How to Start an Indian Grocery Store

Start an Indian Grocery Store by following these 10 steps:

1. Plan your Indian Grocery Store
2. Form your Indian Grocery Store into a Legal Entity
3. Register your Indian Grocery Store for Taxes
4. Open a Business Bank Account & Credit Card
5. Set up Accounting for your Indian Grocery Store
6. Get the Necessary Permits & Licenses for your Indian Grocery Store
7. Get Indian Grocery Store Insurance
8. Define your Indian Grocery Store Brand
9. Create your Indian Grocery Store Website
10. Set up your Business Phone System

We have put together this simple guide to starting your Indian Grocery Store. These steps will ensure that your new business is well planned out, registered properly and legally compliant.

Exploring your options? Check out other small business ideas.

STEP 1: Plan your business

A clear plan is essential for success as an entrepreneur. It will help you map out the specifics of your business and discover some unknowns. A few important topics to consider are:

• What will you name your business?
• What are the startup and ongoing costs?
• Who is your target market?
• How much can you charge customers?

Luckily we have done a lot of this research for you.

What will you name your business?

Choosing the right name is very important. Read our detailed guide on how to name your business. We recommend checking if the business name you choose is available as a web domain and securing it early so no one else can take it.

What are the costs involved in opening an Indian Grocery Store?

Opening an Indian grocery store initially requires a significant amount of money. This is because you will need to purchase or lease a building and then stock your inventory. Initial costs may also include equipment, computers, and even websites for those who wish to sell online. These costs can range from $50,000 to $300,000 depending on the size and scale of the business.

What are the ongoing expenses for an Indian Grocery Store?

There are numerous ongoing expenses when operating an Indian grocery store. Most of those come from maintaining the space and purchasing inventory. It can be very difficult to manage inventory loss in a grocery store. If fresh products are not sold in time, that adds significant cost to the business's operations. For that reason, most companies build in specific loss values for their business as a component of ongoing expenses.

Who is the target market?

The target market for an Indian grocery store can be any community in which there is not already one present or demand is growing. In areas with ample cultural diversity, this type of business can thrive.

How does an Indian Grocery Store make money?

An Indian grocery store makes money by selling foods at a higher price than what they paid to purchase them. They typically purchase from distributors in the area and markup prices to profit from customers.

How much can you charge customers?

The cost for products differs by item, of course. One key thing to remember is that you should always price your products based on the cost to purchase them plus a profit margin. Some Indian products may require international shipping and may be harder to find. That can drive up their value considerably. Be sure to price out the competition (both locally and online) to determine the best price point for all of the products you sell.

How much profit can an Indian Grocery Store make?

Profit for an Indian grocery store ranges widely on the products themselves. Each item has a specific profit margin protection ranging from 5% to 25%. Prepared foods may also be a profitable avenue in some areas. The size of the establishment, the local market, and many other factors play a role in the profits a store can expect.

How can you make your business more profitable?

The business may grow in profitability by expanding to offer more Indian cuisine options. Keep in mind that adding in prepared foods may also open the door for catering opportunities and allow for a small food truck or a few seats in the grocery store for consumers to sit and eat. These can add value to many organizations.

STEP 2: Form a legal entity

The most common business structure types are the sole proprietorship, partnership, limited liability company (LLC), and corporation.

Establishing a legal business entity such as an LLC or corporation protects you from being held personally liable if your Indian Grocery Store is sued.

You can form an LLC yourself and pay only the minimal state LLC costs or hire one of the Best LLC Services for a small, additional fee.

STEP 3: Register for taxes

You will need to register for a variety of state and federal taxes before you can open for business.

In order to register for taxes you will need to apply for an EIN. It's really easy and free!

There are specific state taxes that might apply to your business. Learn more about state sales tax and franchise taxes in our state sales tax guides.

STEP 4: Open a business bank account & credit card

Using dedicated business banking and credit accounts is essential for personal asset protection.

When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your business is sued. In business law, this is referred to as piercing your corporate veil.

Open a business bank account

Besides being a requirement when applying for business loans, opening a business bank account:

• Separates your personal assets from your company's assets, which is necessary for personal asset protection.
• Makes accounting and tax filing easier.

Get a business credit card

Getting a business credit card helps you:

• Separate personal and business expenses by putting your business' expenses all in one place.
• Build your company's credit history, which can be useful to raise money later on.

STEP 5: Set up business accounting

Recording your various expenses and sources of income is critical to understanding the financial performance of your business. Keeping accurate and detailed accounts also greatly simplifies your annual tax filing.

Make LLC accounting easy with our LLC Expenses Cheat Sheet.

STEP 6: Obtain necessary permits and licenses

Failure to acquire necessary permits and licenses can result in hefty fines, or even cause your business to be shut down.

STEP 7: Get business insurance

Just as with licenses and permits, your business needs insurance in order to operate safely and lawfully. Business Insurance protects your company’s financial wellbeing in the event of a covered loss.

There are several types of insurance policies created for different types of businesses with different risks. If you’re unsure of the types of risks that your business may face, begin with General Liability Insurance. This is the most common coverage that small businesses need, so it’s a great place to start for your business.

Another notable insurance policy that many businesses need is Workers’ Compensation Insurance. If your business will have employees, it’s a good chance that your state will require you to carry Workers' Compensation Coverage.

Is this Business Right For You?

To thrive in an Indian grocery store business, it is critical to have a solid understanding of both Indian food and culture. Customers who shop here may have generations of Indian heritage and expect to find outstanding quality and a variety of authentic Indian foods available to them. In addition to this, those who work in this business should be familiar with Indian culture and be able to satisfy the needs of their target customers.

What happens during a typical day at an Indian Grocery Store?

As a grocery store owner, you will spend most of your time working with customers. That may include stocking shelves with products, aiding customers to find what they need, and processing sales. Some grocers have food prep in their stores, which may mean there is a lot of work involved in preparing these foods for local carry-out or in-store purchase. Most often, there is clean up and maintenance, product ordering, and customer service to provide daily.

What are some skills and experiences that will help you build a successful Indian Grocery Store?

To own an Indian grocery store, individuals need to have a solid understanding of the culture's food. That means not just understanding local ingredients and Americanized versions but having a solid grasp on authentic foods and hard-to-find ingredients. In addition to this, it is always important to have a strong customer service background and the ability to negotiate good prices for products coming into your location.

What is the growth potential for an Indian Grocery Store?

As more people seek out authentic foods and a wide range of new products for meals, there is more growth potential possible in this industry. People are often seeking foods and spices to make authentic dishes at home.