Grocery Shop Business Plan: Meaning, Benefits, and How To Start

Learn how to start a grocery store business in 7 steps! From planning to branding, secure funding with Bajaj Finserv.
Business Loan
3 min
31 July 2025

Starting a grocery store can be a great and rewarding business, giving you the chance to serve your local community while meeting the steady demand for everyday products. This simple guide explains what a grocery store is, how it is different from a supermarket, and the key steps to start your own store successfully. We’ll cover important points like researching the market, choosing the right location, following legal rules, making a business plan, managing stock, and arranging finance. Whether you are new to business or want to try something new, this guide offers practical advice to help you understand the grocery business, its benefits, and how to grow it.

What is a grocery store?

A grocery store is a small local shop that sells mainly groceries and household items. These stores are usually family-run and often passed down through generations. The size and style of a grocery store can change depending on the customers, location, and nearby competition. Sometimes, a grocery store can grow into a bigger shop called a supermarket, if it follows a proper business plan and works hard.

Though grocery stores are different from other retail shops, supermarkets are the closest type of business to them. There are five main differences between grocery stores and supermarkets that you should know to understand the grocery business fully. If you want to start a grocery business, it is very important to create a detailed business plan to handle the unique challenges and opportunities in India.

Major differences between a grocery store and a supermarket

While both sell food and household items, there are differences between a grocery store and a supermarket:

  • Size: Grocery stores are smaller and focus mainly on food items, while supermarkets are larger and offer a wider range of products, including non-food items.
  • Selection: Supermarkets have more variety and brands available compared to grocery stores.
  • Pricing: Generally, grocery stores may have slightly higher prices compared to supermarkets due to their smaller scale and limited offerings.

How to start a grocery store business in 7 easy steps?

Starting a grocery store involves several steps:

  • Market research: Understand your target customers and their needs.
  • Create a business plan: Detail your business goals, target market, and financial projections.
  • Secure funding: Explore options like Bajaj Finserv Business Loan to finance your venture.
  • Find a suitable location: Choose a spot with high foot traffic and easy access for customers. You can also check your pre-approved business loan offer for instant access to funding with minimal documentation.
  • Source suppliers: Establish relationships with wholesalers or local producers for your inventory.
  • Obtain necessary permits and licenses: Ensure legal compliance with local regulations.
  • Set up your store: Purchase equipment, stock shelves, and create an attractive layout.

1. Prepare a proper business plan for your grocery store

A well-thought-out business plan is crucial for the success of your grocery store. Here are some key points to include:

  • Executive summary: Overview of your business concept and goals.
  • Market analysis: Research on the local market, competitors, and target customers.
  • Business structure: Decide whether you'll operate as a sole proprietorship, partnership, or corporation.
  • Products and services: Detail the range of items you'll offer and any additional services, such as delivery or special orders.
  • Marketing and sales strategy: Outline how you'll attract and retain customers, including advertising and promotions.
  • Financial projections: Estimate your startup costs, monthly expenses, and expected revenue.

2. Select right location

Choosing the right location is crucial for the success of your grocery store. Consider factors like:

  • Foot traffic: Look for areas with high pedestrian activity.
  • Accessibility: Ensure easy access for customers, including parking facilities.
  • Competition: Evaluate nearby stores and assess their offerings and pricing.
  • Demographics: Understand the demographics of the area, including income levels and shopping habits.

3. Legal compliance and registration

Before opening your grocery store, make sure to:

  • Register your business with the appropriate authorities.
  • Obtain licenses and permits required for operating a retail food establishment.
  • Comply with health and safety regulations, including food handling and storage standards.

4. Renting or owning the space

Decide whether to rent or buy the space for your grocery store. Consider factors like:

  • Financial resources: Evaluate your budget and long-term financial goals.
  • Flexibility: Leasing offers more flexibility while owning provides stability and potential equity.
  • Location: Determine whether the available properties meet your requirements for size, layout, and accessibility.

5. Proper equipment

Equip your grocery store with essential items such as:

  • Refrigeration units: For storing perishable items like fruits, vegetables, and dairy products.
  • Shelving and displays: To organize and showcase your merchandise effectively.
  • Cash registers and POS systems: For processing transactions and managing inventory.
  • Cleaning supplies: To maintain hygiene and sanitation standards.

