How to Start a Business in Bangladesh?

In the last few years, Bangladesh has become an attractive hub of business in Southeast Asia for its macroeconomic changes. Are you someone who wants to tap into the opportunities of this country and start your venture? Do you face difficulties whenever you think of starting your own business? No worries! In this article, we will dive into the step-by-step process sequentially of how you can start your venture in Bangladesh successfully. From ideation to long-term strategic planning, we’ll discuss each step that will help you understand the landscape better and grow also.

Process of How You Can Start A Business in Bangladesh

Without wasting your valuable time, I want us to get into business directly. There are 4 major steps I will discuss that you need to know and follow throughout the journey. Please note that this article only covers the initiation of a business.

Step 1:Ideation of a Feasible Business

It all starts with an innovative idea for starting a business. While coming up with your crazy ideas, always remember that it must solve a pain point for the customers. An innovative idea either brings a new solution to solve a problem or improves the existing practices to make them more efficient or better. Some people do the mistake of lingering on their own beliefs. But what you should do is think from the customers’ perspectives. Here is a process introduced by Harvard Business School that you can follow:

Start with Brainstorming

• Ask yourself, “What task can I make easier?”
• Consider the needs and problems people face in their daily lives.
• Explore different angles and perspectives to generate ideas.

Focus on Fulfilling Needs

• Identify specific needs or problems that can be addressed
• think about ways to create products or services that make people’s lives more convenient or efficient.

Apply the Jobs to be Done Theory

• Analyze the problems or opportunities people are trying to solve.
• Consider how you can create a solution that fulfills those jobs.

Make Offerings More Accessible

• Look for industries or companies with limited accessibility.
• Find ways to provide similar products or services in a more accessible manner.

Improve Existing Products or Services

• Evaluate areas for enhancement, such as the delivery process, location, cost, or customer experience.
• Consider how you can make improvements to meet customer needs more effectively.

Be Open to Pivoting

• Stay adaptable and be willing to adjust your original idea based on market needs or technological advancements.
• Assess if there are opportunities to pivot or modify your business model to align with new demands.

Capture all Ideas

• Write down every idea that comes to mind during the ideation process.
• Avoid judgment and embrace the concept that there are no bad ideas at this stage.

Refine and Prioritize

• Review your list of ideas and evaluate their feasibility and potential.
• Identify the strongest concepts that align with your goals and have market potential.

By following these step-by-step points, you can effectively navigate the process of ideation and generate innovative business ideas that have the potential for success. [1]

Step 2: Write a Business Plan and Prepare a Proposal

The next thing you should do is write a plan for your business and turn ideas into strategies. It is a crucial step for establishing and growing your business. It provides a roadmap and communicates your vision to potential investors and stakeholders. Here’s how you can prepare a coherent business plan:

Begin by crafting an attention-grabbing executive summary that captures the essence of your business. Include your business name, products or services offered and target market. Craft a compelling sentence that sparks investor interest, compelling them to delve deeper into your plan. Following this, provide a comprehensive company description, incorporating your registered name, address, and key team members. Outline the business structure, and ownership stakes, and provide a brief history highlighting the evolution of your company.

Set clear and measurable goals for your business, encompassing both quantitative and qualitative aspects. Define financial targets, such as revenue, profitability, and return on investment, as well as intangible goals like brand awareness and customer satisfaction. These goals will guide your business growth and provide a benchmark for success.

Describe your products or services in detail, highlighting their unique value proposition and relevance to the market. Include any patents or trademarks associated with your offerings. Utilize visual aids, if available, to enhance understanding. Explain your pricing strategy and the materials used, emphasizing the competitive advantages of your offerings.

Conduct thorough market research to showcase your expertise and demonstrate how your business fills a gap in the market. Compare your business to competitors, highlighting your competitive advantage and unique selling points. This analysis will help investors understand the market positioning and potential growth opportunities.

