Starting A Business Under 20 Lakhs Investment

Starting A Business Under 20 Lakhs Investment

Starting a business can be a daunting task, especially when you have a limited budget. However, it is not impossible to start a business under 20 lakhs investment. In fact, there are many successful businesses that started with a small investment and grew over time.

When starting a business with a limited budget, it is important to choose a business that has a high potential for growth and profitability. This may involve conducting market research to identify a gap in the market or finding a unique selling proposition that sets your business apart from competitors. Additionally, it is important to keep your costs low and find ways to maximize your resources.

In this article, we will explore various business ideas that can be started with an investment of under 20 lakhs. We will provide tips and strategies for starting and growing your business while keeping your costs low. Whether you are a first-time entrepreneur or looking to expand your existing business, these ideas will help you get started on the path to success.

Understanding Business Investment

A small office with a desk, computer, and paperwork. A sign on the wall reads "Business under 20 lakhs investment."

Starting a business is a significant investment of time, money, and effort. Before investing, it’s crucial to understand the different types of investments, evaluate business opportunities, and assess risks to make informed decisions.

Types of Investments

There are various types of business investments that you can make, depending on your budget and goals. Some of the most common types of investments include:

  • Stocks and Bonds: Investing in stocks and bonds is a popular way to earn returns on your investment. However, it’s essential to research the company and market trends before investing.
  • Real Estate: Investing in real estate can be a profitable venture, but it requires significant capital and knowledge of the market.
  • Franchise: Purchasing a franchise is an excellent option for those who want to start a business with a proven model. However, it can be costly.
  • Small Business: Starting a small business is a low-cost investment option. However, it requires significant time and effort to establish and grow.

Evaluating Business Opportunities

Before investing in a business, it’s essential to evaluate the opportunity to determine its potential for success. Some factors to consider include:

  • Market Demand: Is there a demand for the product or service that the business offers?
  • Competition: Who are the competitors, and how will the business differentiate itself from them?
  • Financial Projections: What are the expected costs and revenue projections for the business?

Risk Assessment

Investing in a business comes with inherent risks. It’s essential to assess the risks associated with the investment to make informed decisions. Some risks to consider include:

  • Market Risk: Changes in the market can affect the business’s success.
  • Financial Risk: The business may not generate enough revenue to cover expenses.
  • Operational Risk: Issues with employees, suppliers, or production can affect the business’s operations.

In conclusion, understanding business investment is crucial to make informed decisions. By evaluating business opportunities and assessing risks, you can choose the right investment type that aligns with your goals and budget.

Also See: How to Sell Ad Space to Local Businesses

Business Ideas Under 20 Lakhs

If you are considering starting a business with a limited budget, there are many options available to you. Here are some business ideas that you can start under 20 lakhs.

Franchise Opportunities

Investing in a franchise can be a great way to start a business with a proven business model. Many franchises require an investment of less than 20 lakhs, making them a great option for those on a limited budget. Some popular franchise opportunities in India include McDonald’s, Subway, and KFC.

E-commerce Ventures

Starting an e-commerce business can be a great way to reach a large customer base without the need for a physical storefront. With the rise of online shopping, there are many opportunities available in this space. You can start an e-commerce venture selling products or services that you are passionate about. Some popular e-commerce platforms in India include Amazon, Flipkart, and Snapdeal.

Food and Beverage Industry

The food and beverage industry is a popular choice for entrepreneurs looking to start a business. There are many opportunities available in this space, from opening a small restaurant to starting a food truck. You can also consider starting a catering business or selling packaged food products. The key to success in this industry is to offer high-quality products and excellent customer service.

Educational Services

Starting an educational services business can be a great way to make a difference in the lives of others while also earning a profit. You can start a coaching center, tutoring service, or online learning platform. There is a high demand for educational services in India, making this a lucrative business opportunity.

Technology Startups

Technology startups are a great option for entrepreneurs with a passion for innovation. You can start a software development company, a mobile app development company, or a website design and development company. The key to success in this industry is to stay up-to-date with the latest trends and technologies and to offer high-quality services to your clients.

No matter what type of business you choose to start, it’s important to do your research and create a solid business plan. With hard work and dedication, you can turn your business idea into a successful venture.

Market Analysis

Competitor Research

When starting a business under 20 lakhs investment, it’s essential to research your competitors. Identify who they are, what they offer, and how they market their products or services. This information will help you understand how to differentiate your business and create a unique selling proposition.