6. Defining the brand

Create a strong brand identity for your grocery store by:

  • Choosing a memorable name and logo.
  • Developing a unique selling proposition that sets you apart from competitors.
  • Providing excellent customer service and building relationships with your community.

7. Costs of opening a grocery store

Opening a grocery store involves various costs, including:

  • Rent or purchase of commercial space.
  • Inventory purchases.
  • Equipment and fixtures.
  • Licensing and permits.
  • Marketing and promotional expenses.
  • Employee wages and benefits.

Benefits of grocery store business

Low Investment

You can begin with a small number of products and minimal resources. A small space with a well-planned setup helps you grow your business step by step.

Easy Supply Chain Management

With fewer suppliers and simpler operations, you can manage your supply chain easily. Using supply chain software can give you full control from one place.

Better Inventory Control

Since grocery stores stock fewer items within easy reach, it’s simpler to keep track of stock. Inventory management software can help you organise it efficiently.

Serve More Customers Quickly

With products arranged well, staff can find items fast and serve customers quickly. Cashiers can process bills faster, helping you attend to more customers.

Freedom to Innovate

Unlike supermarkets, you can arrange products to suit your customers’ preferences and improve their shopping experience. You can update your business plan regularly and make quick decisions to meet your goals.

Better Return on Investment (ROI)

Even though each sale might be smaller than in supermarkets, lower costs and investments mean you can earn good profits. Serving more customers daily with minimal staff helps you get a better ROI.

Fulfil your dream of starting a grocery business with Bajaj Finserv Business Loan

Choosing the right financial partner is crucial when it comes to starting a new business venture like a grocery store. This is where Bajaj Finserv Business Loan stands out as the perfect financing solution. Bajaj Finserv Business Loan comes with a host of benefits such as affordable business loan interest rates, flexible repayment options, and easy eligibility criteria. By providing access to capital, Bajaj Finserv Business Loan enables you to cover expenses such as leasing or purchasing property, stocking inventory, and covering operational costs in a hassle-free manner.

Applying for Bajaj Finserv Business Loan is quick, easy, and completely digital, which means that you can get funding quickly and focus on growing your business. Choose Bajaj Finserv Business Loan as your financing partner and make your entrepreneurial dreams a reality.

Disclaimer

1. Bajaj Finance Limited (“BFL”) is a Non-Banking Finance Company (NBFC) and Prepaid Payment Instrument Issuer offering financial services viz., loans, deposits, Bajaj Pay Wallet, Bajaj Pay UPI, bill payments and third-party wealth management products. The details mentioned in the respective product/ service document shall prevail in case of any inconsistency with respect to the information referring to BFL products and services on this page.

2. All other information, such as, the images, facts, statistics etc. (“information”) that are in addition to the details mentioned in the BFL’s product/ service document and which are being displayed on this page only depicts the summary of the information sourced from the public domain. The said information is neither owned by BFL nor it is to the exclusive knowledge of BFL. There may be inadvertent inaccuracies or typographical errors or delays in updating the said information. Hence, users are advised to independently exercise diligence by verifying complete information, including by consulting experts, if any. Users shall be the sole owner of the decision taken, if any, about suitability of the same.

Frequently asked questions

Is a grocery store business profitable?

Yes, due to consistent demand for essential items like food and household goods.

How do I start a grocery store?

Research market, create a business plan, secure funding, find a good location, obtain permits, stock inventory, and market effectively.

How do I write a grocery business plan?

Outline business goals, target market, products, marketing strategy, financial projections, and operational plan.

What is the budget for a grocery store business?

Startup costs vary but cover expenses like rent, equipment, inventory, permits, and marketing, ranging from tens to hundreds of thousands.

What is the 6 to 1 grocery rule?

The 6 to 1 grocery rule is a simple guideline used in grocery retail to balance product variety and space. It means that for every six products or items you stock, one should be a fast-moving or best-selling product. This helps store owners focus on stocking popular items that sell quickly while also offering enough variety to attract customers. It’s a way to manage inventory efficiently, reduce waste, and increase profits by prioritising items that customers buy most often.

How much money is needed to start a grocery store?

You can open a grocery store in India with an investment ranging from Rs 10 lakh to Rs 2 crore. The exact amount will depend on factors like the size of your shop, where it’s located, and the variety of items you plan to offer. A small store in a local area will cost less, while a larger one in a prime spot will need more funds.

Show More Show Less