Grocery stores have always been a popular business type because you always need your daily necessities whether you are living in the USA or Bangladesh. Statistics say that sales from supermarkets and different grocery stores were about $742 billion in 2020, which was around 86% of the US beverage and food retail market. Are you thinking of starting a grocery business or currently running one? No worries, we will discuss how to start and maintain a grocery business in Bangladesh here.
Here are Some Benefits of Opening a Grocery Store in a Small Town
You have the option to open a grocery store at any suitable place. But if you open it in a small town or rural area, you will get the following benefits:
- Make more profits from it because usually there are few grocery stores in small towns. The prices of the commodities are usually high in small towns than in cities because of their distance from their distributors.
- Provide jobs to some people and focus more on maintaining the accounts and how to make new business plans or attract more customers.
- Contribute to the local tax revenue from the store’s sales.
- Your grocery store will help attract new residents to the small town. Thus, you will contribute to making that place a suitable place for living.
- Give the local people a reliable store or place to shop.
Checklist of opening a Small Grocery Shop
Just have a look at the following and then you will get the idea about how to go further with your dream of starting a grocery store.
Business Road Map
You need to have a business road map. It will contain all the plans of action and resources, reviewing financial and regulatory incentives, technical assistance, marketing initiatives, and the capital for business development. Like you will get all the answers to your questions like:
- What license do I need to open a grocery store?
- How much money do I need to open a grocery store?
- Where can I get a business loan for a small business at the lowest cost?
- How profitable is a grocery store?
- How do I start a successful grocery business?
- How to start a small grocery shop?
- Do grocery stores make a lot of profit?
- How to maintain a grocery shop? And many more.
This road map will help you to go ahead with your dream of opening a small grocery store.
Location is a Big-Fact
Location means a lot for sure for a business whether it be a book store or grocery store. Choose the location of your small store carefully. Try to take the following things into consideration:
- Demographics:
Have an exact study of the people living in the area you are thinking of starting your store. For example, their number, their occupation, probable income, buying habits, and average vehicle or foot traffic.
- Vicinity:
Think of your customers first as a businessman. Consider choosing a location that will be closer to the residing places of your target customers.
- Area:
Choose the area wisely so that the surrounding geographical area can support the business. Have a study on how far can people walk in your vicinity to go to a shop. For example, People will have on average a 10-minute walk to go to a grocery shop, consider taking that place as the location.
- Competition:
If you select an area where you have no other competitors will let you enjoy a monopoly. But competition is not always bad. Because if you see other such stores in your chosen area, it indicates that the area has a favorable business condition. You will also get the option to come up with varied product items than what others are offering, and reap the benefit from that.
- Traffic:
Pick up a store location such as near a school, bank, petrol pump, or hospital that will draw more traffic throughout the whole day. In other words, a location where anyone can come on foot or by car to get some items. Visit different locations to get ideas before finalizing one.
- Noticeability:
It’s an important issue for sure because many shoppers shop for their daily necessities from a grocery store that comes on their path. Your store needs to be visible. The people should be able to see it easily while passing on with their daily activities.
- Easily Reachable:
Choose a location that is near a road so that customers can both walk and drive there conveniently. If your shop is near the main road with ample traffic, you are golden.
- Surrounding Neighborhood
Go for a location that doesn’t have any unwanted activity in its neighborhood otherwise your shop’s reputation will get spoiled. Choose a peaceful and supportive neighborhood that will be favorable to your business.
Market Research
No matter whatever business you are thinking of doing, have the exact market research to get the desired result out of it. Opening a grocery shop is not an exception to it. Try to cover the things mentioned below to have the right market research.
- Recognize the target market:
Recognize who can be your potential consumers. Consider their needs, demographics, preferences, and avoidances in their surrounding area to have an understanding of their exact needs and spending patterns.
- Understand the behavior of that target market:
Understand the behavior i.e. way of spending and likings of your potential customers. Prepare more specific and targeted marketing plans that can relate to your consumers by having an exact understanding of their behaviors and preferences.
- Analyze consumption, as well as, the situation of the market:
Examine the employment statistics and spending statistics to assess the demand for the grocery shop and the situation of the current market. The motive is to find a niche where there is high demand, yet the market is still not saturated.
- Figure out the competition:
Try to understand the activities of your competitors so that you will be able to give a better or different experience. Find out how the messaging and marketing strategies are working out for them or failing. Apply secondary research and have a look at your competitors’ offline and online properties to get a better understanding of your competition.
- Find out your UVP or Unique Value Proposition:
You have the option to give a competitive or differentiated experience for grocery shopping even in a market that is saturated. Suppose, you can offer different product lines from your local competitors. Or you can give a delivery service for free within a specific area. If you have a huge local competition, identify a minimum of one way you can be different and try to plan the marketing strategy focusing on those differentials.
You can get an improved idea of whether your grocery business can fulfill your target market’s needs after you have performed the above research. If you are still not clear about certain things, consider employing a survey to have clarification.