Make a list of your top competitors and study their websites, social media accounts, and customer reviews. Analyze their pricing, product features, and customer service. This research will help you determine what you can offer that they don’t and how you can improve on what they do offer.

Target Audience Identification

Knowing your target audience is crucial to the success of your business. Identify who your ideal customer is, what their needs and wants are, and how your product or service can fulfill those needs and wants.

Create a customer profile that includes demographics such as age, gender, income, and location. Determine their pain points and how your business can solve them. This information will help you create a marketing strategy that speaks directly to your target audience.

Trends and Forecasting

Staying up-to-date on industry trends and forecasting future demand is vital to the success of your business. Research industry reports, attend trade shows and conferences, and follow industry influencers to stay informed.

Analyze market trends and forecast future demand for your product or service. This information will help you make informed decisions about pricing, inventory, and marketing.

Remember, conducting thorough market research is essential to starting a successful business under 20 lakhs investment. Use the information you gather to create a unique selling proposition and marketing strategy that speaks directly to your target audience.

Also See: Small Business Employee Benefits

Business Planning

When starting a business under 20 lakhs investment, it is crucial to have a solid business plan in place. A business plan will help you define your business goals, target market, financial projections, and operational strategy. Here are three key components to consider when developing your business plan:

Business Model Development

Your business model is the foundation of your business. It outlines how your company will generate revenue and how you will deliver value to your customers. When developing your business model, consider the following questions:

  • What problem are you solving for your customers?
  • Who is your target market?
  • How will you reach your target market?
  • What is your pricing strategy?
  • What are your revenue streams?

Answering these questions will help you create a clear and concise business model that will guide your decision-making.

Financial Planning

Financial planning is essential for any business, but it is especially critical for businesses with limited investment. You need to understand your financial position and projections to make informed decisions about your business. When developing your financial plan, consider the following:

  • What are your startup costs?
  • What are your ongoing expenses?
  • What are your revenue projections?
  • What is your break-even point?
  • How will you finance your business?

Creating a detailed financial plan will help you understand your cash flow and make informed decisions about your business.

Operational Strategy

Your operational strategy outlines how you will run your business on a day-to-day basis. It includes everything from your staffing plan to your marketing strategy. When developing your operational strategy, consider the following:

  • What is your staffing plan?
  • What is your marketing strategy?
  • What is your sales strategy?
  • What is your customer service plan?
  • What is your production plan?

Creating a solid operational strategy will help you stay organized and efficient as you grow your business. Overall, developing a business plan is an essential step when starting a business under 20 lakhs investment. It will help you define your goals, understand your finances, and create a roadmap for success. 

By considering these key components, you can develop a solid business plan that will guide your decision-making and help you achieve your business goals.

Legal and Regulatory Compliance

Starting a business under 20 lakhs investment requires you to comply with various legal and regulatory requirements. Here are some of the essential compliance areas you need to consider.

Business Registration

Registering your business is the first step towards legal compliance. You can register your business as a sole proprietorship, partnership, or a private limited company, depending on your business structure. Each type of business registration has its own advantages and disadvantages, and you should choose the one that suits your business needs best.


Paying taxes is an essential part of running a business. You need to obtain a Permanent Account Number (PAN) and a Tax Deduction and Collection Account Number (TAN) to pay taxes. You also need to file regular tax returns, including income tax, GST, and other applicable taxes based on your business activities.

Licenses and Permits

Depending on the nature of your business, you may need to obtain various licenses and permits from the government and regulatory authorities. For example, if you are starting a food business, you need to obtain a food license from the Food Safety and Standards Authority of India (FSSAI). Similarly, if you are starting a manufacturing unit, you need to obtain various licenses and permits from the state pollution control board, fire department, and other regulatory bodies.

Ensuring compliance with these legal and regulatory requirements is crucial to the success of your business. Non-compliance can result in penalties, fines, and even legal action. Therefore, it is essential to stay informed about the latest regulations and comply with them to avoid any legal issues.

Also See: How To Start A Business From Home

Funding and Financial Management

Starting a business with under 20 lakhs investment requires careful financial planning and management. Here are some options for funding and financial management that you can consider:


Bootstrapping is a way of starting a business with little or no external funding. This means that you rely on your own resources to get your business off the ground. This can include using personal savings, credit cards, or even borrowing from family and friends.

