Buying finished goods from manufacturers and then selling them to users is called retail business. The goods sold through a retail business have a higher cost in comparison to goods sold through a wholesale business.
In India, retail business contributes 12% of the GDP and is the third-largest revenue generator
To start a retail business in India, there are certain policies to be followed. The purpose of this blog is to help aspiring entrepreneurs in establishing a retail business in India. The blog aims to give an insight into practical steps and strategies required to navigate through the Indian Retail Market so that ventures can launch successfully and have sustainable growth.
Steps to Start a Retail Business in India
- Perform detailed market research, identify the consumer needs, competition, and target, and lay down an informative business strategy.
- Plan the business outlining the vision, mission, structure of operations, marketing strategies, and financial projections.
- Register the business and plan out timelines to obtain the required licenses and permissions.
- Find a location if it is of brick and mortar type or decide on a platform to operate if it is an online business.
- Implement result-oriented marketing strategies to reach out to consumers.
Types of Retail Business
The retail business industry in India comprises a variety of business models considering the varied preferences of Indian buyers. They are mainly divided into 4 types which are detailed below:
Brick and Mortar Stores
These include traditional stores such as family-owned retail/kirana stores which sell groceries or a supermarket which sells multiple goods. It can also include a garment store, a jewelry store, and an electronic gadget store to name a few, which can be considered as specialty stores based on the consumer needs.
Ecommerce Platforms
Ecommerce platforms that sell online have gained considerable popularity in India in recent times, especially after COVID-19. Starting from essentials such as daily needs to automobiles, one can shop from the ease of their home through such eCcommerce platforms which are booming with attractive offers for consumers who buy on a retail scale. Also, a few websites supply directly to customers without any retail middlemen but at retail prices to mark their presence in the market.
Franchise Opportunities
The franchise market in India is evolving rapidly. It includes a variety of sectors such as education, food, and retail. With the growth in the economy, the franchising demand has increased which has in turn attracted a lot of global and domestic investors in the retail industry. Franchise models can be easy as they have all the prerequisites, one has to just invest and start doing good business.
StartupTalkyApoorva Bajj
Mobile Retail and Pop Up Shops
A creative approach in retail selling is the mobile stores and pop-up shops. Unlike traditional stores, these businesses allow the engagement of consumers in a flexible and dynamic environment. This includes making use of temporary setups or vehicles which can be easily moved from one place to another. For example, a food truck which can be taken to any place depending on consumer demand. This helps brands reach out to a wide range of consumers.
Advantages of Starting A Retail Business In India
- Expanding consumer market
- Improvement in disposable income
- Government programs to promote entrepreneurship
- Choice of market niches and product selection range
- Potential to incorporate new technologies
Registrations Required for a Retail Business
Retail business in India needs licensing and registration. This is also to procure permission from the concerned departments to run the business under the rules and regulations stipulated by the government under the Consumer Act. Hence one should understand the requisites to start a retail business. Below are a few pointers to go through for registration:
- Registration options for the chosen business structure
- Getting the required permissions and licenses
- Registration of taxes and compliances
- Insuring the property
Steps to Register a Retail Business in India
1. Market Research
- Identify Target Market: Understand who your potential customers are
- Competitor Analysis: Study your competitors to identify their strengths and weaknesses
- Trend Analysis: Keep up-to-date with market trends and consumer preferences
2. Business Plan
- Executive Summary: An overview of your business idea
- Market Analysis: Detailed findings from your market research
- Marketing Strategy: How you plan to attract and retain customers
- Financial Plan: Budget, projected income, expenses, and break-even analysis
- Operational Plan: Daily operations, management structure, and logistics
3. Legal Structure and Registration
- Choose a Legal Structure: Decide whether you want to be a sole proprietor, partnership, LLC, or corporation
- Register Your Business: Obtain the necessary licenses and permits
- Tax Identification Number: Apply for an EIN (Employer Identification Number) from the IRS
4. Location and Space
- Select a Location: Choose a location that is accessible to your target market
- Lease or Purchase: Decide whether to lease or buy retail space
- Layout and Design: Plan the store layout for maximum customer engagement and efficient operations
5. Financing
- Initial Investment: Calculate the amount of initial capital required
