Kirana Store Business Plan – How to Start a Kirana Store in India

India, the third largest start-up ecosystem, has provided the foundation for many entrepreneurs to fulfill their dream of building something of their own. One doesn’t require higher qualifications from a reputed and, at the same time, expensive institution. We need inspiration, knowledge, hard work, and a little investment. And these are all the simple ingredients for making your dreams come true.

In India, the Kirana store business is one of those businesses in which you invest your hard work and, in return, it provides you with a steady profit. You can easily set up your store with the help of a business loan. But the very first question is:

What is a Kirana Store?

A Kirana store is a general store or shop that provides its customers with daily household and grocery items, like pulses, rice, sugar, shampoo, soap, detergents, etc. The investment determines the store’s size. The concept of Kirana most probably exists only in India, with more than 1.5 crore Kirana stores.

Why Should You Make an Investment in Kirana?

• Higher accessibility to customers
• Pliable payment option via cash or online transfer
• Discount and credit benefits
• Good long-term relationship with customers
• Stocking is only required for commodities that customers demand; thus, lesser risk.

How to Start a Kirana Store

So here are sequenced steps on how you could start a Kirana store:

Step 1: Make a Decent Business Plan

Without proper planning and execution, any business, big or small, can fall apart. To kickstart your business, you may require a loan if you are short of funds. You can apply for small business loans with a low-interest rate, such as term loans, that will greatly aid you in setting up your store. Also, select your staff correctly since this is a new start-up; you would require patient and hardworking employees. 

Step 2: Opting for a Locality

Choosing a perfect locality or spot for your Kirana store is one of the most crucial steps of setting up the store, as it can break or make your business. Analyzing your target customer base or locale, keeping factors such as age group, wealth, lifestyle, etc., into consideration can significantly help set up the business. For example, a locality with several paying guest accommodations may require students from buying stationery items from time to time.

Step 3: Know your Customer

It is crucial to understand what your customers require, their product choices, the frequency at which they buy, and the quantity; you wouldn’t want to either run out of products or overstock them.

Step 4: Invest Cautiously

Remember all the factors you will invest in, like store lease, commodities, employees, cleaning and maintenance, security, etc. Ensure your eligibility for a business loan and interest rate to apply for the appropriate loan for your business and invest smartly.

Step 5: Acquiring the Licenses

Your Kirana store requires a few licenses and registrations to operate legally, which include shop and establishment registration, food license, entity registration, and GST (if your turnover is over 20 lakhs annually, it is compulsory to obtain a 15-digit GST Identification number). You should also register your business under GST to avoid reverse taxation and get various tax benefits.

Step 6: Choosing the Vendor

Select a reliable vendor who promptly provides products of the desired quality and price. Many dairy products like milk, and yogurt, which expire within a short time, need to reach the store accurately to reach the customer before their expiry.

Step 7: Holiday Tactic

Usually, you will keep your store open on weekdays or working days to gain customer trust so they can rely on you for their product. But this holiday tactic works differently; you must keep your stores open, enhancing your profits since customers mostly shop over the weekends or on public holidays.

Step 8: Schemes and Discount

In the end, what customers need is to buy products economically. Schemes and discounts attract and appeal to customers to shop at your store, which will significantly boost your business from its regular pace.

Conclusion

• Kirana store is one of the most profitable businesses which requires lesser educational qualifications. Indeed, the competition is high, but it is so in every business. 
• One can easily set foot in this business with hard work and proper planning. 
• Even during the pandemic, during which most of the businesses crashed, the Kirana store business was a few of those businesses that were not only able to thrive but earned greater profits, given what Kirana shops provided customers with—their necessities.

FAQs

Q.1 Is the Kirana store business profitable? 

Ans: Yes, in the long term, Kirana’s business is profitable.

Q. 2 What is the meaning of Kirana?

Ans: Kirana is a Hindi language word that means daily needs general store.

Q. 3. Which licenses are required to open a Kirana store in India?

Ans: Shop and establishment registration, Food license, entity registration, GST registration, and FSSAI license are required.

Q. 4 Which is the best loan to start a Kirana store?

Ans: A term loan is the best choice for a loan with lower interest rates and higher flexibility.

Q. 5 Which Kirana store product has the highest profit margin? 

Ans: FMCG products like soap, detergents, toothpaste, etc., have a high-profit margin. Apart from these, dairy products, too, yield the shopkeeper great profits.