While bootstrapping can be a good option if you have limited resources, it can also be risky. You need to be prepared to invest your own time and money into your business, and you need to be willing to take on a lot of responsibility.

Angel Investors and Venture Capital

Angel investors and venture capitalists are individuals or companies that invest in early-stage businesses. They typically provide funding in exchange for a share of ownership in the business.

Angel investors and venture capitalists can be a good option if you have a high-growth business idea that requires a lot of upfront investment. However, they can also be difficult to find, and they may require a significant amount of equity in your business.

Loans and Credit Options

There are a variety of loans and credit options available for small businesses. These include traditional bank loans, SBA loans, and lines of credit.

When considering a loan, it’s important to carefully consider the terms and interest rates. You should also be prepared to provide collateral or a personal guarantee.

Overall, there are a variety of options available for funding and financial management when starting a business with under 20 lakhs investment. By carefully considering your options and creating a solid financial plan, you can set your business up for success.

Marketing and Sales Strategies

Branding and Positioning

As a business owner with under 20 lakhs investment, it is crucial to focus on branding and positioning your company in the market. This involves creating a unique brand identity that sets you apart from competitors and appeals to your target audience. Start by defining your brand’s values, mission, and vision. Use this information to create a brand identity that reflects your company’s personality and resonates with your customers.

Your brand positioning should also be considered. Determine what makes your product or service unique and focus on communicating this to your audience. This will help you stand out in a crowded market and attract customers who align with your brand’s values.

Digital Marketing

In today’s digital age, it is essential to have a strong online presence. This includes creating a website and social media profiles that showcase your brand and products/services. Use search engine optimization (SEO) techniques to ensure your website appears at the top of search engine results pages (SERPs) when potential customers search for related keywords.

Social media marketing is also an effective way to reach your target audience. Identify which platforms your audience is most active on and create engaging content that encourages them to follow your brand. Utilize paid advertising options on social media platforms to increase visibility and reach.

Sales Channels

Identifying and utilizing the right sales channels can make all the difference in your business’s success. Determine which channels your target audience is most likely to use and focus your sales efforts on those channels. This may include online marketplaces, e-commerce platforms, or physical retail locations.

Consider partnering with other businesses or influencers to promote your products/services. This can help increase brand awareness and drive sales.

In conclusion, focusing on branding and positioning, digital marketing, and sales channels can help your business thrive with under 20 lakhs investment. By creating a strong brand identity, reaching your target audience through digital marketing, and utilizing effective sales channels, you can attract and retain customers and grow your business.

Also See: How To Create An Advertising Plan

Human Resources

Hiring Employees

When starting a business under 20 lakhs investment, it is crucial to hire the right employees. You need to identify the skills and experience required for the job and create a job description accordingly. You can post job openings on various job portals, social media platforms, and your website to attract potential candidates.

Once you receive applications, you should conduct interviews to assess the candidates’ suitability for the job. You can also ask for references and conduct background checks to ensure that you hire trustworthy employees.

Training and Development

Training and development are essential for the growth of your business and the professional development of your employees. You can conduct regular training sessions to enhance your employees’ skills and knowledge. This will not only improve their productivity but also help them feel valued and motivated.

You can also encourage your employees to attend workshops, seminars, and conferences related to their field of work. This will help them stay updated with the latest trends and technologies in their industry.

Employee Retention

Employee retention is crucial for the success of your business. High employee turnover can be costly and affect the morale of the remaining employees. You can retain your employees by providing them with a positive work environment, fair compensation, and opportunities for growth and development.

You can also conduct employee satisfaction surveys to identify areas of improvement and address their concerns. This will help you create a culture of trust and transparency, which will ultimately lead to a loyal and dedicated workforce.

In summary, hiring the right employees, providing training and development opportunities, and retaining your employees are essential for the success of your business. By investing in your human resources, you can create a productive and motivated workforce that will help your business grow and succeed.

Technology and Infrastructure

Starting a business under 20 lakhs investment requires careful consideration of technology and infrastructure. These are essential components that can help you streamline operations, improve efficiency, and reduce costs. Here are some key aspects to consider:

Essential Equipment

Investing in essential equipment is crucial for any business. Depending on your industry, you may need to purchase machinery, tools, or other equipment to produce your products or services. Make sure to research the market and find high-quality equipment that fits your budget. Consider leasing or renting equipment if purchasing outright is not feasible.

