Top 10 Small Business Ideas Under ₹5 Lakh in India

Starting a business in India doesn’t require crores. With ₹5 lakh and a solid idea, you can build a profitable, scalable venture. Success depends on market demand, your expertise, and a strategy that supports growth without heavy reinvestment. 

This guide covers 10 business ideas under ₹5 lakh, complete with setup costs, growth tips, and profit margins to help you make informed decisions. 

Top 10 Small Business Ideas Under ₹5 Lakh in India

Looking for the top small business ideas under ₹5 lakh that can provide you with good returns? Here are the ideas, along with investment ratios, expected returns, and tips for execution. 

1. Cloud Kitchen / Delivery-Only Restaurant

Budget: ₹3–5 lakh

The food delivery industry is growing exponentially, thanks to the growing popularity of Zomato and Swiggy. One of the best business ideas under ₹5 lakh is a cloud kitchen, where you can avoid the cost of a dine-in space and operate out of a small, rented kitchen space. 

Cost Breakdown: 

• Kitchen equipment: ₹1.5–2 lakh 
• Initial stock of ingredients: ₹50,000–₹80,000 
• Licensing & FSSAI: ₹10,000–₹15,000 
• Menu planning, branding, and photo shoot: ₹20,000–₹30,000 

Execution Strategy: 

• Choose a cuisine that you have good recipes for or is popular in your locality, i.e., Italian, Chinese, Indian, fast food or healthy meal bowls. 
• Invest in attractive packaging. Good packaging improves the overall experience. 
• Start with Zomato and Swiggy first, and then you can either create your own website or app for direct ordering to avoid paying commission charges. 

Scalability: Can easily scale into multiple outlets or franchises if your food preparations become popular. 

Profit Potential: ₹40,000–₹1 lakh/month after 6–8 months. 

2. Customised Gift & Packaging Business 

Budget: ₹1–3 lakh 

Consumers are increasingly realising that personalised gifts hold greater significance than regular gifts. You can tap into this growing demand by selling personalised mugs, gift hampers, and more. Personalised items tend to move faster during festivals, and you can also promote your business for bulk gifting for birthdays and corporate functions. 

Cost Breakdown: 

• Heat press machine & printer: ₹10,000–₹12,000 
• Raw materials: ₹30,000–₹50,000 
• Marketing & website: ₹20,000–₹50,000 

Execution Strategy: 

• Use Instagram reels and Pinterest boards for promotions because visual channels work the best for the marketing of such businesses. 
• Offer ready-to-ship designs for instant sales. 
• Partner with event planners for bulk corporate orders. 

Scalability: Offer more categories such as customised stationery, wedding hampers, or seasonal gifting. 

Profit Potential: ₹25,000–₹70,000/month. 

3. Mobile Repair & Accessories Shop 

Budget: ₹2–4 lakh 

Smartphones are a basic need now, and when they malfunction, people usually want to get them repaired on the same day. Repair services, along with selling accessories, can help you establish a steady business. 

Cost Breakdown: 

• Repair kits & tools: ₹40,000–₹60,000 
• Rent & deposit: ₹80,000–₹1.5 lakh 
• Accessories inventory: ₹50,000–₹80,000 

Execution Strategy: 

• Attend a short mobile repair course or recruit a skilled technician. 
• Offer pickup and delivery services for customer convenience. 
• Stock best-selling accessories like phone cases, tempered glass, and fast chargers. 

Scalability: Start laptop repair or open shops in neighbouring areas. 

Profit Potential: ₹30,000–₹80,000/month. 

4. Organic Skincare or Homemade Cosmetics 

Budget: ₹2–3 lakh 

Nowadays, there is growing awareness among consumers regarding the benefits of minimising the use of chemicals in cosmetics. Handmade soaps, scrubs, and creams based on natural ingredients are in high demand. 

Cost Breakdown: 

• Ingredients & raw materials: ₹50,000–₹80,000 
• Packaging & branding: ₹30,000–₹50,000 
• Small-scale manufacturing tools: ₹60,000–₹80,000 

Execution Strategy: 

• Begin with 3–5 products like aloe vera gel, lip balm, and face scrubs. 
• Get basic certifications to increase reliability. 
• Partner with influencers in the health and well-being space for reviews and promotion. 

Scalability: Sell on your e-commerce website, sell on other online marketplaces, or supply to salons. 

Profit Potential: ₹20,000–₹60,000/month at the beginning and then more as brand awareness increases. 

5. Second-Hand Branded Clothing Store 

Budget: ₹2–4 lakh 

In the case of certain clothing categories, such as winter clothing, dresses, wedding apparel and formal attire, including blazers and suits, people refrain from investing too much money. Selling authentic second-hand clothing and accessories can help you become a hit with style-conscious but budget-sensitive customers. 

Cost Breakdown: 

• Inventory sourcing: ₹1–2 lakh 
• Shop rent & setup: ₹1–1.5 lakh 
• Marketing: ₹20,000–₹50,000 

Execution Strategy: 

• Only sell genuine products to gain trust. 
• Use Instagram to highlight styling inspiration. 
• Have an offline store with an online business to expand reach. 

