Today’s generation is passionate about entrepreneurship. Young Indians are constantly considering business plans with low investment, some embarking on their entrepreneurial journey while still in school. While there are many options to consider, setting up a convenience store, i.e. a grocery store, or a supermarket, if you have the wherewithal, can be a good idea.
Grocery stores or supermarkets are the go-to places for household needs like food items, beverages, candies, cleaning material, self-care products, among other things. They provide easy access to everyday household goods.
Why Set Up a Grocery Store
In a country with approximately 12.8 million grocery retailers, you may wonder why you should think of setting up a convenience store. However, it may be worthwhile to note that groceries are the largest consumer segment in India, with some estimates suggesting that Indians spend more than 50% of their monthly disposable income on it.
Grocery stores provide essentials, meaning that even in times of crises, people need these basics to survive. For instance, during the coronavirus pandemic, 62% of Indians in a survey said that they had increased spending on groceries and food, even as expenditure across other areas decreased.
If these aren’t reasons enough, unlike other retail segments in the country that are dominated by large players, about 98% of the grocery market consists of kirana or small, local stores. This is because consumers are looking for “convenient” options to buy their everyday necessities. The next-door grocery store is easier to access when compared to a large retail outlet. Moreover, local grocery stores allow consumers to purchase on credit, which may not be possible at larger outlets.
Clearly, starting a grocery store in India is a good business plan with low investment.
How to Start a Supermarket
If you are convinced about setting up a convenience store or a supermarket, there’s nothing else to do but get started! Here, we provide a 7-step guide to answer any queries you may have on how to start a supermarket all on your own:
- Business Plan
Similar to any other business, you need to start out with a business plan. A business plan for your supermarket should cover basics such as deciding whether you want a physical or an online store, the kind of products you intend to offer, the cost of inventory, pricing of products, competition analysis, financing, among other things. While a business plan is vital to give you business direction, it is also necessary for financing. In case you need to obtain a grocery store loan from a bank, you will need a thorough business plan. To access easier capital for your supermarket business, you can also consider taking a gold loan for commercial property as they do not require too much documentation.
- Perform a Feasibility Study
A feasibility study determines the cost and value proposition of a business through a strength, weakness, opportunities and threat analysis. In simple terms, it determines the possibility of success for your business. While this will already be a part of your business plan, when you consider any business plan with low investment, it is essential that you ensure that you will get returns. It is especially important that you do not compromise on quality in order to lower your investment.
- Register Your Store
Register your supermarket right at the start to formalize the process. Some of the things to consider here are:
- Registering your business under a sole proprietorship, partnership, or other ownership options
- Getting a trade license for your convenience store
- Registering your business under the Shops and Establishment Act of 1953
- Obtaining an FSSAI license
- Tax-related registrations like getting a TAN, GST number, etc.
There may be other registrations required depending upon the direction your business takes.
- Choose a Location
Once you register your business, you need to plan logistics. First, you need to choose a space for your store if you want to start a physical supermarket. Location is an important factor to consider. A good grocery store location should be easy to locate, access and convenient for customers. Even if you want to take the online route, you will need to create a website for consumers to access. This will require funds. A grocery store loan can help you get the requisite money to start working on your business.
- Identify Sources
You’ve registered the business, have a plan in place and chosen a location. The next step is to plan your inventory. A good convenience store should have all products customers need at all times. This means you will need a reliable vendor-partner. Identify wholesale distributors and manufacturers you can source your inventory from. Find one who is prompt, gives you good rates, and has a variety of products to choose from. To just fund procuring these products you can avail the option of inventory financing
- Plan Operations
The next step in setting up your convenience store is to plan its operations. Is your family going to help you run the store or do you need to hire help? What will be the outlay of your physical store? Will you offer home delivery? If it is online, how will you deliver the products to your customers? What are the payment options you will provide? You need to have all of this in place before you start.
- Start Advertising
Once you are certain you are going to start your supermarket, you can begin to spread the word on its existence. Think of an advertising plan. A kirana store can function on visibility and word-of-mouth, but if you want to go bigger, think of placing ads in local newspapers, sending out flyers or even personally informing potential customers. Plan an inauguration so that the word reaches more people. Consider getting a grocery store loan to help with the expenses.
Plan Your Finances
Starting a grocery store will require some financial investment in the start, even if it is a business plan with low investment requirements. Various banks and financial institutions offer businesses loans to kickstart operations.
As a new grocery store, you can avail a small business loan, SME loan, flexi loan, term loan or even a grocery store loan. Working capital loans can be availed to maintain a regular stock of inventory. Applying for external financing can ensure that you have every aspect sorted out before opening your business. However, most of the business loans require you to have prior business experience and are particular about the applicant’s credit history. Gold loan is a viable alternative when an applicant is lacking in those two areas.
Gold Loan as an alternative for funding
While banks and financial institutions can be a reliable source of funding, the process of applying for a loan can often be long and cumbersome. Instead, a gold loan can be a perfect way to finance your supermarket. A gold loan has almost zero documentation requirements. No ITR, no registration. Simply provide your KYC details and get funds that you need. For those who struggle to get a grocery store loan because of a low credit score, this can be the answer to your funding needs. Another benefit of gold loans is that there is no end-use restriction, so you can use the funds as per your convenience.
Rupeek Fintech can provide you with hassle-free gold loans at your doorstep. Rupeek’s gold loans are available at competitive interest rates, provide high gold-to-value ratios, have flexible repayment options and are sanctioned within 30 minutes of receiving gold assets. Moreover, we collect the asset at your doorstep and provide insurance too!
In four simple steps, you can apply and receive funds online! Reach out to us to find out how to get a gold loan instantly and start setting up a convenience store now.