How to start a business from scratch in Russia: registration procedure, what to consider

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Russia is a country with great opportunities for entrepreneurs, and in order to successfully start your way in the business world, it is important to know the key steps and implementation requirements. In this article we will look at what it takes to open a business in Russia.

Choosing the field of activity and business ideas

The first initial step on the way to starting a business is to choose a field of activity and develop a specific business idea. It is important to analyze the market, investigate demand, competitors and potential customers. The range of fields of activity is very diverse – from retail to technology startups.

Choosing a niche is an important process. It is she who determines the further direction in the work. In fact, a niche can be called a narrowly limited field of activity, which focuses on the target audience, and also helps the entrepreneur to highlight competitive advantages and perform the work efficiently. For example, an experienced lawyer can open his own consulting office, and a washing machine repairman can open a service center. It is important to distinguish your niche from a million of the same companies, for example, to provide consulting services in the framework of arbitration.

The chosen niche allows the entrepreneur to clearly position himself in the market and choose paying customers. The second will help to set a high price to maximize profits.

What should be taken into account when choosing a niche?

• Targeting individuals or legal entities.
• Gender separation of clients (for some niches).
• Age ranking.
• Price division (budget class or premium segment).

Preparation of a business plan

A business plan is the basis for a successful start and attracting investors, if necessary. It should describe the goals and objectives of the business, the promotion strategy, the expected profit, as well as financial indicators. In addition, the business plan helps you to clearly structure your ideas and understand what resources and investments will be required.

How to make the right business plan to take into account all the nuances of the market?

• Pre-analyze the market and competitors. Starting without detailed analytics is the way to a bad outcome. It is important to invest in an interesting product in order to sell it profitably.
• Collect information. This applies to data on the taxation system, credit rates, investment expenses, sources of financing and expenses, the number of staff, salary level and others. This is not a complete list. The final list is determined within each niche separately.
• Create a financial model of the project. At this stage, it is important to take into account financial investments in enterprises, and at the exit to calculate profits and losses after the first cycle of work.
• Direct writing of a business plan. The document is drawn up according to the standards. Each section of the plan is signed in turn. Data from the financial model is transferred to the sections. The document should include a description of the idea, as well as marketing, organizational and financial sections. It is desirable to have graphs and diagrams.

Choosing the organizational and legal form of the company

In Russia, entrepreneurs can choose from various legal forms of enterprises, such as individual entrepreneurship, limited liability company (LLC), joint stock company (JSC) and others. Each form has its own characteristics and requirements that should be taken into account when choosing. Let’s look at them in more detail:

• A limited liability company (LLC) is a business company established by one or more companies or people, whose authorized capital is divided into shares. It is important to know that the founders are not responsible for their property for its obligations and bear the risk of losses.
• A joint–stock company (JSC) is a company whose authorized capital is divided into shares. JSC is responsible for all its obligations. At the same time, the shareholders are not liable for the company’s obligations. They may incur losses from a decline in the stock price.

How to register a company?

To register a company, it is necessary to prepare constituent documents, choose a legal address and register the company with the tax service. Having received the OGRN and INN, you will be officially registered as an entrepreneur.

Many aspiring entrepreneurs choose LLC. The choice is related to the minimum authorized capital (10,000 rubles) and the simplicity of the registration procedure. What should be done as part of the registration procedure?

• Come up with a company name. The name will be reflected in all the documents of the company, so its choice should be treated responsibly. If the name does not meet the requirements, registration will be refused. Russian Russian should be the name, but foreign-language borrowings in Russian transcription are acceptable. The terms and abbreviations reflecting the organizational and legal form of a legal entity fall under the exception.
• Choose a legal address. This is the place of registration of the LLC, where letters from the tax service and official documents will be sent. It is important that you can contact the company at this address. To register at the office, you need a letter of guarantee to the address from the owner, a copy of the certificate of ownership or an extract from the EGRN.
• Choose the type of activity. To do this, you need to take into account the OKVED reference book. The chosen activity is associated with obtaining the main income. You can also specify additional codes – the directions in which the business will develop.
• Determine the size of the authorized capital. The minimum value is 10,000 rubles for LLC. However, companies that plan to engage in insurance, lending, and alcohol trading, the amount will be much higher. You can pay for the share with money or property.
• Choose a tax system. As a rule, this is clear by the time of registration. If the company fits into the requirements, then the USN is usually chosen. According to the simplified tax system, the tax burden is much lower. It is better to prepare a notification of the transition in advance and submit it to the tax service immediately with all the documents. Otherwise, the businessman will have only 30 days after registration to switch to the mode.

It is also necessary to prepare a package of documents that includes:

• Charter of LLC.
• The decision to create an LLC or the minutes of the general meeting of the founders.
• Application form P11001.
• Document on payment of state duty. Its size is 4000 rubles
• Documents confirming the legal address
• Notification of the transition to a special tax regime
• Identity documents of the applicants

Authorized capital and financial support

Depending on the chosen organizational and legal form, the authorized capital may be required. For example, for an LLC, it may be a certain amount of money that the founders contribute to the company. It is also important to provide financial coverage for the start of operations and the initial stage of development. This may be obtaining a loan or investment. For the first and second cases, a businessman will need a business plan.

Obtaining licenses and permits

In some areas of activity, obtaining licenses, permits or certificates is required. This may include medical, financial, construction and other licenses depending on the type of business. The procedure for obtaining a permit to conduct business has its own procedure.

First you need to understand which of the licensing authorities you should contact. Next, a package of documents is collected, which is sent to the authority personally or electronically. In the second case, it is mandatory to have an EDS – an electronic digital signature.

After submitting the documents, you must provide a copy of the inventory with the date of admission. If there is no copy in the previously sent package of documents or it is a question of non-compliance with the approved requirements, then within 30 days you need to correct the errors.

After 5 working days, the applicant will be sent a document stating the decision to grant a license, which has a standard form. The license does not have any boundaries regarding the territory of its validity.

Personnel training and organization of activities

For a successful business, it is important to properly train staff and organize business processes. Select a team of specialists, develop a marketing and sales strategy, determine pricing policy, and so on.

It is important to know here that for the Federal Tax Service and the SFR, any company is recognized as an employer. An LLC can be without employees if it is managed by a single founder. In this case, no employment contract will be concluded. Usually this is not enough and employees are hired.

There are two options for registration of personnel – according to an employment and civil contract. The first option better protects the rights of the employee. According to the GPH, a person is registered to perform a certain amount of work or services. He does not obey the internal regulations of the organization and is not under the control of the employer.

After completing all the formalities, including registration, obtaining licenses and organizing activities, you can start starting a business. Develop a promotion plan, create an online presence, use social networks and other channels to attract customers.

Today there are several effective and proven methods of brand promotion, among which one can distinguish:

• Publications in the media and various publications.
• Advertising on the Internet and print media.
• SEO optimization.

Results

Starting a business from scratch in Russia is a complex, but quite feasible process. It is important to carefully study all the requirements, go through all the stages of preparation and registration, and also have a clear plan of action at the start and in the long term. Feel free to put your ideas into practice, and a successful business will not keep you waiting.

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