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How to Set-up a retail business in Pakistan

With the increase in the unemployment rate in Pakistan, most people focus to start their own business. However, setting up a business is a really difficult and tiresome task. You need a lot of patience to earn your first revenue from the business. In the coming section, we will discuss how can you set-up a retail business in Pakistan.

What is the retail business?

In Pakistan, the term used for retail businesses is ‘Kirana Store’, it is often called the Grocery store. There are many different types of retail businesses ranging from Small Kirana stores to hyper stores. This division is made on the basis of the range of products and on investment. You can start this business from even 500,000 PKR. Revenue depends upon the amount of investment. The more you invest, the more will be the possibility of increasing sales.

Source: aurora magazine Dawn

Investment Required for Retail Business

Investment for retail business is entirely your own choice. You can start this business with Rupees 500,000 But depending upon the sale you can increase your stock. Remember one thing, when the store is full of products there will be greater chances for customer attractions. Full of products means that there must be not a single empty shelf. On average, the investment for this business is around 20,00,000 PKR.

Source: The Finapolis

People often ask about the profit ratio. Well, let me clearly tell you that the profit ratio is not that high. It is from 8% to 15%. However, the increasing sale will surely benefit you because the more the sale more will the more profit you obtain. Therefore, it is often said in a grocery business that “focus more on sales than on profit”.

Steps to Setup Retail Business

1. Search for place

The First and the most important part of the setup of this business is to select the appropriate location. If you have enough money to purchase the commercial property it will be the best option as you don’t need to spend on rent. Otherwise, you can take a shop at rent. Well, there are few things that must be kept in mind before selecting the location.

  • To check the number of competitors that are located at that location. This is sometimes beneficial as it increases the customer’s flow we will talk about this in later sections.
  • Check the number of houses and the purchasing power of the people living in those houses. You can take an idea by looking at their homes, cars, and outlook.
  • Assess your target market.
  • There must be the availability of Parking space in front of your store.
  • The size of the shop must depend on the area. Let us take an example if we try to open a store in Defence the size of the shop must be at least 8 Marla.
  • Prefer the front location or the most easily accessible location for your store.

2. Market Survey

To survey the market is the second most important step. In this, we perform a detailed survey. For example, if we are opening a store in Defense we will obviously look at the market. We will observe the number and types of shops in that commercial market. In this way, we can also target other shops and offices. Like, restaurants and offices also purchase different edible products. They can benefit us a lot.

3. Observe the competitors

Observation of the competitors is the most important and difficult task. For this, you should at least have basic idea products. Try to observe their empty and stacked shelves. From this, you will come to know which products are producing more sales. Similarly, by doing this you can also reduce your dead products. You may have to observe the competitors for a long time even after you have set up your store. Also, try to maintain a friendly environment with your competitors.

Source: thebusinesplanner.co.nz

4. Purchase assets

Start purchasing your assets once you have selected a place. This may include Shelves, Counter, Computer System(If you needed one), Chairs, and Point of Sale System. I would recommend you to purchase a computer system as it will give you detailed information regarding sale and purchase. Moreover, it will help you in maintaining inventory.

Point of Sale System

5. Purchase Goods

After completion of the aforementioned tasks, this is the time to purchase goods you can sell. This is the most crucial time. You have to struggle a lot. There are two main methods through which you can purchase goods. First, you can purchase from the company. The second method is that you can purchase from the wholesaler. There are certain merits and demerits in both methods. The wholesaler will give you a good percentage of profit but in case of expiry, you can bear a big loss. Similarly, the company will provide your goods in less percentage but in case of expiry, the company will bear that loss.

Source: Score.org

Well with respect to the quantity. As mentioned earlier, you have to observe the competitors. Generally, daily usage products should be in more quantity. In Pakistan, imported products are least preferred by the customers. However, those products can generate a good revenue for you. These can only be founded at wholesalers, like the Shah Alam market in Lahore.

6. Maintain inventory

Maintaining inventory is also one of the most important things. You must update your point of sale system as you make a purchase. In addition to this, You have to audit your shop every month. This will also help you in understanding which products are selling at fast speed. Please note that, if the customer won’t find a single product he may not purchase other products as well.  Also note that, procure the products in starting for at least a week. you will have idea about this within a few months.

Read Also: Home-Based Business in Pakistan

7. Observe Cashflow and separating cash

Observing cashflow is the most important task. It will tell you how much is lose and how much is profit. In addition to this, the cash flow will also tell you how much money do u have for daily purchasing.

Well, this is a little trick. Separate the sale on a daily basis. Remove the profit from that cash. This will help you in expenditures like electric bills, salaries, fees, and rent.


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A content writer with a background in computer science. I am keen and dedicated to learning new things



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