Nowadays own business in boom to Starting a retail and distribution business for milk and dairy products (under the name Sunil Enterprises) in a Tier-3 (C-grade) city can be a profitable venture due to consistent demand for dairy products. However, proper planning regarding legal compliance, infrastructure, licenses, and product selection is essential.
- Business registration & licenses
- Office & storage setup
- Startup costs & funding options
- List of milk & dairy products to sell
- Additional complementary products
- Marketing strategies for local success
Business Model & Scope
A. Business Model
- B2B (Business-to-Business): Supplying milk & dairy products to local shops, hotels, restaurants, sweet shops.
- B2C (Business-to-Customer): Direct retail sales via home delivery or a small store.
- Hybrid Model: Combining wholesale distribution with retail sales.
B. Target Market in a Tier-3 City
- Households (daily milk consumers).
- Local tea stalls, bakeries, sweet shops.
- Schools, hostels, canteens.
- Small restaurants & catering businesses.
Legal Structure & Business Registration
A. Choosing the Right Business Structure
| Option | Pros | Cons | Best For |
| Sole Proprietorship | Easy registration, low cost | Unlimited liability | Small-scale startups |
| Partnership Firm | Shared responsibility | Dispute risks | Family-run businesses |
| LLP (Limited Liability Partnership) | Limited liability | Slightly higher compliance | Medium-scale expansion |
| Private Limited Company | Funding & scalability | Complex compliance | Large-scale operations |
Recommendation: Start as a Sole Proprietorship (low cost) and later convert to LLP/Company if expanding.
B. Registration Process
- Business Name: Register as “Sunil Enterprises” (check availability via MCA Portal).
- PAN & GST Registration (Mandatory if turnover > ₹20 lakhs).
- Udyam Registration (MSME) (For subsidies & loans).
- FSSAI License (Mandatory for food businesses).
Office & Infrastructure Requirements
A. Office Space (100-200 sq. ft.)
- Location: Near a residential or commercial area.
- Basic Setup:
- Small counter for retail sales.
- Storage racks for milk packets & dairy products.
- Refrigeration units (for cold storage).
B. Storage & Cold Chain Requirements
- Milk Storage: Refrigerators (2-4°C) or Bulk Milk Coolers (if procuring from farmers).
- Delivery Vehicles: Bike/cycle with insulated milk carrier (for local delivery).
Mandatory Licenses & Permits
| License/Permit | Issuing Authority | Cost (Approx.) | Renewal |
| FSSAI License (Basic) | Food Safety Dept. | ₹2,000 – ₹3,000 | Annual |
| Shop & Establishment Act | Municipal Corporation | ₹500 – ₹2,000 | Annual |
| GST Registration | GST Portal | Free (if turnover < ₹20L) | Annual Return |
| Trade License | Local Municipality | ₹1,000 – ₹5,000 | Yearly |
| Pollution NOC (if applicable) | State Pollution Board | ₹5,000 – ₹10,000 | 5 Years |
Note: If procuring milk directly from farmers, a Milk Procurement License may be required.
6. Startup Cost Estimation (For Tier-3 City)
| Expense Category | Estimated Cost (₹) |
| Business Registration (PAN, GST, MSME) | ₹1,000 – ₹3,000 |
| FSSAI License & Trade License | ₹5,000 – ₹8,000 |
| Office Rent (1 month advance) | ₹5,000 – ₹10,000 |
| Refrigerators & Storage Equipment | ₹20,000 – ₹50,000 |
| Initial Stock Purchase (Milk & Products) | ₹30,000 – ₹1,00,000 |
| Delivery Vehicle (Bike with Carrier) | ₹20,000 – ₹40,000 |
| Marketing (Signboard, Pamphlets, Ads) | ₹5,000 – ₹15,000 |
| Miscellaneous (Packaging, Staff Salary, etc.) | ₹10,000 – ₹30,000 |
| Total Estimated Investment | ₹1,00,000 – ₹2,50,000 |
Funding Options:
- Personal Savings
- Bank Loan (Under PMEGP Scheme – Up to ₹10L subsidy)
- Small Business Loans (SIDBI, Mudra Loan)
List of Milk & Dairy Products to Sell
A. Primary Milk Products
- Fresh Milk (Cow/Buffalo) (Pouch & Bulk)
- Standardized Toned Milk (Double Toned, Full Cream)
- Flavoured Milk (Chocolate, Strawberry, Kesar)
B. Value-Added Dairy Products
- Curd (Dahi) & Buttermilk (Chaas)
- Paneer (Cottage Cheese) & Tofu
- Ghee & Butter
- Cheese (Processed, Mozzarella, Cheddar)
- Sweetened Condensed Milk (Milkmaid Alternative)
C. By-Products for Additional Revenue
- Milk Powder (For bakeries & confectioneries)
- Khoya (Mawa) (For sweet shops)
- Yogurt & Probiotic Drinks
Additional Supporting Products for Business Growth
To increase revenue streams, consider selling:
- Bakery Items (Bread, Biscuits, Cakes)
- Eggs & Poultry Products (High demand in Tier-3 cities)
- Beverages (Juices, Lassi, Flavoured Drinks)
- Organic Honey & Jams
- Ready-to-Cook Snacks (Vermicelli, Poha, Upma Mix)
Example:
- “Sunil Enterprises” can offer “Milk + Bread + Eggs” combo packs for home delivery.
Marketing & Distribution Strategy for a Tier-3 City
A. Local Branding & Awareness
- Signboard & Shop Branding (Visible location).
- Pamphlet Distribution (Door-to-door in residential areas).
- WhatsApp & SMS Marketing (Daily milk subscription offers).
B. B2B Supply Chain
- Tie-ups with local tea stalls, sweet shops, and hotels.
- Offer bulk discounts (e.g., 5% off on 50+ liters daily).
C. Home Delivery Model
- Subscription-based milk delivery (Monthly/Weekly plans).
- Mobile App (Optional later stage) for order tracking.
Challenges & Growth Opportunities
Challenges:
✔ High Competition (From established dairy brands).
✔ Perishability Risk (Milk spoilage if not stored properly).
✔ Working Capital Management (Daily procurement & payments).
Growth Opportunities:
✔ Private Labeling (Sell under “Sunil Dairy” brand).
✔ Diversification (Adding bakery, eggs, or organic products).
✔ Government Schemes (Subsidies for cold storage & dairy units).
- Start with home delivery & local shop supply.
Expand into value-added dairy products with own Brand Name through secured by Trademark Registration and learn more information to visit Khabar Darbar