1. Decide what you will supply
Begin with three or four lines: cement in one or two brands, steel in one brand, and sand and aggregate bought locally. Those four cover around 80% of the demand. Add brick, shuttering, tiles and sanitary ware later. Each line brings its own supplier and its own account.
2. Dealerships and capital
A cement dealership means a security deposit with the company, typically ₹1-5 lakh, plus a minimum monthly lifting commitment. Steel is usually taken from a distributor on credit, and sand and aggregate are bought for cash from the local ghat or crusher. All told you are looking at ₹15-30 lakh to start, covering the godown, a truck or tractor, stock and working capital. Working capital matters most, because your credit cycle is around 60 days.
3. Godown and transport
Take a godown on a main road that a truck can reach, with a dry area for cement, which spoils in damp and should be sold within three months. Owning a tractor or pickup keeps the delivery margin with you; otherwise fix a rate with a hired vehicle and show transport charge separately on the bill.
4. Your contractor network is the real asset
Your customer is not the person building the house but the contractor or mason, because they decide where the material is bought. Build relationships with 20 to 30 contractors, agree their commission per bag or per quintal, and track their credit separately. Once that network is in place, the business runs.
5. Accounts: site-wise delivery and credit
Record every delivery — which site, how much material, which vehicle, on what date — or the customer will claim nothing arrived. Keep a ledger per contractor and builder and send a monthly statement. MaterialBill was built for this trade, with delivery challans, transport charges, size-wise steel, bag-wise cement and the credit ledger all included.
6. Working capital is the real requirement
New entrants budget for the godown, the vehicle and the opening stock, and then discover the number that actually matters: the working capital needed to carry sixty days of credit. If you turn over ten lakh a month and your customers settle in two months, roughly twenty lakh is permanently on the street before you have made a rupee. Plan for that from the start, keep a cash reserve that is not counted as available, and resist growing turnover faster than your capital can carry — because in this trade growth consumes cash rather than producing it.
7. Landed cost, not invoice value
The supplier invoice is not what your stock cost you. Freight, loading, unloading and any shortage on delivery are real, and in bulk material they are a meaningful share of the total. Your selling rate should be set from the landed cost, and a shop pricing off the invoice value alone frequently discovers at year end that its highest-turnover line was also its thinnest. Recording freight against the purchase takes seconds and gives you a cost figure you can actually price from.