Software Solutions

Software solutions can help you manage various aspects of your business, such as accounting, inventory, and customer relations. There are many software options available, so research and choose the ones that best fit your needs and budget. Cloud-based solutions are becoming increasingly popular due to their flexibility and affordability.

Supply Chain Management

Managing your supply chain is critical to ensure timely and cost-effective delivery of goods and services. Consider using software solutions to track inventory levels, monitor supplier performance, and optimize shipping routes. You may also want to establish relationships with local suppliers to reduce transportation costs and improve delivery times.

In summary, technology and infrastructure are important components of any business under 20 lakhs investment. By investing in essential equipment, software solutions, and supply chain management, you can improve efficiency and reduce costs, ultimately leading to a more successful business.

Also See: Small Business Marketing Strategy

Customer Service and Retention

Providing excellent customer service is crucial for any business, especially for those with a low investment. It is essential to retain your existing customers as they can help you generate new leads through word-of-mouth marketing. Here are some ways to improve your customer service and retention:

Customer Support Systems

Having a reliable customer support system is necessary to address your customers’ problems and concerns promptly. You can provide support through various channels, such as email, phone, or live chat. Ensure that your support team is well-trained and equipped to handle customer queries efficiently.

Feedback and Improvement

Feedback from your customers is essential to improve your products or services. You can collect feedback through surveys, social media, or customer support interactions. Analyze the feedback and make necessary changes to improve your offerings. This will show your customers that you value their opinions and are committed to providing them with the best possible experience.

Loyalty Programs

Loyalty programs can help you retain your existing customers and attract new ones. Offering discounts, rewards, or exclusive access to new products can incentivize your customers to stay loyal to your business. It is essential to make the loyalty program easy to understand and use.

In conclusion, providing excellent customer service and retention strategies can help you build a loyal customer base and generate new leads. It is essential to listen to your customers’ feedback and make necessary improvements to keep them satisfied.

Growth and Expansion

Expanding a business under 20 lakhs investment can be challenging, but it is possible with the right strategies. Here are three key areas to focus on for growth and expansion:

Scaling the Business

Scaling your business involves increasing revenue while keeping costs low. One way to achieve this is by optimizing your operations and processes. This could include automating tasks, outsourcing non-core functions, or renegotiating contracts with suppliers. It’s also important to continually evaluate your pricing strategy to make sure you’re charging enough to cover costs and generate profit.

Another way to scale your business is by expanding your customer base. This could involve launching targeted marketing campaigns, leveraging social media, or partnering with complementary businesses to reach new audiences.


Diversifying your product or service offerings can help you tap into new markets and revenue streams. This could involve developing new products or services that complement your existing offerings, or expanding into new geographic regions. It’s important to conduct market research and analyze customer demand to ensure that any new offerings align with your business goals and values.

International Markets

Expanding into international markets can be a lucrative opportunity for businesses under 20 lakhs investment. However, it’s important to carefully evaluate the risks and challenges associated with international expansion, such as cultural differences, regulatory requirements, and logistics. Conducting thorough market research and developing a solid business plan can help mitigate these risks and increase your chances of success.

By focusing on these key areas, you can position your business for growth and expansion, even with a limited investment budget.

Also See: Small Business Essentials

Exit Strategies

When starting a business, it’s important to plan for the future and consider how you will exit the business. Here are some common exit strategies to consider:

Selling the Business

One way to exit your business is to sell it to someone else. This can be a great option if you have built a successful business that has value to someone else. To prepare for a sale, you should ensure that your financial records are in order and that you have a clear understanding of your business’s value. You may also want to consider hiring a broker to help you find potential buyers and negotiate a sale.

Succession Planning

If you plan to keep your business in the family, you should consider succession planning. This involves identifying someone to take over the business when you retire or pass away. You should work with an attorney to create a succession plan that outlines how the business will be transferred to your successor and how it will be managed in the future.


If you are unable to sell your business or find a successor, you may need to liquidate your assets and close the business. This involves selling off your inventory, equipment, and other assets to pay off any outstanding debts. It’s important to work with an attorney and accountant to ensure that you follow all legal and tax requirements when liquidating your business.

No matter which exit strategy you choose, it’s important to plan ahead and prepare for the future. By doing so, you can ensure that you leave your business on your own terms and with a clear plan for what comes next. avatar

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Liyana Parker

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