- Funding Sources: Look into various funding options like personal savings, bank loans, or investors
- Financial Management: Set up accounting systems to track income and expenses
6. Inventory Management
- Select Suppliers: Research and choose reliable suppliers
- Inventory System: Implement an inventory management system to track stock levels
- Product Range: Decide on the range of products you will offer
7. Staffing
- Hiring: Recruit staff that meets your business needs
- Training: Provide comprehensive training for customer service and product knowledge
- Management: Establish policies for staff management and operations
8. Marketing and Sales
- Brand Development: Create a strong brand identity
- Online Presence: Develop a website and utilize social media
- Promotions and Advertising: Plan advertising campaigns and promotions to attract customers
- Customer Service: Focus on providing excellent customer service to retain customers
9. Point-of-Sale (POS) System
- Choose a POS System: Select a reliable point-of-sale system to handle transactions, track sales, and manage inventory
- Payment Methods: Set up various payment options like credit cards, mobile payments, etc
10. Launch and Evaluate
- Soft Launch: Consider a soft launch to test your operations before the official opening
- Grand Opening: Plan a grand opening event to attract customers
- Feedback and Adjustments: Collect customer feedback and make necessary adjustments to improve your business operations
StartupTalkyArbaz Sayed
Starting Retail Business Online
To start an online retail business one has to understand the cyber protocols and plan accordingly. Below are a few pointers for online businesses:
- Building an eCommerce website
- Selecting a proper platform
- Digital marketing plans
- Customer engagement post-purchase in the online setup
- Logistics to ship the goods purchased
With the above details, we can understand that India is one of the best places for retail businesses. Also, the retail business comes with some paperwork and an understanding of the system. Hence if a business person can get a hang of all these then retail business is a profitable business in India.
Advantages of Starting a Retail Business in India
Starting a retail business in India can be a great idea because the market is very large and growing fast. Here are some simple reasons why opening a retail shop or store in India is a good opportunity:
- Talk directly to Customers: This helps you understand what people want to buy in the future and plan your business better.
- Grow without Moving: You can add more customers easily without changing your store’s location.
- Sell many types of Products: Retailers can offer a wide variety of items, unlike wholesalers or factories.
- Lower Costs: Retailers don’t need to store a lot of stock, and they avoid paying commissions to middlemen.
- Fast Growth: Because they give customers more choices, retail businesses can grow quickly.
- Make your own Products: Retailers can also start making their own goods, which lowers costs and gives better control over quality and pricing.
- Stronger influence on the Market: Retail shops help promote products and increase competition in the industry.
StartupTalkySakshi Jadhav
FAQs
What is a retail business?
Buying finished goods from manufacturers and then selling them to users is called retail business. The goods sold through a retail business have a higher cost in comparison to goods sold through a wholesale business.
How to start retail business in India?
To start a retail business in India, first decide what products you want to sell. Choose a good location with high customer traffic. Register your business by getting a GST number, trade license, and shop act license. Arrange money through savings or a loan. Find trusted suppliers for your products and set up your shop with shelves and stock. Hire staff if needed. Promote your store using local ads and social media. Once ready, start selling and focus on customer service to grow your business.
What are the types of retail business?
The various types of retail businesses include brick-and-mortar stores, eCommerce platforms, franchise stores, and Mobile Retail and Pop-Up Shops.
Which are the best retail business in India?
Grocery stores, clothing shops, and mobile/electronics outlets are among the best retail businesses in India. They have high demand, regular customers, and good profit potential.
Which are the best profitable retail business in India?
Some of the most profitable retail businesses in India include grocery stores, mobile and electronics shops, clothing and fashion outlets, pharmacy stores, and cosmetic or beauty product shops. These have high demand, fast-moving products, and good profit margins, making them great options for new business owners.
Which are the licenses required to open a retail store in India?
To open a retail store in India, you need a Shop and Establishment License, GST registration, and a Trade License. Depending on your products, you may also need a FSSAI license (for food) or a Drug License (for medicines).
What are the steps to register a retail business in India?
The steps to register the retail business in India are as follows:
- Market Research
- Business Plan
- Legal Structure and Registration
- Location and Space
- Financing
- Inventory Management
- Staffing
- Marketing and Sales
- Point-of-sale (POS) System
- Launch and Evaluate
Original Article
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