1. How much capital you will need
A small shop of 200 to 300 sq.ft: ₹3-5 lakh of stock, about ₹1 lakh for furniture and racking, and two to three months' rent in advance. A medium shop that also carries building material: ₹10-15 lakh. Most of the money goes into stock, so start with the 300 to 500 fastest-moving items and widen the range gradually.
2. Licences and registrations
A Shop and Establishment licence from the municipal corporation; GST registration, compulsory above ₹40 lakh turnover but worth taking earlier if contractors want B2B invoices; free Udyam (MSME) registration, which helps with loans and tenders; and a current account at your bank.
3. What to stock first
The daily sellers: screws, hinges, nuts and bolts, PVC pipe and fittings, brushes and rollers, locks and latches, rope and tarpaulin, hand tools, and basic electrical goods such as wire, switches and holders. Then stock by season — tarpaulin and pipe before the monsoon, paint through the wedding months. Buy on credit from your supplier rather than in cash.
4. Where to buy from
Start with the wholesalers in your city's hardware market — Bahadurpur in Patna, Chawri Bazar in Delhi, Burrabazar in Kolkata. Use two or three suppliers at first and compare them. Company distributors such as Havells, Finolex and Astral also supply directly at fixed rates, usually on 30 days' credit.
5. Keep the accounts digital from day one
The commonest mistake is running on a register for six months and only then moving to software, by which time the accounts are already in a mess. Take billing software from the first day: every bill with GST, every item with a stock figure, every customer with a credit balance. MaterialBill can be started on the free plan, with thousands of items, a 30-second bill and stock alerts.
6. Choosing what to stock first
The temptation at the start is to carry a bit of everything, and it is how new shops tie up their capital in lines that do not move. Begin narrow: fasteners, basic tools, locks and hinges, plumbing and electrical fittings, and whatever the shops around you are visibly short of. Twenty or thirty fast lines will carry most of your early turnover. Add depth where customers actually ask twice for something you did not have — that request is better market research than any supplier's recommendation, and it costs nothing to collect if somebody writes it down.
7. Credit, from the first month
A new hardware shop is offered credit business almost immediately, usually by a contractor or an electrician who is testing whether you will say yes. Decide your policy before that conversation rather than during it: who gets credit, how much, and for how long. Set a limit against every party from the start, even a low one, because raising a limit later is easy and pulling one back is not. The shops that get into trouble are almost never the ones that refused too much early on.