written by khatabook | August 6, 2020

A Layman's Guide on How to Start a Kirana Store

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Table of Content


Kirana stores are considered to be the backbone of every Indian locality. This is one such industry where you won’t require a special or a high-profile master’s degree to survive. On the contrary, all you need to do is gain knowledge about the business, be passionate and confident about your new venture and set certain targets or goals you want to achieve shortly. 

You can find a Kirana store in every nook and corner selling products of everyday needs. The foundation of this business is based on a cordial consumer-seller relationship. But with evolving times, coming up with traditional marketing techniques won’t be useful, which is why you would need to upgrade yourselves and be creative in making decisions. Before we discuss the steps of how to start small Kirana shops, let’s help you learn everything you need to know about starting a small Kirana shop.

Did you know? There are close to 15 million or 1.5 crore Kirana stores located in India, situated in every small locality, street and corner. 

What Is a Kirana Store?

Kirana stores are referred to as general stores or shops selling products demanded by the general public from all sections of society for everyday usage. Usually small in size, some Kirana stores might have a large space and a considerably good amount of stock available if the merchant or the trader has sufficient funds available at his disposal. Kirana stores' sales have greatly surpassed the sales value of many supermarket chains and even big e-commerce giants. That’s why setting up a Kirana store in India is termed to be a profitable venture.

Also Read: What is Business Leadership? Meaning & Definition

Five Reasons to Invest in a General Store Business

Kirana store business is something in which you can invest in because of many reasons, which are:

  • Easily Accessible

Since there are many Kirana stores situated everywhere in prime locations, local people can easily access the physical stores, and public transport travellers can also identify such stores because of their wide appeal.

  • Maintaining Long-term Healthy Relationships

The basic foundation of the Kirana store business depends on maintaining long-term relationships with customers so that a loyal customer base is created to ensure no adverse sales fluctuations.

  • Attractive Offers and Credit Facility

Customers who purchase goods from a particular Kirana store over some time are provided lucrative discounts on products by the merchant as a reward for being loyal consumers. Traders also provide credit facilities to storekeepers to strengthen long-term business relationships.

  • Special Treatment 

Old customers are treated with special care by the trader of the Kirana store. Their needs are given priority over others which is appreciated by the customers, ensuring that they would continue buying products of general need from that specific Kirana store.

  • Free Home Deliveries and No Order Limit 

Kirana merchant has staff appointed to provide home delivery of goods to old and loyal customers. There are no order limits for home delivery of goods, making the proposition much more beneficial for consumers.

Also Read: What are the Basics of Business Intelligence for Brands?

Steps on How to open Kirana Store

Step 1:  Have a Good Business Plan in Mind:  

Before venturing into any new business, one needs to have a detailed strategy or business plan prepared to meet future contingencies. Understand the needs and requirements of consumers near the area where you are planning to set up the Kirana store. Ascertain the financial condition of potential customers nearby and decide what kind of goods you will be willing to sell. If it is a posh locality, ensure you keep general and luxurious commodities to satisfy the customers' needs. Ensure that you recruit hardworking staff to perform their duties accurately.

Step 2: Choose the Locality in Which You Wish to Set up the Kirana Store: 

It is an important aspect to consider since the locality in which you wish to start the Kirana store business can help you break even before you start functioning properly. You have to check what kind of customer base is prevalent in that area- is it dominated by young teens or adults and decide what kind of products you will be willing to sell. Try to ensure the availability of as much as urban goods as possible if the Kirana store is situated in an area dominated by youth or young adults. This will make your store more popular among the youth and hence, help in increasing sales volume.

Step 3: Know your Customers:  

As a Merchant, you will need to analyse the kind of products that are being demanded or purchased frequently by the customers. Generally, people living around a radius of 1 to 1.5 km around the store location are considered the target customers. It is important to analyse what kind of products are in demand among customers. For example, a sudden surge in demand for chocolates and gift items could mean that the target customers are generally young, which is why a trader needs to keep excess stock of goods in demand to cater to the needs. Try expanding in newly developed areas to be easily visible among people nearby to become the go-to shop for essentials and general goods instantly.

Step 4:  Analyse the investment Amount:  

One of the most important aspects of opening a Kirana shop business is to prepare an estimate of the costs and expenditures involved and, subsequently, the amount of investment required to set up a Kirana store. If you are thinking of opening a small Kirana store, less investment and staff will be required to set up and successfully operate a Kirana store. Setting up a Big Kirana store will require huge investments, and multiple staff needs to be hired for the smooth functioning of the business.