Develop comprehensive financial plans that encompass a budget and allocation for operational costs, rent or software expenses, marketing, sales, and unforeseen expenses. Present your financial projections, including revenue forecasts and projected profitability. [2]

Step 3: Registration and Legal Steps for your Business

The legal procedure is different for a sole proprietorship or a partnership or a company. But here’s a summary of how you can register your business in Bangladesh.

Start by selecting the suitable application form for your business type and location. Fill it out accurately and gather the necessary documents, including identification papers, business registration certificates, and proof of address. Submit your completed application and supporting documents to the relevant City Corporation Offices or City Council offices in your district.

Once received, your application will undergo a thorough review to ensure compliance with local regulations. This meticulous evaluation is a crucial step to granting you the trade license, providing official authorization for your business activities in the designated field. It is vital to choose the appropriate type of trade license that aligns with the nature of your business, whether it’s general trade, commercial trade, or manufacturing trade. [3]

Moving on to the company registration process in Bangladesh, the initial step involves acquiring name clearance from the Registrar of Joint Stock Companies and Firms (RJSC). Following this, you are required to draft the Article of Association (AoA) and the Memorandum of Association (MoA), and subsequently submit them alongside other necessary documents to the RJSC. Establishing a bank account under your company’s name and ensuring an inward remittance of at least US$ 50,000, which facilitates the hiring of foreign employees, constitutes the subsequent phase of the registration process. Following this, you will need to submit the documents to the RJSC and pay the registration fee. Once the registration is complete and the necessary certificates, such as the certificate of incorporation, AoA, and MoA, are obtained, your company is officially registered. However, additional licenses and registrations, including a trade license, Tax Identification Number (TIN), VAT Registration Certificate, Fire Certificate, and Environmental Clearance Certificate (if applicable), must also be obtained to ensure full compliance with the legal requirements in Bangladesh. [4]

Step 4: Getting Funds and Mentorships

The most challenging moments are when you try to manage money for your new business. There are several ways how you can finance your business. When you start your entrepreneurial journey, try to use your savings or collect from friends and family. It’s called bootstrap financing. Up to a certain stage, it’s ideal that the entrepreneurs use their funds. Once you have an MVP (Minimum Viable Product), it’s time to get more funds and grow the business to gain product market fit or PMF. Initial angel investors are very important as they shape the vision of your business and show you the right paths. You should network with people who are already in this industry and have experience in startup mentoring to convince them to fund your business. [5]

Another way to do this is by involving your business with an incubation or accelerator program. Lately, Bangladeshi big corporations and the government have taken initiatives to boost entrepreneurship. You can submit your idea to programs like BIG, GP Accelerator, and R-Ventures to receive grants and mentorships. Managing funds from venture capital firms is also another way where you can even manage funds from foreign countries! [6]

The last resort is debt financing. You can take loans from commercial banks or individual debtors in return for interest. This is a bit riskier and less convenient for your business. But generating fast revenues can help you overcome the issues involved with debt financing.

Once you have the right idea, the proper amount of money, right people onboarded, it’s time to sail for growth and sustain your business in the market. But that’s a discussion for another day!

Bottom Line

Starting a business in Bangladesh is not an easy thing to do. But the recent changes show that it is being more flexible and favorable for entrepreneurs. If you are a dreamer who can passionately pursue your business and is willing to go the extra mile for building something, do not wait for the right time. Following the steps I discussed, start your journey and tailor the plan based on your unique situations. Best of luck!

References

1. Harvard Business School Blogs –
   https://online.hbs.edu/blog/post/how-to-come-up-with-a-business-idea
2. Forbes –
   https://www.forbes.com/advisor/business/how-to-write-a-business-plan/
3. FMA Society –
   https://www.fmassociatesbd.com/licensing/procedure-to-obtain-all-the-types-of-trade-licenses-in-bangladesh
4. Bangladesh Company Reg Process –
   https://www.usemultiplier.com/bangladesh/company-registration
5. Harvard Business Review –
   https://hbr.org/topic/subject/entrepreneurial-financing
6. Future Startup –
   https://futurestartup.com/2019/09/02/a-look-at-active-startup-incubators-and-accelerators-in-bangladesh/