Food and grocery make the backbone of the retail industry and kirana business is becoming a popular segment. Shop owners need to familiarise themselves with the various needs of their customers, licensing requirements, and food certifications to help them succeed in running a city or village kirana store.
Kirana stores are found in every corner of cities and villages, working towards meeting the needs of daily consumers. India's retail industry is growing fast and plays a pivotal role in the nation's economy. A city or village kirana store owner can make huge profits from sales, provided they have a solid business plan. During the COVID-19 pandemic, when lockdowns were implemented, wholesale kirana suppliers played a huge role in supplying groceries and sundries to doorsteps. To understand how to start a kirana store, you must first grasp the basics and learn the different types of kirana licences available. There are also expert marketing strategies that can be applied and we will also cover how to apply for the licensing applications. The good news is that it is very straightforward to open a kirana shop business and get running quickly. Here's how.
Did you know?
Kirana stores account for 75-78% of the consumer goods market in India.
Why Do You Need a Trade Licence?
A kirana business must acquire a trade licence before setting up shop or selling consumer goods and services. Each state has its quality control benchmarks in place and there are legal technicalities involved when getting a trade permit.
Obtaining a kirana store permit within 30 days after trading begins is mandatory and the application process for a trade permit takes only eight days. Delays are possible only if the kirana store owner's documentation is not up to the mark. Trade licences can be dropped or revoked if store owners don't meet the state's exchange permit conditions.
The following documents must be submitted before opening a kirana store business to get the trade licence. They are:
- PAN card
- Bank statements
- Certificate of Establishment
- ID proof and address proof
- Colour photographs
- Sale Deed
- Utility bills such as water, telephone, and electricity bills
- Photographs of the trading premises from various angles showing the goods being traded clearly
- For existing traders, proof of trade licence renewal from Jan 1st to March 31st of the year
The Shops and Establishment Act, 1953
If you are the owner of the kirana store business, your priority is to make sure you get the business registered under 'The Shops and Establishment Act, 1953.'
There are many working hours and workdays pre-defined under this act. It mentions that you cannot exploit your store workers and the act is designed to keep their well-being in mind. As the kirana store owner, you must abide by these rules and acquire a store permit.
Guidelines are laid down for paid and maternity leaves, including conditions for employment and termination of contracts. Holidays, non-working days, opening and closing store hours, and other important terms and conditions for running kirana stores legally are mentioned by this act.
Female employees have to be respected and taken care of well. Sexual harassment is not tolerated nor are any forms of misconduct from store owners and other employees. The work environment must be safe, secure, and conducive to the modern kirana store business model.
Kirana Store Business Growth Tips and Tricks
Make Your Business Go Online
Small businesses and kirana store owners are transitioning towards a digital business model that lets customers add products to shopping carts and enjoy doorstep delivery. You can promote your online store through social media pages and run virtual events to foster engagement.
Paid Facebook campaigns, smart blogging, Instagram promotions, and YouTube video ads are some ways to grow your business. You can connect with other influencers and big players in the industry online and ask to collaborate with them on various advertising and promotional campaigns. Paid brand partnerships are becoming popular on Instagram and YouTube. Starting an online kirana store will enable you to reach clients you normally wouldn't be able to connect to the traditional way.
Consider Opening Your Store on Sundays
If you are serious about making high kirana store margins, you should consider this. Good store timings for new stores are from 8 AM to 10 PM. Most kirana stores choose to remain closed on Sundays, but you will get more sales if you keep yours open. There are a lot of shoppers looking for kirana stores open on weekends, and you can cater to that market and make nice profits.
Pay Attention to Customer Engagement
The best way to attract and retain new clients is to interact and engage with them. Pay attention to customer engagement and talk to them both online and in-store. Brand reputation is built on how the owner interacts with buyers and if you maintain consistency in conversations, you will likely get more sales. Be helpful to your customers, no matter their age, gender, ethnicity, job, or origin.
For loyal customers who keep coming back, you can offer them exclusive discounts or create referral programs that they can refer to friends. You can improve your kirana shop business by asking customers to leave a review or testimonial on your website and Google pages.
Focus On the Visuals
Don't neglect the visuals when building a website for your kirana store brand. It is recommended to work with a professional graphic designer and match the feel of the store with what your customers are looking for. If your store focuses on book sales more, you'd want to go with a library theme. As for your brick and mortar kirana business, work on the interior design. Visuals matter and the looks your store exudes can dictate whether or not new customers will enter or choose not to. Add a personal touch to your store and make sure your goods are organised and easy to find. Nobody likes a cluttered store.
Improve Customer Service
You're likely to stand out if you can improve various aspects of your business, such as improving shipment speeds, offering more delivery timeslots, and having a return and refund policy. Doing deliveries during midnight hours or late can positively impact your business ratings, and you should also plan your funding for later.
If you are just starting, you can fund the store using your capital or get an MSME loan from NBFCs. It is advisable to apply for business loans once your store starts getting traction and makes sales. Be sure to restock your inventory and analyse customer wishlists to see which products are in demand. Good inventory management software will help you with this step and ensure perishables and other products don't waste. You can also consider converting your kirana store into a franchise model if it performs well in the future. You should also apply for the Bharat QR code, an easy and convenient way to collect payments from customers for various purchases.
Obtaining the appropriate licences and permits is very important for new kirana store owners and having a strong business plan is key to success. The legal process of starting a kirana store business is not that complicated and store owners can set up a small shop to get started.