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In India, there are approximately 12 million Kirana shops and it is one of the most profitable business enterprises in the country.
And, if we look at a higher level, market giants like Wal-Mart have repeatedly ventured into developing countries like India, Pakistan, and Brazil, demonstrating the potential of department stores to do business.
So it is clear that opening a department store can turn into a profitable business if done right.
So, if you are thinking of starting a Kirana shop but are unsure how to go about it? Well, we have you covered. Here is a step-by-step guide on how to start a Kirana store in India.
First off, prepare a sound business plan by assessing the market, target customers, and your competitors. By analyzing your customer base, you can choose the appropriate location and the kind of products you will sell. Also, study your competitors and what they sell to attract more customers.
Next, highlight all the areas that require funds and figure out factors such as:
The location where you build your department store is crucial, and a poor location may negatively impact your firm.
The ideal site combines visibility, affordability, and livable lease terms. A department shop does significantly better in recently built neighborhoods. You should choose a location with appropriate parking, a decent level of security, and client access to public transportation.
Additionally, look for a place where your firm will have low competitors and great exposure for your business. Your sales will be higher the fewer competitors there are.
Briefly put, location plays an essential role while opening a departmental store in India.
Additional Read: Trends post-pandemic and how businesses can adapt to them
Once you have the layout of your company's future location, the next action is to complete the paperwork. It is essential that you obtain the following licenses before starting your department store business to avoid any legal complications down the road.
If your business earns more than Rs. 20 lakhs in revenue, you need to register for GST. This ceiling has been lowered to Rs. 10 lakhs for states in the northeast.
Now that you have a business plan, the next step is securing the funds for your business. You can consider taking a business loan from a credible lender. It is an efficient way of ushering funds for your enterprise without digging into your hard-earned savings.
You can use a loan EMI calculator to figure out your future expenses like monthly installments and overall interest payable and plan your repayment.
Remember that opening a store is not the end of your worries as you must work hard to sustain it. Purchasing inventory is a crucial step in your journey to regularly attracting customers. You must choose the products as per the demand in your locality to decide what goes up on the shelves.
You can purchase products either directly from wholesalers or a distributor. Nowadays, you can also invest in inventory management software that automatically manages stock lists and re-order unavailable items. With lenders offering competitive business loan interest rates, you can easily finance your inventory purchases.
Hiring a workforce for your shop depends on the size and requirements of your business. You must employ trustworthy and motivated personnel who are willing to learn on the job and can handle customers with a smile. However, avoid hiring additional personnel before profits start rolling in.
If you opt for business finance, you can pay your employees with ease, even during off-seasons. Remember to check your preferred lender’s business loan eligibility terms before applying for a loan.
Promotions can give way to attracting more customers and, at the same time, maximise the number of existing users. When it comes to promoting a business, you must choose the best medium for your target audience and potential customers. In some examples, you can offer free samples.
Word of mouth is the best way to increase sales. If you provide good service and products of the highest quality, customers will promote your store to their friends and family. Although as a retail shop owner, investing in direct marketing, print advertising, and mobile marketing will be profitable for you.
You can do promotions via free WhatsApp greetings, SMS, and online store. Thus, printed flyers, newspaper ads, and social media advertisements are the way to go.
Competitive pricing is the most crucial aspect of managing a department shop, putting everything aside. If you charge too much, consumers will think you're too pricey. However, if you set your prices too low, your goods may come across as being unattractive or cheap.
You will have a terrific start if you establish your prices appropriately and give effective discounts at the outset of your firm. Offering incentives to customers makes them more likely to shop there, making it the most practical way to get beyond start-up obstacles.
Pricing can make a major impact on your business, and additionally, it can enable you to outbid your more powerful rivals.
Additional Read: How SMEs can manage their finances better post-COVID
With the adaptation to a busy lifestyle, people find it easier to shop online, and you should find ways to reach customers’ doorstep. Alongside, it would be best if you also focus on increasing footfall into your departmental store. For this, you can partner up with grocery delivery services to expand your business.
Now that you know how to start a departmental store in India, Tata Capital can help you bring your vision to life. How? Through our business finance offerings tailored to meet your specific needs.
With Tata Capital’s collateral-free business financing, you can secure an amount as high as Rs. 75 lakhs. Enjoy speedy processing, attractive interest rates, flexible EMI plans, and more.
So, check out our easy eligibility and minimal documentation requirements and apply now!
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