Select a Remembering Name
A remembering name can play a vital role in the minds of your customers. If you can choose a different and unique name for your business, your customers will remember it for sure. Consider following the tips mentioned below to get some idea:
- Try One-word Name:
A one-word name will be an ideal choice for you in this era of social media where your attention gets distracted by watching different stuff on social media. Customers will be able to remember your store name easily. Think of a sweet and small name that customers can relate to your business such as Shopsy, FoodDeck, Freshado, and the like.
Try finding ideas on Google by typing related words such as food, fresh, grocery, and store that are related to the grocery industry. You will get some nice ideas. Also, try answering simple questions to yourself like who are your customers? What are their needs? How can you be different from your competitors and the like?
Thus, you will get some fresh ideas for your one-word name.
- Try Rhyming Name:
Rhyming names will draw two different words together with the magic of rhymings like Funky Foods, Ocean Organic, Natural Nirvana, and the like. It will create a different impact on your customers’ minds and they will remember it. When finding a rhyming name for your store in Google try typing half-rhymes, full rhymes, and the like. Or, simply try a name generator for your grocery business online.
- Go for Imagery Names:
Imagery names can create an image in your customers’ minds that they will be forced to remember your store name. Try thinking of words like Earth, flame, storm, and come up with names like Earth Foods, Flame Fresh, Storm Supermarket, and the like. Think of the root words, the experience or feeling you like to create for your customers in the shop, and then go for the naming task. Several online name generator tools are available for this purpose.
- Think Local:
Are you trying to create a personalized and unique name for your grocery business? Then, think local. Try to relate to your local customers, and name your store after the location. Like Dhaka Deck, Gulshan Grocery, Salimullah Store, and the like.
Whatever name you are choosing for your grocery store, make sure that relates to your niche, target customers, and business goal. Several name generators for grocery stores are available online, and just use them to get better ideas.
Legal documents/ Licenses
You will need the following legal documents or licenses to start your grocery store:
- Name Clearance Certificate:
You can check whether the name you have picked up for your store has already been chosen by another business or not. This system has been computerized since 2003. After you have found that your chosen name is unique, go to the website of RJSC or Registrar of Joint Stock Companies and Firms and apply for the name clearance certificate online. It will take no longer than one business day to get the confirmation.
After your application has been accepted, your chosen name will have a reservation for six months. It will cost you around BDT 600. Print out this clearance certificate and keep it together with other required documents for incorporation. You need to submit all these to RJSC.
- Memorandum of Association (MOA):
This document regulates your company’s external activities and complements your company’s articles of association.
- Articles of Association (AA):
It specifies your business’s functions and defines the purpose of your business. Precisely, it covers your business’s internal constitution.
- Payment Proof for Treasury Stamps:
Ensure that you have paid the payment for stamp duty to the local treasury account of your designated bank. This fee is BDT 2,500 if your authorized share capital is up to BDT 1,000,000. It includes BDT 500 for MOA stamps and BDT 2000 to attach stamps on AA.
- Form 1 (Declaration on the registration of the company)
- Form 6 (Notice of the registered office)
- Form 9 (Consent to act as directors)
- Form 10 (A list of people who consent to act as directors)
- Form 12 (A particulars of Directors, Managing Agents, and Managers)
- Tax ID Number (TIN):
You need to go for tax registration at the Zonal Taxation Department, Deputy Commission of Taxes of Company Circle before you officially open your grocery store and begin your business. It’s under the NBR (National Board of Revenue) and you will get a unique Tax ID number from there. It won’t cost you a single penny and takes four days.
- Company Seal:
It will take around one day and cost you around BDT 50.
- Trade License:
Get the trade license for your store from the City Corporation. File the application at your closest City Corporation either North Zone or South Zone. It will cost you BDT 5000 and take around 3 days.
Attach the following documents with your trade license application:
– The registered office’s lease agreement copy
– Your TIN certificate
– Your certificate of incorporation
– Your articles and memorandum of association’s certified copy
- VAT Registration:
Register with the VAT, Excise, and Custom Commission under the NBR. Excise, VAT, and Customs Department of the certain region in which your business is located regulate your shop’s VAT. It will take three days to complete the formalities and will cost you nothing.
Start Grocery Business Following These Steps:
Follow the steps mentioned below and start the journey of your dream. Step-1: Pick up the suitable store name. Step-2: Keep yourself well aware of the business laws and regulations of Bangladesh. Prepare all the legal documents/licenses as mentioned above. Step-3: Go to your designated bank and then pay the fee for stamp duty as mentioned above. Step-4: Submit all registration details to RJSC (Registrar of Joint Stock Companies and Firms) This step will take one day to complete and cost you around BDT 1,200 as a fee for registration filing and around BDT 3,645 as registration fees. Submit the following documents to complete the registration of your store: Memorandum and Article of association Payment proof for treasury stamps from your designated bank. Certificate for name clearance Form 1 (Declaration on the registration of the company) Form 6 (Notice of the registered office) Form 9 (Consent to act as directors) Form 10 (A list of people who consent to act as directors) Form 12 (A particulars of Directors, Managing Agents, and Managers)
Step-5: Get your TIN as mentioned above.
