Easy to Implement FMCG Business Model in 2024

In this post you will learn how to create an FMCG business model from scratch.

The Fast-Moving Consumer Goods (FMCG) industry in India has seen tremendous growth over the past few decades. The industry includes a wide range of products such as food and beverages, personal care products, household items, and more. With the rise of the middle class and increased purchasing power, the demand for FMCG products has increased significantly. 

In this article, we will discuss some FMCG business ideas, an FMCG business model, and how to start an FMCG distribution business in India.

A prerequisite for becoming an entrepreneur

Entrepreneurship is not easy nor rocket science, there are some requirements to become an entrepreneur.

• Ability to dream big
• Never giving up tenacity
• The capacity to turn difficulty into opportunity
• Logical, trust, honesty
• Foresightness

You may have observed that many of us who have good management skills, and expertise, and a good business project cannot stand in the business long and had to quit or brings in talent.

Today I will explain (to the point and without making the article a long read) how one should decide and start a business, as said earlier you will also get a business idea in this discussion for better understanding, and if anyone wishes can implement it.

Whatever the business size, the investment is a prerequisite (There is no business that can be started without money) to do a business an entrepreneur must invest money that may be owned or burrowed.

Three things as deciding factors of business success.

Before starting an FMCG business, we should consider three things as deciding factors of success (read more about factors that decide business success)

• Experience (In the domain) and its utilization. (Especially on product aspects)
• Management ability (Financial, people)
• Risk-taking abilities.

For whom am I writing this FMCG business Model?

If you are a business professional with 15/20 years of sales experience and hold a decent bank balance, you can give a thought to doing business (That does not mean others should not, I am just taking a reference to an idealistic scenario).

In such a case, how will you proceed? As you are in your late forties, it is expected you have a family which is by default your priority.

Please remember that we must provide a comfortable life for our family during the entrepreneurial journey, they can be a party to success but not failure.

So, kindly ensure enough money that can support the family to the extent of two years of household expenses.

Please do not expect your business to start giving you enough money from the first day to support your family.

Please note, here I am not proposing an alternative to employment, to do a business means you are creating employment for others. Most importantly you’re being driven by your passion, and you may have to remain out of earnings for at least two years.

Now with the above preconditions, you must measure your financial risk-taking ability, which means you should have the ability to judge the amount of money you can pump in.

The next step is to draw a road map to help you identify the milestones where you will require more money to invest and their potential source.

Some popular consumer goods Business Ideas.

If you’re interested in starting an FMCG business in India, there are plenty of ideas to choose from. Here are some of the most popular FMCG business ideas:

1. Snack Food Business Snack foods such as chips, popcorn, and nuts are always in demand. Starting a snack food business can be a profitable venture. You can choose to sell your snacks online, at local stores, or even set up your own brick-and-mortar store.

2. Organic Food Business With the growing awareness of health and wellness, people are looking for organic and natural food products. Starting an organic food business can be a great way to cater to this market. You can source organic products from local farmers or even start your own farm.

3. Personal Care Products Business Personal care products such as soap, shampoo, and skincare items are always in demand. Starting a personal care products business can be a lucrative venture. You can choose to sell your products online, at local stores, or even set up your own store.

4. Pet Food Business The pet food industry in India is growing rapidly. Starting a pet food business can be a great way to tap into this market. You can choose to sell your products online, at local pet stores, or even set up your own store.

5. Baby Care Products Business Baby care products such as diapers, wipes, and baby food are always in demand. Starting a baby care products business can be a profitable venture. You can choose to sell your products online, at local stores, or even set up your own store.

A model FMCG business road map.

1. You are in your late forties and have a 30 Lakhs bank balance and from other sources 20 Lakhs (PF/Equity etc.)
2. You are an FMCG sales professional and identified a problem area where you think an FMCG business model can have a tradeable solution for that
3. You know the ins and outs of the FMCG business (Operations/Supply Chain/Marketing/People Management/Financial aspects)
4. As a solution to the identified problem you want to establish your own FMCG company.
5. You want to make the business a 100 million revenue company in the next 5 years.
6. You want to bootstrap with rupees 20 Lakhs.
7. You want to start with FMCG products for a specific segment having a distinct addressable population.
8. You want to make prototypes for all lines of products in the next 90 days.
9. You want to start with a single city.
10. After 6 months, you will require Rs 50 Lakhs to expand in the new 5 cities. [Milestones, here onwards you need an investment source]
11. After a year your business will expand to new geographies that will require an additional X-crore investment.
12. After completing 36 months you will hit the break-even point.
13. Within the next 2 years you will expand in the northern/eastern/western/southern part of India.
14. Now you have made a comprehensive project plan.
15. This project is the lifeline of your business, getting plan B and C placed will make it stronger.
16. Add plan B and C.

Steps involved in starting a FMCG business in India.

1. Refer to the budget part made in the project and allocate the budget.
2. Form a company (LLP or PVT LTD are the most two preferred), take all required licenses, registration, and permits from local/state/central govt authority
3. Decide a brand name and apply for a trademark.
4. Contact the best white label manufacturer available in the market and negotiate the rate as per your requirement. Check all legal aspects and carry out an agreement.
5. Plan a strong “Go to Market” (GTM) strategy and a marketing strategy.
6. Prepare or outsource supply chain infrastructure and appoint manpower (Sales/Finance/Commercial/Warehouse/Marcom/Quality) and distribution line.
7. Document all the policies related to people management, Channel management, and financial management (These three are enough for the initial period of the business)
8. Execute the GTM and continue to support the market with the designed marketing strategy.
9. Continuously evaluate opportunities, and challenges and act immediately.

You are now ready with a well-drawn FMCG business model.

Hope you have understood this FMCG business model, and now can start an FMCG distribution business in India. If you want to clarify any points on this FMCG business model you can write to me.

Best of luck!