Here's How to Start a FMCG Business

To step into this niche, you can establish a retail store or become a wholesaler or exporter; you can also think of purchasing a FMCG franchise
  • BY Jaspreet Kaur

    Feature Writer, BusinessEx

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  • Jan 04,2021
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  • 11 Mins Read

In the changing times, consumer goods have the highest demand amongst all goods. Owing to which, FMCG industry is thriving irrespective of the current health crisis. In essence, FMCG are products that have less shelf life as compared to other goods and sell quickly. It is a great opportunity for interested industrialists and businessmen. A variety of products such as beverages, packaged food, and beauty products etc are rendered or manufactured in this niche. 

To step into this niche, you can establish a retail store or become a wholesaler or exporter. You can also think of purchasing a FMCG franchise if you have a  considerable amount of capital  for investment. According to IBEF, The retail market in India is estimated to reach $1.1 trillion by 2020 from $ 840 billion in 2017, with modern trade expected to grow at 20-25 per cent per annum, which is likely to boost revenue of FMCG companies. Revenue of the FMCG sector reached INR 3.4 lakh crore in FY18 and is estimated to reach $103.7 billion in 2020. FMCG market is expected to grow at 9-10 per cent in 2020. The rise in rural consumption will drive the FMCG market. It contributes around 36 per cent to the overall FMCG spending. FMCG urban segment witnessed a growth rate of 8 per cent, whereas, rural segment grew at 5 per cent in the quarter ended September 2019.

Before starting your FMCG Business, here are some important things that you should consider. Knowing these things will help establish your business. 

Determine a Sub-Industry 

The FMCG industry comprises various products. To establish a business, you have to identify a sub-niche where you want to deal in. Once you ascertain a niche, you have to determine products in the industry and accordingly, start your business. 

Create a Business Plan 

Before establishing a business, you have to create a business plan. A plan is a business outline and covers all important aspects of the business. It will give a direction and facilitate in managing the business. 

While creating the plan, you have to ensure that the plan includes important things like mode of operation, target customers, marketing plan and business management etc. 

Registering the Business 

Once you begin working as per the business plan, the next step is to get your business registered. Business registration is vital for every business in India. Your business becomes recognised by the Indian government once your business is registered.

For the registration process, you have to submit various documents considering your state government. Since the process is entirely online now, your business can be registered quickly. 

Find a Business Location 

Ascertaining a business location is immensely crucial. It will help leverage your business if your company or store is situated at the right place. To determine the physical space you need for your business, you would have to check your products and business operation.

In the beginning, you are suggested to start a small business as it will involve less risks. However, if you are capable of holding risks, then you can think of starting a large-size business or purchasing a FMCG franchise. To manage inventory, you would also need to lease or rent a warehouse. 

These are important things that you have to consider before starting a FMCG business. Besides this, there can be other additional factors that have to be taken note of. If you know any, then share with us in the comment section below. 

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