Expanding Your Grocery Store with Business Loans in India

Before thinking about the expansion stage, for budding entrepreneurs with a kirana idea, a more relevant question would be how to start a grocery store in India. If you have a plan to start a kirana business, read along!

How to open a grocery store?

Supermarket business ideas if turned into reality efficiently and post starting operated smoothly, can generate great returns. Grocery shops are one of the few businesses which have a consistent footfall and high customer loyalty. These businesses are usually run in a traditional fashion, however with enhanced offering and efficient operation, this can be a profitable venture. Hence, the question shouldn’t be how to start a kirana store but how to efficiently run a grocery business. 

Have a plan in place. The plan should also have details of the smaller picture which will help you operate the business on a daily basis. The critical points that should be on your highest priority are explained below:

1. Funding for your grocery store in India : It is imperative to have funding to start any business. This can be in the form of your own funding or a financing from a financial institution like a bank or NBFC offering loans for kirana. In any case, you should have a cushion because you may end up having a high capital requirement. 
2. Market Research : For an entrepreneur to thrive, they must have solid market research before starting a super market business. Good market research can always help understand various factors that have a tangible effect on the possible success of the business you’re venturing into. Data backed decisions help entrepreneurs see the less obvious.  
3. Licenses and Approvals : As far as licenses are concerned – For starting a kirana business in India, you need to have valid local licenses like fire and safety licenses, business registration licenses, GST (if applicable, it depends upon the turnover), compliance with local rules and regulations set up by the municipal corporation, etc. Also, it is essential to be ethical, and run a legal business.
4. Having infrastructure in place : For any business, it can run only if it has a supporting infrastructure in place. Once you have supermarket ideas in place, and grocery shop investment in place, the next step is to put together the infrastructure required for supermarkets. 
5. Working Capital : Supermart business profit margin is usually high but lack of working capital can have a limiting effect on the earning potential in this line of supermart business. It is essential to have sufficient working capital for a business to operate efficiently. An entrepreneur can opt for a working capital loan as and when required.
6. Finding customers : For any business to scale up, consistently rising revenue is a non-negotiable. Although the supermarket business is a fairly robust one with consistent demand, however the competition is stiff too! The entrepreneur has to figure out a suitable marketing strategy which not only aligns with the business, but also product offering, target customers, and recent trends. Following these patterns can really help increase footfall in the business and drive up revenue. 
7.  Reliable Suppliers : Just like finding more customers is important, it is also imperative to find reliable suppliers for your business. It is essential to have such suppliers who can fulfill your product demands on short notice, have suitable pricing, and are flexible with repayment terms and tenures which are most suitable for your business operations.

Business Loan for Grocery Store

There are times when you want to unshackle and set yourself free from a regular job. The idea of starting your own business from scratch can give a kick like no other thing in this world. Also, the Indian start-up ecosystem is thriving making it the best time to take that leap of faith.

Unlike earlier, you don’t have to wait for years before you decide to quit a regular job for the business.  With the ease in financing and institutions lending business owners, many people are undertaking an entrepreneurial journey. NBFCs and online lenders such as get Lendingkart have also proved to be a boon for those trying to succeed in their businesses.

Pawan Singh, a resident of Delhi, was looking to expand his grocery store business which he started a year back but could not afford due to paucity of funds. However, this year he took that bet and expanded the venture with a quick business loan from Lendingkart. Singh didn’t have to spend much energy and efforts in finding access to capital for the grocery store. He simply checked online and discovered LendingKart was offering business loans for a shorter duration. He went ahead and got the loan sanctioned within a span of four days. Today he takes pride in his grocery store which is in the expansion mode after it added a new bakery section.

Like Singh, you can apply for a quick business loan online at the click of a button. Such quick business loans are easily approved within three to five working days and give the much-needed acceleration to your business.

How to apply for a business loan in Lendingkart?

If you have an established business which has been in operations for more than six months, you are eligible for a loan through Lendingkart. You can also check on other eligibility criteria for a business loan on the website. The online lender offers 50,000 up to 2 crore loans to eligible SMEs which can be used for expansion of your venture. Singh had applied for a Rs 10 lakh loan for which he pays a monthly EMI of around Rs 91K for a duration of 12 months. You also need to have a minimum turnover of 90,000 or more in the three months preceding your loan application. Make sure your business doesn’t fall under the blacklisted/excluded list for SBA finance. Also, check on the physical location of your enterprise as it should not be in the negative location list. In case you are not sure about the category or location, you can directly contact Lendingkart to confirm your eligibility.

How much time does it take for loan approval?

