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How to Setup Organic Food Store Business in India?

calendar04 Oct, 2021
timeReading Time: 4 Minutes
Organic Food Store Business: Know How to Start it

Organic food is organically grown food items that are cultivated without the use of pesticides and fertilizers. Therefore, organic food refers to a natural food item that offers numerous benefits to human health. Since organic food items are grown without the use of pesticides or chemical fertilizers, it does not pose any health-related risks for humans. 

Natural techniques like green manure are utilized to fertilize agricultural lands and crop rotation in pest control to produce safer food items. Also, since organic food lacks any kind of preservatives, it is relatively fresher than its counterparts. 

Organic farming is also beneficial for the environment since it minimizes pollution, soil erosion, preserves water tables, escalates the fertility of the soil, & uses relatively lower energy. Since organic farming doesn’t involve the utilization of pesticides, it is beneficial for animals, birds, and human beings living closer to the farms. 

Why it is a right to commence Organic Food Store Business in India?

You are taking a prudent decision if you are planning to start your Organic food store. The organic food demand is escalating every passing day. Everyone wishes to live a healthy lifestyle. The ever-rising per capita income allows people to invest ample spending on natural food and green vegetables. An increasing number of organic store food products are coming up all across the nation. The Indian organic food market seems to have a good future, and it is projected to grow 25% in the next three years. Therefore, the scope of the organic farming business is quite good in the country. 

Read our article:FSSAI Registration Fees and Various Aspects

Viable Approach to start Organic Food Store in India

If you intend to set up an organic food store business, it seeks comprehensive planning in terms of marketing and legalities. The place of business also plays a vital role in the success of the Organic food store business. Prefer picking a location that adheres to tremendous potential on account of customer interaction and retention. The sales promotion methods you choose are also vital in determining the store’s success. Following are some critical steps to be fulfilled for starting an organic food store business in India[1]

Viable Approach to start Organic Food Store in India

Identifying a store location

This is a pivotal and also time-consuming step in the process of commencing the organic food store business. As mentioned earlier, location is a decisive factor in the success of the store. You must pick a place of business where the probability of interacting with customer is on the higher side. Also, make sure that the same area is not flooded with numerous competitors.

Securing a store location (documentation)

You may negotiate concessions with the landowner if you are opting for renting space. You may also need to sign a lease agreement. The concessions may be regarding interior expenses, which may include infrastructure, painting, & maintenance. You might have to avail mandatory building permit and would want to obtain services from a certified interior designer.

Apply for Necessary Permits and Licenses 

There are certain legalities that need to be catered to before commencing the store’s operation. These are as follows:  

  • Apply for firm incorporation by selecting one of following business structure in India;
    • LLP (limited Liability Company)
    • Partnership
    • Sole Proprietorship

Company incorporation is a delicate and a time consuming process. Therefore, it is advisable to get in touch with professional firm like Corpbiz.

  • Any entity which aims to commence a food business and administers the preparation and sale of food items needs to secure a food license from the FSSAI (Food safety and standards of India).
  • You must avail store certification from the Organic Trade Association
  • You must enrol your employees with EPF (if the total strength is more than 20) 
  • Next thing you must apply for is the GST registration. As per the GST Act, businesses with an annual turnover of more than 20 lacs need to get register under GST. 
  • Get the PAN from the IT department
  • Open the current bank account in the name of your business. 

Prepare product portfolio

This step is also critical from the business point of view. You have to wisely select organic foods in accordance with the market demand and profit margin. You may also have to underpin a network of reliable organic food distributors after thorough research. You will have to drill down various factors such as credit, pricing, & delivery terms of different distributors.

Underpin Competitive Price Structure for Your Products

Setting apt pricing requires a lot of research and hard work. If you tag your product extremely low price tag, then the profit margin would be compromised, though you may experience the increased sales. Similarly, if the pricing of your product is on the higher side, the sales volume will come down eventually. Therefore, it is vital to underpin a price structure that offers the best fit for a large number of customers.

Hire workforce 

Any business seeks an adequate workforce to complete it day-to-day undertaking. Hence, you need good managers and staff to ensure seamless management of core business functions as sales, finance, stores, marketing, and purchase. You have to take the size of your operations into account to serve such a purpose. 

 Management of Your Store

Since organic food serves as perishable food items, keeping them fresh is a daunting undertaking for any store owner. It is important for the shop owner to intact the quality of the organic foods through the necessary cooling equipment. Security of the store is another prime concern for the business owner. Fencing your store with a couple of CCTV cameras would be a good idea for securing your store against potential criminal activities. Leverage advanced software to optimize your supply chain management and cut out the inefficacies. 

Select Apt Marketing Channel for product promotion

There are various marketing strategies such as advertising, Word of mouth or social media. You can step into the online world by setting up a website. There are offline techniques such as banner and poster advertising which can be extremely beneficial in securing local customers. 

Investment required for Organic Food Store Business

In general, you may need to arrange around ten lacs for starting an organic food store business. The investment sum includes a deposit for a rented space, running expenses for paying salaries & other costs & inventory of organic food products. You may also need to spend some investment on furnishing and interior decoration.

Conclusion

Including an organic food in a diet has become a new normal for Indian people. Although this shift is yet to take a massive leap, but still it adheres to massive growth potential for businesses with moderate risk appetite and minimal investment capabilities. Opening an organic food store at this point in time is certainly a worthwhile decision for any entrepreneur in India. 

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