Types Of Retail Business In India
- Merchandise and service retail
- Store and non-store retail
- Online and offline retail
Advantages Of Opening A Retail Business In India
- A direct connection with customers and the market can help analyse market conditions and future trends, thereby helping in an efficient business planning
- It is easier to expand the customer base without changing the location of the business.
- Retail business can sell more varied products and services compared to manufacturers and wholesalers.
- The option of not having an inventory reduces input costs for retailers. They also do not have any intermediaries, saving the cost of commission. Moreover, they can pass all the burden of cost and tax directly to their customers.
- Providing more options to customers increases their potential for steep and rapid growth.
- As a retailer, you may also manufacture your own goods. This will reduce the cost of the supply chain and help control the quality and price of products. This may also not be difficult as retail businesses already have huge storage facilities and inventory options
- Besides, you may also patent your product.
- Retail businesses heavily influence the marketing aspect of the products and the competition in the industry.
How To Start A Retail Business In India
- Choose your industry: Retail industry offers a variety of options for an owner to set their foot into. The industry you wish to establish your business in must be decided on the basis of its demand in the local market, ease, and cost of accessing a supply chain near the site of operation, competitiveness in the market and industry, and the scope for building a unique business brand in the industry. The location of the business plays a vital role in determining all these parameters. However, the analysis must not be restricted to the current location of the business but must include a wider area based on the future vision of expanding the business.
- Choose your location: The preferred location of the business must have a low cost of living, a huge population of the target audience, a supply chain available at ease and proximity, market size and scope of expansion of the business, market competition, local taste and expenditure on the product sold, the financial status, safety and sanitation of the site of operation, low cost of employment, skilled workforce availability, and property or rental rates.
- Choose your legal status: Setting up retail businesses in India has become quicker and easier than before, owing to the robust legal system in place for the purpose. However, choosing the legal status of your company is still a tedious task owing to its dependence on the scale of operations, capital requirements and the number of owners of the proposed businesses. Only two options are available for a single owner, a proprietorship and a One Person Company. In case the ownerships are held by a small group of people, we recommend either an LLP or a partnership as the business’s legal status. However, if the proposed businesses plan to operate at a larger scale and raise huge investments or funds for the purpose, a private limited status for the company is desirable. Large retail businesses have a Private Limited status, as they have a huge potential to grow, expand and earn high revenues. It is noteworthy that online retail and e-commerce businesses like Blinkit and Big Basket operate as private limited companies, reasonably because such companies are well regulated under the Companies Act 2013. Additionally, they pay lower tax rates and enjoy a quicker and easier process tax of compliance.
- Choose your name: You must choose a name for your business that at least communicates your brand voice and your field of operations. If possible, it must also convey the uniqueness of your product or service. It is important to name your business only after considering the provisions mentioned in Section 4 of the Trademark Act, 1999, which states that a new business’s name must never be the same or deceptively similar to the name of an existing business or trademark.
- Choose a mode of operation (online or offline): To open an online retail business, the rate of digital literacy of the local target audience, and the availability of networks and smart devices must be analyzed before beginning operations.
- Get registered and incorporated: Based on the legal status of your company, you must apply for a certificate of registration from the Registrar of Companies in India. Following the registration of your business, you must apply for its incorporation. Registration is required to receive a license for operating a business at the desired location. On the other hand, an Incorporation makes the business a separate legal entity. Bessie, tax registration, GST registration, ESIC and EPF registrations are also mandatory for starting a retail business in SetIndiaBiz offers a one-stop solution for the registration of all kinds of companies in India. We also provide post-incorporation legal and compliance services.
- Get necessary approvals and licenses like the Shop and Establishment License, business license, resale certificates, hallmarks, licenses for verifying quality and safety standards of products, etc.
- Draft a business or store policy
- Draft a business plan and strategy
- Recruit skilled and experienced employees at an economical cost
- Build an effective and functional customer feedback and grievance channel
- When all is done, launch your business.