How to Start a Kirana business? [Kirana Store Business Plan]

Complete guide on how to set up Kirana business

If you're planning to start a Kirana business in India then this guide is definitely going to help you with your research. From detailed kirana store business plan to steps to set up a kirana business, investment required, and profit margin, we have tried to cover all the finer details.

Kirana stores are the lifeline of every Indian locality and probably one of the only industries which do not require any fancy Master's degree from an expensive college. Knowledge, decent funding, and a drive to open your store are all you need to begin your journey in this humongous market.

A Kirana store business doesn't have a specific target audience but due to its heavy market presence, the competition mostly remains high. Venturing into traditional marketing methods won't work that effectively in 2020 hence, we are here to upgrade your expertise.

Before we begin discussing the steps to setup Kirana business let us understand-

What is a Kirana store?

• A general store or market/shop for your everyday needs.
• Mostly Kirana stores consist of daily needs and commonly used grocery items.
• The store size of any shop depends on the kind of funds available to a local merchant.
• The concept of Kirana stores exists only in the subcontinent of India.
• The power of Kirana stores has stood the test of time smoothly for centuries, from monarchical ages to 2020.
• Even during the pandemic, local Kirana stores have surpassed sales of many supermarkets and eCommerce websites.
• There are over 15 million Kirana stores spread across every city, town, and village in India.

Why Kirana store business is worth investing?

1. Easy accessibility via locals and public transport.
2. Helps in maintaining long term and healthy relationships with regular customers.
3. Stocking only customer-relevant goods and commodities.
4. Attractive offers and credit account advantages.
5. Offering free home deliveries for no specific order limit.
6. Providing digital payment options and also online shopping catalogs.
7. Special or personalised treatment is appreciated greatly by the laymen.

How Do I Open A Kirana Store?

Check out these easy steps and effective methods on how to start Kirana store business.

Step 1- Have A Solid Business Plan

1. Any small or big business turns into a quick disaster without a proper business plan to execute.
2. Understand the financial status of the customers you're targeting and price your commodities accordingly. Start by analysing the preferences of your potential buyers.
3. By tracking their needs, likes, choices, preferences, and the frequency of purchasing you can easily figure out a selling strategy.
4. Keep in mind about the type of staff you would be recruiting as being a startup grocery store would require hardworking individuals.

Once you have the solid kirana store business plan, you can proceed further to the next steps.

Step 2- Choose Your Locality

This is the most important part of starting a Kirana store. Your locality has the potential to make or break your business even before you begin.

1. Every area has a certain type of customer base, and its needs depend accordingly.
2. Tracking the age groups of people in your area of operation will help you be clear about the regular products that'll be in demand and kept in stock.
3. While if you open a store in a fancy posh locality or a youth-oriented area, your stock will consist of urban commodities and the latest stocks.

For instance, a small grocery store in a village will deal with affordable household articles where the consumers are mostly local merchants, farmers, and middle-class families.

Step 3- Understand Your Customers

After you have finalised your locality for opening a Kirana store, the target shifts to understanding your daily or potential customers.

1. What do they prefer to purchase frequently?
2. Generally, your target market lies around 1 to 2 kilometres within your store location.
3. Expanding your market in newly developed areas of a city is a guaranteed success. You would be easily visible to the entire neighbourhood, and since being newly built might also bring the hopes of getting more space within affordable pricing.

Also Read: Eco-Friendly Business Ideas for Small Business Owners

Step 4- Calculate Your Investments

When you are zeroing in on location, commodities, suppliers, and staff do not forget to skip your investments on the same.

• If you are opening a small scale Kirana store, chances are you would have to limit your choices by having lesser staff, and limited kirana store items.
• Location, rent, inventories, along with other conveniences like standalone stores or a neatly stacked up air-conditioned supermarket would require varying amounts of investments.

On average, a decent store investment with all costing might start from 50,000 rupees to 2 lakhs in the beginning.

Step 5- Digitise Your Kirana Store

1. With the dawn of the pandemic, the only stores that have managed to survive without incurring major losses are- Kirana stores for essential supplies and the pharmacies for emergency medications.
2. Most people who avoid going outside to maintain social distancing are opting for online shopping.
3. Digitising your store doesn't just mean home deliveries and WhatsApp for business but also managing your credit/debit customer accounts using OkShop.
4. With every other item being available at the click of the screen, your store should be easily accessible as well.

Step 6- Obtain All Licenses/Permits

There are certain legal laws and licenses to open a grocery store in India that's mandatory to abide by. These permits include-

1. Shop & Establishment Registration
2. Food license
3. Entity Registration

• You should also get your business registered under GST to avail various tax benefits and avoid reverse taxation.
• If your annual turnover crosses over 20 lakhs then it becomes mandatory to obtain your GSTIN or your unique 15-digit identification number.

Step 7- The Weekend Gimmick

Most store owners have a fixed time during the weekdays, even though they live close-by.

• Being flexible and staying open for longer hours, generates a sense of trust amongst nearby customers to get everything they need available at your store even after hours.
• The weekend tactic is the one where you keep your stores open for weekends and festivals, that'll help you produce good profits.
• Being open during odd timings helps in getting loyal consumers and increases the appreciation via word of mouth.
• Lastly, most customers go shopping on weekends, due to being occupied with work all week.

Step 8- Eye Your Competitors

Before beginning to open your store, you should visit your nearby competitive stores to get a lay of the land.

1. Browse around the structure of the shop and the brands they mostly stock upon.
2. Evaluate your opportunities and look for creating newer tactics.
3. Research your competitors and understand the techniques they use for effective marketing.

