Major Things to Keep in Mind to Start a Hardware Store Business in India
Want to know how to start a hardware business in India? Here are a few things you must keep in mind to ensure success:
Determine your Target Market
Understanding your target market is vital to setting up a hardware shop business in India. Identify whether your target group are retail consumers, DIY enthusiasts, professional contractors, or all. Determining your target market will help you choose the type of products to keep in the store and how to price them. For instance, homeowners often demand furniture fittings, tools, paints, etc., for DIY projects. On the other hand, contractors need construction materials and industrial-grade tools.
Depending on your store location and customer base, you may stock inventory with tools in different categories like plumbing, agriculture, gardening, machinery, painting, repairs, electrical tools, etc.
Develop a Business Plan
Before setting up a hardware business, you must create a business plan that outlines the shop placement and strategy to thrive. The business plan must include the following components:
Target Customers: Your average customer’s profile, including what they do, the type and grade of tools they demand, etc.
Financial Plan: Your initial investment, expected cash flow, breakeven point, etc.
Location: The location should not have many competitors and should be easily accessible for a lot of footfall.
Marketing Plan: Your business marketing strategy largely depends on whether you open an independent or a franchise store.
Decide Between a Hardware Shop and a Hardware Store Franchise
While setting up a hardware store, you have two options: opening an independent store or a franchise. When you open an independent store, you are liable to handle each step, including establishment, inventory filling, restocking, marketing, etc. On the other hand, if you open a store franchise, you get access to an already popular band with its supply chain and operational model.
One of the most lucrative hardware business ideas is to open a franchise and take advantage of their brand identity by paying them a franchise fee. It is an efficient way to attract customers without compromising your freedom to take business decisions.
Source your Products
Setting up and running a hardware shop is largely all hand and labour tools. Your aim should be to set up a one-stop solution for all hardware needs. The strategy will make your store popular in the locality and give you an edge over competitors. Ensure you have even the tiniest tools so your customers don't need to head elsewhere. However, that may require a lot of capital you can source through a Business Loan for hardware shop from Hero FinCorp. You can keep your inventory brimming with funds from this loan and repay it in EMIs without stressing your finances.
Set up your Hardware Store
After determining your target market, creating a business plan, and sourcing your products, you can establish your hardware shop business. The process involves choosing a store location, organising the products, installing the necessary storage units and shelves, creating displays, etc. You may also need a designer to create your store’s layout with an impressive design and presentation.
Promote your Hardware Shop Business
The marketing strategy largely depends on whether you open an independent store or take a franchise. While a franchise business is already famous and its brand name automatically attracts customers, an independent store will need extra marketing efforts to reach its target audience. That involves creating a web portal, building networks, advertising in local papers, offering discounts, and interacting on social media.
Why Should You Choose Hardware Store Business?
Starting a hardware store is rewarding as you give your customers something they need to solve an immediate issue. As a seller of hardware products, you can enjoy significant industry perks and profits. Moreover, you can be your boss and make decisions to carry out the operations.
To achieve good sales and popularity, shop owners can set up a kiosk for selling hardware products at farmers' markets, craft shows, and local storefronts to build a community and get loyal customers. It is one of the most popular business ideas for hardware shop owners to develop and promote their businesses.
Also, since running a hardware shop involves a lot of physical activity, you will spend all day walking within the shop and performing various tasks, positively impacting your overall health and energy levels.
Major Challenges in Hardware Store Business
The hardware business is one of the most lucrative businesses to set up in India. However, there are challenges you must be ready to face. Immense market competition is one of the significant challenges you will come across. You will find many hardware stores in each Indian locality, confining your new business. You must do something unique in terms of customer service, discounted rates, doorstep service, etc., to attract customers and build trust.
Expensive inventory is another challenge you might face while running a hardware store. You can source expensive items on demand to avoid blocking your capital. On the other hand, you can stock the most demanded items in bulk to save on supplies costs.
Most self-employed individuals with hardware business ideas apply for Business Loans like start-ups to open their shop, purchase inventory and finance other expenses. These unsecured funding options keep you afloat when you run out of money, underestimate the inventory cost, face a cash flow challenge, or overestimate the sales price. However, to be eligible, the applicant should have an experience of up to five years in the similar business.
Required Documents for a Hardware Store Business
The documentation requirements to open a hardware business in India may vary by state. Below, we will talk about the standard requirements that most states demand. Here is a summary of the documents required to open a hardware shop in India:
The business owner's PAN card
Partners' Agreement or Board Resolution
Incorporation company's AOA, MOA, and LLP agreement certificate
Business address proof, like utility bills, lease agreements, etc.
Details of current employees
List of partners or directors with their identification proof and contact details
Steps to Open a Hardware Shop in India
If you believe a hardware business would be your best idea, take the subsequent steps to set up your store. Below are the steps to successfully set up and run a hardware store in India:
Create a Business Plan: Creating a business plan is crucial in setting up a successful business. It helps understand the investment amount required for the shop and formulate an effective marketing strategy to attract customers and boost sales.
Choose a Good Store Location: Opening a hardware store in a prime location helps the business flourish. Pick a place with high customer demand and less competition.
Register: Choose a business name and logo to register your shop and take a unique trademark.
Open a Business Account: Open a dedicated business account to separate your store funds from your personal savings. Managing a Business Loan for hardware shop also becomes easier with this simple step.
Obtain the Required Licenses and Permissions: Receive all the sanctions to comply with the trade regulations and avoid any fines.
Figure Out the Finances: Sufficient funds are fundamental to starting and running any business. After estimating the projected costs, you can borrow a small Business Loan from Hero FinCorp to support the business idea financially.
How can a Business Loan Help you Start a Hardware Shop in India?
Just like angel investors fund start-ups, Business Loans are ideal funding options that make funds easily accessible to support your hardware business setup financially. Here is how it helps you start a hardware shop business in India:
Ample Loan Amount: A generous loan of up to Rs 40 lakh helps you fund various expenses necessary to set up your business.
Competitive Interest Rates: A lower interest rate means a smaller loan cost that does not overburden your personal and business finances.
Flexible Repayment: Choose a repayment tenure of up to 60 months with affordable EMIs to keep your monthly obligations under control.
No Collateral Requirement: Small Business Loans are unsecured that do not require you to pledge an asset as collateral.
No End-Use Restrictions: You can use the loan amount for any business-related expense, including inventory, equipment, store setup, marketing, etc.
Conclusion
If you believe a hardware business is a good idea, use this guide to start a profitable store in India. Depending on your store location and customer demand, you can begin your entrepreneurial journey with a profitable enterprise. Are you falling short of funds? Borrow a Business Loan for hardware shop from Hero FinCorp at attractive interest rates and flexible tenures to get started without consuming your savings.
Frequently Asked Questions
1. How Profitable is the Hardware Business?
The average profit margin in an Indian hardware store is around 10%. However, it may vary based on your store location, customer base, and marketing approach.
2. Is a Hardware Shop a Profitable Business?
Yes, setting up a hardware shop business is profitable, provided you choose the right store location, target your customers correctly, and keep your inventory stocked according to your client's demand.
3. What Types of Business is Hardware?
A hardware store is a retail business that sells hand and power tools, building materials, paints, cleaning products, plumbing supplies, keys and locks, electrical supplies, etc.
4. How Can I Make My Hardware Business Profitable?
You can build a profitable hardware business by creating an effective business plan, researching, choosing a suitable store location, and adopting a robust marketing strategy. Regarding finances, borrow a Business Loan for hardware shop from Hero FinCorp to handle expenses.
