business plan

How to start your own data entry business?

Every time you receive a mail or message asking you to start your own business of Data Entry and outsourcing, you may or may not think how profitable it is and is there any scope for growth of this business. But Data Entry business in India is gaining high popularity from past few years because of digitalisation of every data in every organization. So, there is ample work for you if you take a dip in the sea.

From a small vendor to big corporate houses maintain minute data of their business and those data needs to be stored and maintained in the right and tactful manner. Data Entry business serves this organization who wants to outsource the work for maintaining their data on the one hand and on the other there are companies who want to digitize their old records which are on pen and paper.

Type of Data Entry Business Setup In India

As any other business setup, Data Entry business can also be started as a sole proprietorship or with partners and finally as a private limited company. It depends on the amount of capital you have for the business either jointly or individually.

Sole Proprietorship business is an old age concept and doesn’t work well for low investment business. Data entry business requires efficient and effective management for the smooth running of the entity and that is why it is recommended to start data entry business as a partnership firm or a private entity in India. The main issue with sole proprietorship data entry business is that the entrepreneur or the proprietor himself is liable completely for the business and in the event of bankruptcy, the proprietors need to pay off the whole liability. Sole proprietorship business comes under ‘unlimited liability’ clause of the Company’s Act. Unlimited liability means personal assets of the proprietor can also be used for paying off the liabilities of the firm.

If you want to start sole proprietorship data entry business, you need to do it as limited liability option which can be done through legal paperwork under the Company’s Act. Under this clause, your business assets are weighted against the liabilities of your business and your personal assets are not touched on the occasion of any bankruptcy and winding up of the entity.

If you start your data entry business as a partnership firm then you can arrange a good amount of capital for the business and you are not solely liable for the business liabilities and you have to divide your profits and losses and none of your personal assets are accounted in the case of winding up.

Finally, the best way to start and run your data entry business is in the form of the private firm as there is no unlimited liability and you can invest a good amount of capital with which the profits are higher in the long run.

Legal formalities are essential to set up a data entry business as it is for any other business. You must have registration certificates and license to run the business along which will help you get various benefits from Tax authorities and other governing bodies of the companies.

Scope of Data Entry Business in India

Globalization has gifted India numerous outsourcing business opportunities out of which data entry business has always been one of the most popular businesses. There is ample scope for the progress of this business in India because of the rapid growth of the IT sector in India and also because of the digitalization of every sector in the country beside the opportunities that are abundantly available from foreign countries.

From basic data entry services like form filling of government enterprises, private and public entities to complicated data conversion of some IT company are part of this business which provides endless projects and works to the data entry business entities. Data is the most important that any business has at present time and maintenance of the same is mandatory. So, if you are about to start a data entry business then you must not be worried about the availability of projects or work if you know how to acquire clients for the same. If you are good at your job, there are ample opportunities.

Data Entry Business Profit Margin & Investment

Another factor which is one of the major benefits of this business is that its low investment. You can start your data entry business from your home by doing freelancing work at the beginning which requires almost no investment and then you can widen your arms and form a company or partnership business which also requires comparatively low investment.

Moreover, the profit margin is huge because of the expense and overheads of your data entry business are also low compared to any other business.

Difficulties in Data Entry Business

One of the main hurdles that you have to face in data entry business sector is the fierce competition. The skills required for this business is relatively easy to acquire and that is why there are an infinite number of people who are taking a dip into this business to source some income. Only fine and perfect data management skills can retain the clients for longer time period. Accuracy is the key to success in this business.

The next challenge that this industry faces is the threat to the security of the data. As the data of any enterprise is crucial and needs to be highly secured. Data entry business entities need experienced people for the same as the clients will trust you with their data which if become available in the market or with any third party can incur a great loss for the company.

Financial planning needs to be sound when you flag off your business. Though the expenses of Data entry business are on the lower side but without proper financial management, it can turn out to be a great failure. Most of the data entry businesses fail due to this reason in India. The simplest way to maintain your books of accounts and financial planning is using best software for the same along with an employee/partner having sound financial knowledge.

To keep track on your progress, you need to track your peers too which is another challenge in this business as there are lots of data entry business entities. But you must try to track the big firms so that you can have a standard margin for your profit.

Data Entry Business Plan India

A solid business plan is a must for Data entry business otherwise, it can fail miserably like other data entry business entities you see every day. Your business plan must include all

  • Capital/ investment in the business
  • Type of liability
  • Revenue projection and estimates
  • Industry average
  • Number of people to be employed at a given point of time
  • Remuneration of the employees
  • Overhead charges
  • Miscellaneous Expenses
  • Tax implications and benefits

With all these data and other financials, you need to make a sound financial model to give you an estimate of your profit and losses of the business. The revenue is different for different kind of service you provide so you must make a clear model including all the information. A financial model and a business plan will help you see all the hurdles that you might face in the near future and you can be well prepared for the same. Another thing that must be a part of your financial model is the rate of the dollar as your business will be dependent mostly on foreign currency; the currency estimation plays an important role.

Skills Required To Start Data Entry Business

When you are setting up a business on your own or with partners or as a private concern, you need to have excellent business management skills besides the skills required for Data entry and management. Since there is an array of services under the Data entry sector, the skills required are also specific to the type of service but the general skills which are required to start the business are as follow:

  1. Typing skills with perfection
  2. Digitalise paper documents with accuracy
  3. IT skills and knowledge of software related to the specific service
  4. Reading skills par excellence
  5. Effective Scheduling
  6. Managing freelancers and employees
  7. Excellent communication skills both in writing and verbal
  8. Coordinating abilities that is managerial skills
  9. Management of deadlines and timeframes
  10. Other computer skills is a plus

Managing finance will be difficult if you don’t have a trustworthy employee to look after your finance of the business and if you are taking the charge of the financials on your own, then you got to be good with the same. Adhering to the deadlines and accuracy are the fundamentals of this business without which your profit will churn out without your knowledge.

Legal Formalities

The legalities are same as in any other business when you are setting up a registered Data Management firm and it would include:

  • You have to acquire the DIN (Director Identification Number). It can be done on the online
  • Need to obtain a digital signature from the above-mentioned for DIN.
  • Authorize your all business documents by gazetted officers or authorized banks or office of the superintendent.
  • Register your company with Registrar office and get the Certificate of Incorporation and then only you can start your business officially.
  • Pay the fee for registering your company.
  • Acquire the seal or trade for your company after the registration is done.
  • PAN is a must for any business in India.
  • TAN which is Tax account number has to be obtained for the business.
  • Register your company with the inspector in office, Tax department for profession tax and with the Employee’s provident fund organization.

For all these procedures to be completed within stipulated time and with efficiency, a notary or a Chartered accountant has to be hired.

Client Acquisition and Business Generation

Finally, when all the formalities are done and you have officially started your business, the main concern is acquiring clients and having business from them. Clients for this business are mainly large companies, MNCs and also local and national companies who have a huge amount of data to be maintained. Most of the clients are from the western part of the world as they find the wages of Indian employees lower than their employees. For acquiring the clients, you need to have a website featuring all your services; you need to have contacts with companies from where you can source work. Social Media can also be helpful in acquiring clients and their business.

If you provide service with accuracy and efficiency, you can earn good profit from this business. Though the competition is huge but with perfection, this business has enormous scope in India at present time.


  1. I want to start data entry or ads posting business in delhi, from where i can get good opportunity and good company those who are providing this, please suggest me.

  2. I like to start to own data entry business.where did i get bulk projects.and it is profitable business

  3. I like to start to own data entry provide good services for a client with small investment and where did i get bulk is profitable business


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