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How to start a grocery store in India | Step-by-Step

Grocery stores are the most basic but essential need in every community. With the growing population and neighborhood settlements, the demand for grocery stores is also increasing. Therefore, if you want to benefit from this idea and earn money, here is how to start a grocery store in India.

Steps to Start a Grocery Store in India

Step 1 – Registration

Firstly, anyone who wants to start a grocery store in India must register the business with the Government of India.

The following are the mandatory registrations for a grocery store.

Business Registration

If you want to start a small store in a particular locality, you can register as a sole proprietorship or partnership (if you have any other partner)

However, if you have future plans of expanding your grocery store as a brand outlet, go for company registration online.

It would help with increasing the reliability and credibility of your business.

Other mandatory registrations are:

  • Registration under MSME Registration Act 2006.
  • Registration under Shop and Establishment Act from the state municipal authority.

If going for a sole proprietorship, you only need a shop and establishment license and MSME registration to be legally in business.

MSME registration is the cheapest and easiest way to get certification without any renewal cost.

Benefits of MSME Registration for a Grocery Store

a) Legal Entity Proof: Every shop or business needs legal entity proof like Proprietorship Firm or Partnership Firm.

Shop registration under MSME Act 2006 provides a legal entity proof of that right to do business in your area or state.

b) Business Bank Account: Every bank requires legal entity proof to open an existing bank account. Each shop will have to open a separate bank account for daily transactions per RBI compliance.

So based on a shop certificate, you can easily open an existing business bank account.

c) Government Benefits: Each state has a DIC department that makes policy for all small businesses in the respective state.

Meanwhile, based on the Shop License Registration Certificate, you can easily avail government benefits.

d) Trustworthiness: Shopkeepers are traders or wholesalers or any other type of business, but all require trust from the customer. Shop registration under MSME Registration Act gives you confidence among the customer when you mention your license registration number on the challan or shop board.

e) Lifetime Certification MSME: Shop License Registration under Act 2006 gives you lifetime valid certification, so it does not require renewal cost. So there is only a one-time cost for this.

Documents Required to Start a Grocery Store in India

1. Aadhar card copy of the applicant

2. PAN Card copy of the applicant

3. Detailed information about business and personal information.

Step 2 – Investment for Grocery Store

The minimum investment required to start a grocery in India is Rs. 2,00,000 – Rs. 5,00,000 initially.

It includes the following expenses:

  • Registrations – Starting from Rs. 2000 – Rs.10,000 (Depends on ownership structure and authorised capital)
  • Rent/Lease
  • Salaries and Wages
  • Store Setup
  • Buying Stock
  • Utility Bills
  • Hidden Expenses

Step 3 – Acquiring License

To start a business in India, you may need various types of licenses depending on your business type. Here are the licenses, you may require for a grocery store:

FSSAI license

It is one of the essential licenses for registration of the departmental store in India.

FSSAI deals with the distribution, production, storage, sale, and distribution of food for human consumption. The purpose is to ensure that citizens are getting healthy and safe food.

They will check the quality of food items, chemicals used in food, colour, flavour, size, etc. So, only after the test is done you can sell products in the market through sellers. FSSAI also checks the quality of retail and wholesale food items from time to time.

Types of FSSAI License

  • Basic License: Rs.1377/-

If the annual turnover of your business is up to 12 lakhs and you are operating within the city, you will need the basic license.

  • State License: Rs.5377/-

If you are operating in more than 5 cities and the annual turnover of your business gets extended from 12 lakhs ad stays up to 20 crores, you have to take an FSSAI State License.

  • Central License: Rs.10,000/-

If you are operating in PAN India and the annual turnover of the business is more than 20 crores, you have to apply for a central license.

FSSAI Registration Process

  • Firstly, you go to the official website of FSSAI, after clicking on the website, the home page of Fssai will open:
  • Now scroll down from the open page and click on Check Eligibility.
  • After clicking on Check eligibility, a new tab will open. If your business is in one place, click on No, otherwise click on Yes.
  • After clicking on the According option of your production, scroll down and click on Proceed.
  • Again, a new tab will open in which ‘License Category’ on the right-hand side will be written by writing your business’s According Food Registration / State License / Center License.

Documents required for registration

You will need various documents to get FSSAI License / Registration. For example:

  • PAN Card
  • Passport Size Photo
  • Photo Identity Proof Of Food Business Owner
  • Proof Of Premis Possession,
  • Articles of Association
  • Certificate Of Incorporation / Participation Deed
  • List Of Foods to FBO
  • Food Security System Management Plan

Other essential documents:

  • Proposed Location Layout
  • list of Equipment Or Machinery which is installed, in the store
  • Manufacturers Copied NOCS And Licenses
  • Authorization Letter
  • location address proof
  • Government Health Laboratory
  • Water Report Analysis
  • IEC (Import Export Code): which is given by the Director-General Of Foreign Trade
  • For Mineral or Carbonated Water Construction, Water Pesticide Residue Report
  • Milk Provider Name or Milk Source
  • Meat Providers or Meat Processing Unit
  • Certificate allotted by Ministry of Tourism
  • Vehicle turnover proof
  • Proof of annual business

GST Registration

GST (Goods and Services Tax) registration is a must for any supplier doing business anywhere in India.

Where sales exceed Rs.20 lacs (Rs.10 lacs for north-east states), it is essential to register and acquire GST for the financial year.

Documents Required for GST Registration

  • PAN card number of the applicant
  • Business registration or certificate of incorporation
  • Proof of Identity and Address of Promoters/Director with recent photograph
  • Aadhar card
  • Digital signature
  • Business address proof

Step 4 – Hire the Employees

Even if you are starting a small store, do hire a helper. Because it can be difficult at times to manage everything alone.

However, if you plan to go big and start a branded store, you will need the following people:

  • Store Manager
  • Sales Person (5-6)
  • Security Guard
  • Checkout Machine Manager

Step 5 – Start the Grocery Store

After setting up the store, registering it and hiring the team, it is time to start the business. Choose a good day to start the business and plan an opening ceremony.

You can have a small auspicious event and start with your operations.

Marketing and Promotion

Firstly, to make everyone aware of your store, distribute brochures along with newspapers. Also, you can circulate digital pamphlets in your WhatsApp groups. And you can also market in your store in Mumbai, New Delhi etc. and can also go for company registration in Mumbai.

In addition, to increase your sales after learning how to start a grocery store in India, learn about the various schemes and plan discounts you can offer to your regular customers.

Likewise, it is advisable to start door delivery services for groceries, so that people find you convenient and easy to reach.

Products to keep in Grocery Store

Make sure to do research and visit the nearby stores to find out what products you should keep and what is in demand in the neighbourhood.

Also, find out the brands they prefer the most so that you can have good sales. Keep the preference and budget of the neighbourhood in mind to earn profits in the business.

To sum up here are the basic products you should have:

Coffee, Tea, Pulses, Spices, Flours, Rice, Oil, Ghee, Refined, Vegetables, Fruits, Maggi Noodles, Dairy products, shampoo, soap, shaving products, flavoured spices, chips, ready to eat snacks and dishwasher soap and liquids.

Basically, keep everything that is required in a day to day household.



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