It can happen at the click of a button provided you have the requisite documents. You need to create an online account on the platform and apply for a loan based on your financial information. Once you accept the quote you have to upload documents for final verification. Your business loan through the online platform gets approved within three days unlike banks which might take 8-10 days for approval. The platform has a specific business loan scheme under which a loan can be approved within 59 minutes. The loans are processed faster as the eligibility requirements are not complicated and require minimum documentation. A business owner can skip unnecessary paperwork on the platform which otherwise delays the approval process. You have to pay a processing fee of 2-5% depending on the principal amount.

Do you have to show collateral?

A business loan from Lendingkart will be an unsecured Business loan which does not put your valuable assets at risk. Such a business loan does not have a requirement of any collateral or security. You need not have to stress about developing your capital assets to meet the need of working capital. In fact the loan tenure of minimum one month and maximum 36 months offers a credit relief. Also, if your business faces any temporary problem, you can get the necessary extension for mitigating operational issues if the loan tenure is six months or more.

How often do you pay?

For conventional loans, the repayment tenure and frequency is almost always fixed and hardly ever flexible for the borrowers. With lendingkart, a higher flexibility in choosing both tenure and frequency of repayment is offered. Lenders understand the challenges an entrepreneur may face with running a small scale business, and even with capital infusion it can be hard to maintain healthy working capital while repaying the loan. Moreover, with lendingkart business loans can be repaid monthly or bi-weekly. The EMI options allow you to stagger your installment as per your invoicing and sales cycle Depending on the sales you can choose to repay your business loan much faster with the bi-weekly EMI option.These options can be leveraged by the borrower to ensure efficient utilization of the borrowed funds. Having flexible repayment options can give the lenders headspace to focus on their business operations and repay the borrowing company effortlessly.

Can you maintain a credit score?

A good credit history is the basic requirement if you’re looking for debt funding from a lender. Every lender would assess your credit history to come to a conclusion if you’d be eligible for a loan or not. It is essential for you to maintain a good credit history to be eligible for loan applications. Good credit history may also help you secure favorable loan terms for future loans. An NBFC loan from Lendingkart is the best way to improve your business credit score as it reports loan accounts to all credit bureaus. Moreover, a business loan with Lendingkart is especially beneficial for companies witnessing a recent dip in credit score due to unforeseen market conditions.

There are certain measures that you can take to ensure that your credit score is not taking a hit! First and foremost, always ensure that you’re making your debt repayments on time! All the data regarding number of loans, loan amounts, any outstanding, any default on repayment, delay in repayment (if any) and number of days of delay, etc is readily available to lenders. So any past mishaps in repayment can most definitely affect your future debt applications.

What’s the big deal with the interest rate?

Interest rates are directly proportional to the risks associated with the lending. In simpler terms, higher the risk with lending results with higher interest rates being offered to the borrower. The online lenders have incorporated the latest technology such as big data and machine learning tools to determine the lowest interest rates on business loans. This means the best rate is arrived upon for business loans using technology depending on the case.

No matter what stage of your business you are in, platforms like Lendingkart are available to give wings to your dreams.

Summary

There are multiple ways to start and expand a kirana store business in India. To open a grocery store, the process begins with proper planning, and research, adequate funding, and efficient operations. For budding entrepreneurs, therefore, the attention should not be on just how to open a grocery shop, but also on learning how to run the business productively once established. A detailed business plan should be in place, which should include all the details on the business model, target audience, suppliers, and funding requirements. A proper capital base, whether from the entrepreneurs own capital or debt funding from banks or other financial institutions is necessary. Easy availability of loans in the form of working capital loans, or credit lines can help provide that much cushioning to entrepreneurs to operate the supermarket business effectively and efficiently.

Proper market research is required in order to understand customer preferences, pricing strategies, and competition in the market and the vicinity that can lead to the success of the business. Moreover, starting a grocery business in India requires getting all local licenses, GST registration, and complying with the municipality for proper legal compliance. Once the groundwork is done, there is a need to right-size the physical structure—such as inventory management systems and adequate staffing to scale up.

The other important aspect is to ensure that there is enough working capital in order for it to run the daily operations smoothly and so there is response to variations of demand (both positive and negative) due to externalities. It is essential to come up with proper marketing strategies for attracting the customers, and also essential to find reliable suppliers who can assure on-time delivery of products during high demand phases and are flexible with bills payable during low demand phases. 

Online platforms such as Lendingkart that give fast, without security business loans to entrepreneurs so that entrepreneurs can expand their businesses without any problem of collateral. Because the loans can be prepared fast, they allow flexible repayment options on the basis of cash flow of the business.

Besides this, a good credit history benefits in availing loans at good terms from the lenders in the future. Timely repayment of debts and good utilization of credit (under 30% is recommended) can contribute much towards boosting up a person’s credit score. In a nutshell, with good planning and facilities, an aspiring grocery store owner in India can start and run his business efficiently and generate good profits.