Step 5: Obtain all Kinds of Licences and Permits:  

As a Kirana merchant, it is required by law that you need to obtain various licenses and permits from the concerned authority and ensure that your business is registered under GST.

Step 6: Check the Competition and Survive: 

As a trader, look around for stores and particular brands that are more in supply and those that are short in supply. Ensure you have sufficient stock for good short in supply in other stores. Look for new and creative marketing gimmicks to separate your store from others and try to evolve with new ideas in marketing to help your business sustain and thrive profitably.

Also Read: Problems of Small Scale Industries and Business Ideas in the Sector

Provision of Grocery Shop Profit Margin in India

Kirana or Grocery store business is deemed highly profitable in India because for the following reasons:

  • Keeping sufficient stock of basic items like rice, wheat, and pulses at lower prices from wholesalers ensures that the trader enjoys a high-profit margin on goods sold.
  • Being in constant competition ensures you develop creative marketing techniques, eventually helping you reap profits in your Kirana store business.
  • Staying in good long-term relationships with loyal customers and providing incentives to staff ensure your business sustains for a long period.

Conclusion:

This was all about Kirana stores, the profit margin applicability of Kirana stores in India, and how to open a Kirana store business in India. We hope that with the help of the information shared in this blog, young merchants and traders will find it much easier to set up a Kirana business in India and expand, grow and earn a generous amount in profits from the business endeavor.

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FAQs

Q: State a reason why the grocery store business is deemed highly profitable.

Ans:

The grocery store business is highly profitable. Keeping sufficient stock of basic items like rice, wheat, and pulses at lower prices from wholesalers ensures that the trader enjoys a high-profit margin on goods sold.

Q: State the steps to open a Kirana store in India.

Ans:

The steps to open a Kirana store are as below:

1. Have a Good Business plan

2. Choose the locality

3. Know your customers

4. Analyse the investment amount 

5. Obtain licenses and permits 

6. Check the competition and survive

Q: State two reasons why you should invest in a Kirana store Business.

Ans:

Two reasons are as follows:

1.  It is easily accessible since stores are located in prime locations

2. Long-term relationships are established with old customers to ensure retaining the loyal customer base

Q: What do you mean by Kirana Stores?

Ans:

Kirana stores are referred to as general store or a shop that sells products that are demanded by the general public from all sections of society for everyday usage.

Disclaimer :
The information, product and services provided on this website are provided on an “as is” and “as available” basis without any warranty or representation, express or implied. Khatabook Blogs are meant purely for educational discussion of financial products and services. Khatabook does not make a guarantee that the service will meet your requirements, or that it will be uninterrupted, timely and secure, and that errors, if any, will be corrected. The material and information contained herein is for general information purposes only. Consult a professional before relying on the information to make any legal, financial or business decisions. Use this information strictly at your own risk. Khatabook will not be liable for any false, inaccurate or incomplete information present on the website. Although every effort is made to ensure that the information contained in this website is updated, relevant and accurate, Khatabook makes no guarantees about the completeness, reliability, accuracy, suitability or availability with respect to the website or the information, product, services or related graphics contained on the website for any purpose. Khatabook will not be liable for the website being temporarily unavailable, due to any technical issues or otherwise, beyond its control and for any loss or damage suffered as a result of the use of or access to, or inability to use or access to this website whatsoever.
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Disclaimer :
The information, product and services provided on this website are provided on an “as is” and “as available” basis without any warranty or representation, express or implied. Khatabook Blogs are meant purely for educational discussion of financial products and services. Khatabook does not make a guarantee that the service will meet your requirements, or that it will be uninterrupted, timely and secure, and that errors, if any, will be corrected. The material and information contained herein is for general information purposes only. Consult a professional before relying on the information to make any legal, financial or business decisions. Use this information strictly at your own risk. Khatabook will not be liable for any false, inaccurate or incomplete information present on the website. Although every effort is made to ensure that the information contained in this website is updated, relevant and accurate, Khatabook makes no guarantees about the completeness, reliability, accuracy, suitability or availability with respect to the website or the information, product, services or related graphics contained on the website for any purpose. Khatabook will not be liable for the website being temporarily unavailable, due to any technical issues or otherwise, beyond its control and for any loss or damage suffered as a result of the use of or access to, or inability to use or access to this website whatsoever.