Step-6: Create your company seal.
Step-7: Get your trade license as mentioned above.
Step-8: Complete your VAT registration as discussed above.
Here you will find How to Maintain a Grocery Shop in Bangladesh
Now, let’s focus on the maintenance of your grocery shop in Bangladesh and the ways to increase profit for the grocery shop you should know about badly nowadays in 2023. Because the profit margins of grocery stores are much less compared to other businesses.
Get the top tips to maintain a grocery shop in BD / The best ways to increase profit for grocery shop:
Keep all your legal documents and license updated:
This will help you run your business smoothly without any legal issues in Bangladesh. Many shop owners avoid these things and face different legal issues in the long run.
Keep yourself well aware of the business laws and regulations of Bangladesh:
This will also help you maintain your grocery store without facing any legal issues. No matter whatever business you are running, you need to be well aware of the business laws and regulations of the country in which you are running the business.
Develop personalized messages for your customers:
If you have a business for a particular community or local neighborhood, you can take the advantage of developing personalized messages and adding special product lines for the customers who have great chances to visit your store. It means, considering adding local flavors, shopping habits, and preferences while filling up your shelves.
Include some unique experiences:
Try to add some unique experiences to your independent store if you want to increase the number of your relevant consumers. Suppose, consider adding a tea or coffee shop, offering product samples for free daily, a restaurant to have some food before shopping for their daily necessities, and the like.
Tell the stories behind the products:
Local consumers will appreciate it when they will get their food items from local producers or farms. But only adding local products on the shelves will not work for you. Add the stories behind the products and also the producers of those products.
Educate your employees about your products:
Your salespeople need to have the exact knowledge about your products so that they can help the shoppers in making their buying decisions. Sometimes, your customers will prefer a mortar store over an online store only to get help for making their purchasing decisions.
Think mobile:
Nowadays, people are more prone to using their phones wherever they are going. So, consider developing an app for your store from where customers can place online orders, get discounts, coupons, special offers, a summary of all the items of your store, and the like.
Use creative application of deals and coupons:
It’s a bit tough for your independent store to outperform big superstores depending only on price. Consider offering special offers, and coupons through mobile devices or email to offer an improved value to your customers on certain product types.
Restructure the conventional store layout:
Try to think a bit differently from the conventional store owners. If you focus on a special niche, try to make that item easy to find for their customers.
Make some options online:
You are becoming more online or digital nowadays. So, make some options online for your clients to get more sales.
Utilize the Gig Economy:
The gig economy lets employers hire employees on a contractual basis for a specified time period and get the maximum benefits from them within that period. You can apply this to your grocery stores too and thus, you don’t have to hire tons of permanent employees and spend a lot to pay those employees.
Be personal service focused
Focus on your personal services deeply so that you become an expert in your field. Educate your employees about your products and services so that they can offer the best service to your customers.
Bonus Tips
Promote your business online
Now you are living in the era of technological advancements. With this technological advancement, online presence has become an important part of our life. So, it’s time to go online for your business as online users are increasing massively! Promote your business on the following popular social media platforms:
Facebook: Create a Facebook page for your business, and invite people to like the page. Give regular posts to keep people aware of your products, services, special offers, discounts, and so on.
Messenger: Personally inform about your different offers, discounts, special products, and services to your regular customers through messenger.
Instagram: Create an Instagram account for your store and promote your business through regular posts.
Twitter: Create your business’s Twitter account and make online promotions.
YouTube: Consider creating a YouTube channel and promote your business through interesting videos.
Become Smart in maintaining all your business accounts
Keep all your business transactions at your fingertips by using our smart app HishabPati . It comes with an easy interface, and auto-sync feature, and is available for mobile, desktop, or laptop. Enjoy the following awesome features:
- Unlimited Product: Add as many products as you have.
- Parties: Access your customer and supplier contacts anytime according to your convenience.
- Purchase and Sales: Manage your purchase and sales transactions and a lot more.
- Expenses: Record your expenses category-wise separately.
- Reports: Generate and view different weekly, monthly and yearly reports. Group them by items, and parties. Export them in PDF or Excel and share them easily.
- Settings: Easily manage the app and its different components. You need no advanced knowledge.
- Pricing Plans: Available in three variants:
Ø Basic – Free
Ø Premium – Monthly fee is only Tk 99
Ø Business- Monthly fee is only Tk 199
This amazing app will not only save you time, but also help you keep perfect accounts and help your business grow with infinite potential.
Final Words:
Now, you must be clear about how to start and maintain a grocery business in Bangladesh and other relevant details. So, start your business with a bang or run your business successfully if you already own a grocery store. Cheers!!!
