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Grocery Stores in India can be truly described as the heart of the community as they play a crucial role in our communities. Grocery stores sell essential items that are needed on daily basis such as grains, flour, rice, pulses, etc. They also sell plastic products for household use such as mugs, buckets, etc, and cleaning products like soaps, detergents, etc. This is one of the reasons why food and grocery are considered the backbone of the country’s retail sector. A grocery store can be set up in a physical location or it could be an online grocery store. Thus, entrepreneurs who are wondering how to start a grocery store in India that is persistent in demand should definitely read this article.
Now as the importance of grocery stores in India has been recognized, there are a few steps that you need to keep in mind before starting a grocery store. However, in order to start a grocery store in India, then, in that case, one must consider the factors involved and the licenses required i.e., to have a food license commonly known as FSSAI Food License, GST Registration, Company Registration etc.
Organized classification of general store items list:
Frozen Foods- waffles, vegetables, individual meals, ice cream.
Produce- Fruits, vegetables.
Cleaners- all-purpose, laundry detergent, dishwashing liquid/ detergent.
Paper Goods- Paper towels, toilet paper, aluminum foil, sandwich bags.
Supermarkets, Retailers, Food business operators, Transporters, Grocery products Manufacturers, Repackers, Marketers must have FSSAI Registration or License depending upon the size of the Business.
Steps To Consider While Starting a Grocery Store in India:
- Draw up a business plan
- Select the Right Location
- Obtaining Mandatory Licenses
- Trade License
- FSSAI License
- Taxation Norms
- Shop and Establishment Act
- Hire Sales Staff
- Get your business GST Registered
- Take your business online
- Promote your business
Draw up a business plan
First and foremost, step in starting up a grocery store is that you must have a business plan which is like a road map that would chart the nature of the business, and lists the goals, aims, and vision of the business along with the ways to be followed by the business owner in order to reach the designated goal of the business.
After taking into consideration all the financial expenses and all the costs you will be incurred in setting up this business, the minimum investment for a small store would range between Rs 10 lakhs to Rs 20 lakhs and this can also go up in crores depending upon you want to open a departmental store or a supermarket. If you are opening a small grocery store, chances are you would have to limit your choices with a limited Kirana store items list.
Business loans are also easily accessible with great offers in order to own a bigger store. You are just required to make a cost-benefit analysis and then invest accordingly.
Select the Right Location
Choosing the right location for the grocery store is vital as the customer base differs from place to place and products used in urban areas would differ a lot from the products used in the rural areas. A good location is vital as it would ensure that you have a good amount of footfall every day. There are few criteria that should be kept in mind while selecting the right location for the business which are as follows:
- Centrally located: The grocery store must be centrally located so that it can experience large footfall owing to the prime location.
- Easily accessible: The grocery store must be located in a location where it is easily accessible by a large base of customers and be connected and accessible by various modes of transportation too.
- Closer to residents: The grocery store must be located close to a residential area or a locality where the majority of the customers are based. Proximity to the customers helps the business thrive successfully.
Obtaining mandatory licenses
In order to start your own grocery store in India, it is mandatory to accomplish all the legal formalities and acquire the license that you will need to obtain. These will include FSSAI Food License, Shop and establishment registration or GST Registration, and all the other licenses that would be required. You can get in touch with TAX ADVISORY. Permission and licenses required for starting a grocery store is explained as follows:
Permission and Licenses required for starting a grocery store in India:
- Trade License
- FSSAI License
- Taxation Norms
- Shop and establishment license act
Trade License: To start a grocery store in India, A trader is bound by law to have the trade license and as the owner of the grocery store you need to obtain the trade license to make sure that your store is abided by all principles, regulations and ethical & safety norms which should be approved by the local municipal authority.
FSSAI Food License: Any business dealing in food products in India is mandatory to acquire the FSSAI Food License i.e., under the Food Safety and Standard Authority of India as a large number of grocery stores is fit for human consumption. FSSAI during the classification requires various legal compliances to be followed for starting a grocery store, the non-compliance of which will lead to a penalty. We as a consumer look for FSSAI mark behind the packaging of any food items which validates the quality of the products assuring its compliance with regards to FSSAI standards. The turnover of the grocery store determines whether the owner needs to apply for an FSSAI license or registration and if license then State or Central.
| License Type | Eligibility | Validity |
| FSSAI FOSCOS Basic License | The annual turnover of the business is less than 12 lakhs | 1 to 5 years |
| FSSAI FOSCOS State License | The annual turnover of the business is between 12 lakhs to 20 crores | 1 to 5 years |
| FSSAI FOSCOS Central License | The annual turnover of the business is more than 20 crores | 1 to 5 years |
Taxation Norms: Every business owner is required to pay tax and register themselves under GST. Thus, for starting a grocery store in India, it is mandatory to have GST Registration. On Starting a grocery store after GST Registration, you will get a GSTIN, a 15-digit code that is a unique number to identify GST number.
Due to the appearance of GST, businesses avoid dealings with unregistered companies as the whole thing are acknowledged and that will result in reverse taxation.
Shop and Establishment Act: As an owner of a Grocery shop, the first thing to do is to register the shop under the shop and establishment license act. This act describes ‘shops’ as any premise where goods are sold by a retailer or wholesaler and where services are rendered to customers. The reason behind the requirement of this license is to safeguard and protect the rights and interests of the workers, delivery boys, staff employed in the business.
Hire Sales Staff
Hiring the sales staff would totally depend on the size of the grocery store. Your staff members should be such that they are able to handle the crowd of people with smiles on their faces and should be trustworthy and alert.
Take your business online
It is an era of digital marketing. Thus, it is beneficial to sell groceries online to succeed in the business. You are required to have an online website, with an option of online payment through which you can take orders from consumers and get them delivered right to their doorsteps. Or get listed on bigbasket.com, Flipkart, Amazon, and other such online platforms.
Promote your business
While thinking about how to start a grocery store, entrepreneurs need to think of ways to be different from the competition and stand apart. Thus, Advertisement can be an important way for any business in order to draw maximum customers and succeed in business and word-of-mouth is the best way of advertising for your grocery store. Entrepreneurs can advertise the business by adopting various marketing strategies such as providing attractive and unique offers such as combo deals, gift coupons, sponsoring events, advertising via flyers, digital marketing, and various other techniques to spread the word.
CONCLUSION
The importance of obtaining licenses is mandatory in any business. Further, the licenses mentioned above are required in order the start a grocery store in India. At TAX ADVISORY, our team of experts will assist you in obtaining FSSAI License, GST Registration, Shop License and all the required license. You just need to contact us on 9193555055 or you can visit www.taxadvisory.in.
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