, startup ecosystem, and government initiatives like Digital India. These ventures focus on innovation, scalability, and problem solving. They require skilled professionals and continuous technological improvement. Technology based ventures attract investors due to high growth potential. They improve efficiency, convenience, and access to services. Such ventures play a key role in transforming the Indian economy and global competitiveness.
5. Social Ventures
Social ventures are started with the objective of solving social problems while earning sustainable income. These ventures focus on issues like education, healthcare, environment, women empowerment, rural development, and poverty reduction. In India, social ventures are important due to social inequalities and developmental needs. Profit is not the main goal, but financial sustainability is necessary. Social ventures use innovative business models to create social impact. They may receive support from government, NGOs, and impact investors. Social ventures contribute to inclusive growth, community development, and improvement in quality of life of people.
6. Franchise Ventures
Franchise ventures involve using an established brand name and business model of another company. The franchisee operates the business by paying fees or royalty to the franchisor. Examples include food chains, retail stores, and service centers. In India, franchise ventures are popular due to lower risk and brand recognition. Entrepreneurs get training, marketing support, and proven systems. Initial investment may be high, but chances of success are better. Franchise ventures are suitable for first time entrepreneurs. They help in rapid business expansion and employment generation while maintaining quality and consistency.
Tax implications of Various Forms of Ventures:
1. Sole Proprietorship
A sole proprietorship is taxed as an individual under the Income Tax Act, 1961. The business income is treated as the personal income of the owner and taxed according to individual income tax slabs. There is no separate tax for the business. Profits are taxed once, which avoids double taxation. The owner must file an individual income tax return. GST registration is required if turnover crosses the prescribed limit. Compliance is simple, but tax planning options are limited. In India, sole proprietorship is suitable for small businesses due to low tax compliance and easy administration.
2. Partnership Firm
A partnership firm is taxed as a separate entity under Indian income tax law. The firm pays tax at a flat rate as prescribed. Partners are not taxed on their share of profit, as it is exempt in their hands. However, interest on capital and salary paid to partners is taxable for the firm, subject to limits. Partnership firms must file income tax returns. GST applies if turnover crosses the limit. This form allows better tax planning than sole proprietorship. Partnership firms are common among small and medium businesses in India.
3. Limited Liability Partnership (LLP)
An LLP is taxed like a partnership firm under the Income Tax Act. It pays tax at a flat rate on its profits. Partners are not taxed on their share of profit received from the LLP. LLPs are not subject to dividend distribution tax. Compliance is moderate compared to companies. GST registration is required if turnover exceeds the limit. LLPs offer tax efficiency and limited liability. In India, LLPs are preferred by professional and service based ventures due to flexibility and reduced compliance burden.
4. Private Limited Company
A private limited company is taxed as a separate legal entity. It pays corporate tax on its profits as per applicable rates. Dividends paid to shareholders are taxable in their hands. Companies must comply with corporate tax filings, audits, and other legal requirements. GST applies based on turnover. Companies enjoy more tax planning opportunities and deductions. In India, startups may get tax benefits under Startup India schemes. Though compliance cost is high, this form is suitable for large and growth oriented ventures seeking investment.
5. One Person Company (OPC)
An OPC is taxed like a private limited company under corporate tax laws. It pays tax on profits at prescribed rates. The owner is taxed separately on salary or dividends received. OPC must comply with company law and tax filings. GST applies if turnover exceeds the limit. OPC combines benefits of sole ownership and limited liability. In India, OPC is suitable for single entrepreneurs who want a corporate structure. Tax compliance is higher than sole proprietorship but offers better credibility and growth potential.
Different Phases of Funding:
1. Seed Funding
Seed funding is the first stage of funding required to start a business idea. It helps entrepreneurs develop a prototype, conduct market research, and test the feasibility of the idea. In India, seed funding often comes from founders’ savings, family, friends, or angel investors. The risk at this stage is very high, so funding amounts are usually small. Seed funding supports early operations and idea validation. It helps entrepreneurs move from concept to initial product or service. Proper use of seed funds is crucial for attracting further investment in later stages.
2. Startup or Early Stage Funding
Startup funding is required when the business begins operations and enters the market. At this stage, funds are used for product development, hiring staff, marketing, and setting up infrastructure. In India, early stage funding is provided by angel investors, venture capitalists, and startup schemes. Risk is still high, but the business shows growth potential. This phase helps establish market presence and customer base. Early stage funding supports scaling of operations and revenue generation. A strong business model and clear growth plan are essential to secure funding at this stage.
3. Growth or Expansion Funding
Growth funding is needed when the business has achieved market acceptance and wants to expand. Funds are used for increasing production, entering new markets, improving technology, and strengthening marketing efforts. In India, venture capital firms and private equity investors provide growth funding. Risk is lower compared to early stages. Businesses at this stage have stable revenue and customer base. Growth funding helps in scaling operations and increasing market share. This phase is important for building competitive advantage and long term sustainability of the venture.
4. Late Stage Funding
Late stage funding is required when the business is well established and preparing for large scale expansion or public listing. Funds are used for mergers, acquisitions, and strengthening market position. In India, funding comes from private equity firms, banks, and institutional investors. Risk is relatively low, and returns are more predictable. Late stage funding helps improve operational efficiency and brand strength. It supports long term strategic goals and prepares the business for exit options like IPO or acquisition.
5. Bridge or Exit Funding
Bridge funding is short term funding used to meet immediate financial needs before an exit event like IPO or acquisition. It helps maintain cash flow and operations. In India, bridge funding is provided by existing investors or financial institutions. Exit funding refers to returns earned by investors through IPO, merger, or acquisition. This phase marks maturity of the venture. It allows investors to realize profits and entrepreneurs to scale further or start new ventures. Bridge and exit funding complete the funding life cycle of a business.
