Everything He Wished He Had Known Before Signing the Lease

Most new shops fail on decisions made before opening day — location, capital split and stock mix. Here is the order to make them in.

Ajay opened a general store in a growing suburb of Pune with ₹6 lakh. Fourteen months later he was still trading, which puts him ahead of a lot of new shops, but he had made three decisions before opening day that cost him most of his first year.

All three were made in the wrong order.

Decide Location Last, Not First

The near-universal mistake. A shop is found, it seems reasonable, the lease is signed, and every other decision is then constrained by a choice made on instinct.

What matters about a location is mostly measurable, and it is worth measuring before committing.

• Count actual footfall at three different times of day, on two different days
• Note how many competing shops are within a five-minute walk, and what they do badly
• Check whether the immediate catchment is residential, and roughly how many households
• Establish parking and two-wheeler access, which matters more than frontage width
• Ask what the previous occupant was and why they left — the answer is often informative

I chose the shop because the rent was good. Everything hard about the next year came from that.

Split the Capital Before You Spend Any of It

Ajay put roughly 70% of his capital into opening stock and fit-out, which felt responsible and left him unable to absorb two slow months.

A workable split for a small general store looks closer to this.

• Opening stock: about 45-50%
• Fit-out, shelving and refrigeration: about 20-25%
• Deposit and initial rent: as required, but count it separately
• Working capital reserve: at least 20%, untouched
• Licences, signage and setup: the remainder

The reserve is the part everyone raids and nobody should. A new shop takes months to find its demand pattern, and the reserve is what buys the time to learn it.

Registrations and Licences

Requirements vary by state and by what you sell, so confirm locally — but this is the usual shape.

• Shop and Establishment registration with the local authority
• GST registration, mandatory above the turnover threshold for goods and often useful below it
• FSSAI registration or licence if you sell any food, including packaged food
• A trade licence from the municipal body, where applicable
• A separate current account in the business name, which is not a licence but should be treated as mandatory

Not because it is required, but because a shop that never separated its money cannot prove its turnover later. Every future loan application, and every accurate profit figure, depends on a separation that costs nothing to start and is nearly impossible to reconstruct retrospectively.

Opening Stock: Narrow, Then Widen

New owners consistently over-range and under-depth: a little of everything, not enough of anything. It looks like a well-stocked shop and trades like a badly stocked one.

• Start with 250-400 products, not 900
• Carry real depth on staples people come specifically for
• Add range in response to what customers actually ask for, not in anticipation
• Keep a list of every request you cannot fulfil from week one
• Expect to be wrong about a third of your initial range

That request list is the most valuable document of your first three months. It tells you what to stock next with far more accuracy than any guess made before opening.

Set the Systems Up Before the Rush, Not After

It is far easier to start with clean records than to impose them on a shop already trading on memory.

• Record every sale from day one, including the small ones
• Enter cost price alongside selling price, so margin is visible from the start
• Keep personal and shop money separate, without exception
• Set a fixed till float and reconcile daily
• Record supplier prices from the first invoice, so you have a history when it matters

Arali is designed to be set up in an afternoon and to grow with the catalogue rather than requiring it upfront. Of everything on this list, though, the two decisions that matter most cost nothing: separating the money, and writing down what customers asked for that you did not have.

Frequently asked questions

What licences do I need to open a kirana store in India?

Typically Shop and Establishment registration with the local authority, GST registration above the turnover threshold, FSSAI registration or licence if you sell any food including packaged items, and a municipal trade licence where applicable. Requirements vary by state and by what you sell, so confirm locally before opening.

How should I split my capital when opening a shop?

Roughly 45-50% into opening stock, 20-25% into fit-out and refrigeration, deposit and rent counted separately, and at least 20% held as an untouched working capital reserve. The reserve is what everyone raids and nobody should — a new shop takes months to find its demand pattern, and the reserve buys time to learn it.

How many products should a new shop stock initially?

250-400, not 900. New owners consistently over-range and under-depth — a little of everything and not enough of anything, which looks well stocked and trades badly. Carry real depth on staples people come specifically for, and add range in response to actual customer requests rather than in anticipation.

What should I set up on day one of a new shop?

A separate business bank account, sales recorded from the first day including small ones, cost price entered alongside selling price so margin is visible, a fixed till float reconciled daily, and supplier prices recorded from the first invoice. Clean records are far easier to start than to impose on a shop already trading on memory.