Also Read: Mantras and Tips for a successful business

Step 9- Additional Services

1. From designing an attractive store to providing free home deliveries everyone likes to be treated specially.
2. Figure out what additional thing or service you can provide that would separate your shop from all the other Kiranas in the neighbourhood.
3. Promising good quality kirana items or promoting certain brands may also help your case occasionally.

Step 10- Offering Attractive Discounts

When you are a first-timer or a fresher in your area, you have to come up with various methods to keep your customers engaged and increase sales gradually.

1. Advertising is very important for all small and big businesses to get noticed, and for endorsing your grocery store, you will have to use all your resources.
2. From involving your families, friends, and relatives, word of mouth will be the best technique to be known in a local Indian market.
3. Depending on the type of your store print out flyers for local newspapers, do mobile marketing, or put out an ad in the business pages.
4. You can also opt for social media engagements by putting out exciting offers or activities like discount vouchers or giveaways for attracting more crowds.

Is Kirana Business Profitable in India?

1. In making a kirana store business model, you should also take care of getting your stocks updated from known suppliers and wholesale retailers to avail cheaper pricing on basic commodities like- rice, atta, pulses, shampoos, soaps, oils, and more.
2. It is a competitive field but following the above tips can give your market a proper standing and recognition sooner than you had expected.
3. Staying loyal to your staff and regular customers is the ultimate way to stand strong amongst every competitor.

How OkCredit can help your Kirana Business?

You can also use the OkCredit application to streamline your increased sales in the Kirana business and maintain a digital ledger of all the credit and payment transactions with your customers. This will reduce manual and mental burdens, and help you reclaim time for focusing on core activities. Get rid off conventional bahi khatas and go digital with OkCredit. Download OkCredit now!

Also read:

1) Grocery Stores In Lucknow
2) Grocery Stores In Jaipur
3) Grocery Stores In Bangalore
4) Grocery Stores In Chandigarh
5) Grocery Stores In Kolkata
6) Grocery Stores In Mumbai

Stay updated with new business ideas & business tips with OkCredit blogs in English, Hindi, Malayalam, Marathi & more!
Download OkCredit now & get rid of your bookkeeping hassles.
OkCredit is 100% Made in India.

FAQs on Kirana business

Q. How do I start a Kirana store business?

Ans: For starting a Kirana store business you need to take care of-

1. Having A Solid Business Plan
2. Choosing Your Locality
3. Understanding Your Customers
4. Calculating Your Investments
5. Digitising Your Store
6. Obtaining All Licenses/Permits
7. The Weekend Gimmick
8. Eyeing Your Competitors
9. Additional Services
10. Offer Attractive Discounts

Q. Is Kirana business profitable?

Ans:
1. Yes, The Kirana store business is profitable in the long term.

2. Starting on a smaller market will give you a chance to experience market conditions and limit your chances of failure.

Q. How do I start a small grocery store?

Ans: For starting a small-scale grocery store business, you need to-

1. Figure out your niche or forte
2. Find an investor or get a loan from a bank
3. Rent or Lease a small space
4. Avoid hiring additional staff before profit rolling
5. Find trusted distributors/suppliers for better deals
6. Promote different brands occasionally

Q. What is meant by Kirana stores?

Ans:
1. A Kirana store is your small day-to-day departmental store that stocks most of your household items.

2. Generally, small scale local stores sell products on MRP or avoid offering king size products and focus on small quantities to stabilise sales like- noodles packets, laundry detergents, soaps, atta, etc.

Q. What is the meaning of Kirana?

Ans. Kirana (kɪˈrɑːnə ) (in India) is actually a Hindi language origin word, that usually means a daily needs departmental store run by families.

Q. Will Kirana stores survive?

Ans:
1.  Kirana store is one of the few top businesses that have boomed during the Pandemic.

2. Yes, survival or a Kirana store or grocery store is a definite possibility in every season and year.

Q. Are kirana stores profitable in India?

Ans:
1. Yes. The Food industry and consumption are one of the best businesses that stay atop in India.

2. With the correct amount of investments and target marketing, grocery stores start to doll out profits within months of beginning.

Q. What do we say Kirana in English?

Ans:
1. Kirana in English is common for a grocery or a general provisions store.

2. In India, the Kirana store means daily supplies or your local departmental store.

Q. Which license is required for Kirana store?

Ans: The licenses needed for opening a Kirana store in your locality are-

1. Entity Registration
2. Food License
3. Shop & Establishment Registration
4. FSSAI License

Q. What is the profit margin in a grocery store in India?

Ans:
1. Apart from store capacity, the profitability for grocery stores in India ranges from anywhere between 5% to 25% percent.

2. Kirana store is a fruitful market in India, and, hence, many local and imported brands compete to provide and maximise their reach in the common man's market.

Q. How does a Kirana store business work?

Ans:
1. In common terms, wholesalers, and retailers buy or sell commodities on a week-long credit-based system which major conglomerates do not.

2. Inventories for Kirana stores are purchased on a credit basis, sold later, and paid back to the distributor whilst understanding profitability margins.

Q. How to start an Online Kirana Store?

Ans: There are many steps to start and manage an online business, its best to make your store digital instead of collaborating with eCommerce websites. If you want to take your business online for free, you can use the app- OkShop. In this app, you can-

1. Create catalogs
2. Send images and details on WhatsApp
3. Send payment and reminder alerts
4. Keep track of daily sales
5. Enjoy a user-friendly interface
6. Understand convenience with multiple language options

Q. How much should you invest in a grocery store?

Ans: In India, including things like- licenses, rent, provisions, etc. you can easily expect your Kirana store startup cost to reach around Rs. 50,000 in the initial stage.

Q. How many Kirana stores are there in India?

Ans:
1. According to various records and surveys, India has over 12 million Kirana stores across the country.

2. It is one of the most profitable businesses in India.