Scalability: Start selling footwear, bags, and accessories. 

Profit Potential: ₹30,000–₹90,000/month. 

6. Personal Wellness Training Service or Fitness Studio 

Budget: ₹3–5 lakh 

Wellness has turned into an aspirational lifestyle, and boutique fitness spaces such as Pilates or yoga are trendy. Providing wellness training services or setting up a fitness studio is another business idea under ₹5 lakh you can explore. 

Cost Breakdown: 

• Equipment: ₹1–3 lakh 
• Studio rent & interiors: ₹1.5–2 lakh 
• Certifications & marketing: ₹50,000–₹1 lakh 

Execution Strategy: 

• Run newspaper ads and local Google ads and target people with a busy schedule or lifestyle. 
• Give home consultations and home workout services to people who cannot come to the centre. 

Scalability: Add more niche courses such as Zumba or kickboxing. 

Profit Potential: ₹1-2 lakh/month. 

7. Pet Grooming & Supplies 

Budget: ₹2–4 lakh 

Offering pet grooming services and supplies is one of the most evergreen and sustainable business ideas. It is an emotion-driven niche and an extremely soul-satisfying experience for those fond of pets. Besides an offline grooming store or daycare home for pets, you can also set up an e-commerce marketplace that sells food and other supplies. 

Cost Breakdown: 

• Grooming equipment: ₹50,000–₹80,000 
• Rent & interiors: ₹1–1.5 lakh 
• Supplies stock: ₹50,000–₹70,000 

Execution Strategy: 

• Market your business on Instagram and locally. 
• Serve at-home grooming visits and services. 
• Focus on quality and customer satisfaction. 
• Connect with veterinarians in your area to ask for recommendations and word-of-mouth. 

Scalability: Start selling products online or invest in mobile grooming vans. 

Profit Potential: ₹30,000–₹80,000/month. 

8. Speciality Tea & Coffee Café 

Budget: ₹3–5 lakh 

People in urban cities and metros always look forward to new and unique coffee and tea experiences. It is also extremely popular among working professionals looking for a quiet and relaxing environment to work away from the office for a few hours. You can get creative with the design and menu of your cafe and tap into that market easily. 

Cost Breakdown: 

• Machines & equipment for brewing: ₹1–1.5 lakh 
• Interiors & furniture: ₹1–2 lakh 
• Initial inventory: ₹50,000–₹80,000 

Execution Strategy: 

• Serve seasonal drinks that are Instagram-worthy in appearance and taste. 
• Partner with local bakeries for snacks. 
• Keep fewer items on your menu but of the best quality. 

Scalability: Try merchandising your products or selling packaged coffee/tea. 

Profit Potential: ₹40,000–₹1 lakh/month. 

9. Content Creation & Digital Marketing Agency 

Budget: ₹50,000–₹2 lakh 

With each business requiring a web presence, digital marketing skills are in great demand. It is also the kind of business that doesn’t necessarily need an office set up, which means you save significantly on overhead costs. 

Cost Breakdown: 

• Laptops & editing software: ₹60,000–₹1 lakh 
• Marketing: ₹20,000–₹50,000 
• Office rent and salary expenses: ₹10,000–₹40,000/month (optional at the beginning) 

Execution Strategy: 

• Concentrate on one or two services in the beginning (e.g., Instagram ads, video editing). 
• Develop an excellent portfolio first before accepting work from premium clients. 
• Design tiered packages based on output and quality that incentivise clients to assign more work.  

Scalability: Hire a team and provide services like SEO, influencer marketing, or YouTube/LinkedIn management. 

Profit Potential: ₹50,000–₹1.5 lakh/month. 

10. Event Planning & Decor Services 

Budget: ₹2–4 lakh 

From corporate events to birthday celebrations, creative event planners are always in demand. To keep the costs in check, you can connect with freelancers for each of the special skills required for the execution of such events. 

Cost Breakdown: 

• Decor inventory: ₹50,000–₹80,000 
• Photography & branding: ₹20,000–₹40,000 
• Marketing: ₹20,000–₹50,000 

Execution Strategy: 

• Start with small occasions such as kids' birthday parties. 
• Provide fixed packages for clients to make decisions more easily. 
• Create a vendor network for rental, photography, and catering. 

Scalability: Start with weddings or corporate event management. 

Profit Potential: ₹40,000–₹1 lakh/month.​

Key Things to Remember Before You Start 

Here are some important things you should always remember before you implement business ideas under ₹5 lakh. 

1. Don't Invest All at Once 

It's tempting to spend your entire ₹5 lakh budget on equipment, inventory, or interiors. But that may not be a wise way to spend your capital. Keep at least 20–30% as working capital for rent, salaries, or unforeseen expenses in the first 6–12 months. 

2. Validate Your Idea 

Before investing heavily, test demand on a smaller scale. For example: 

• If you're starting a cloud kitchen, sell to friends and family first and collect feedback. 
• If it's an online product, run a social media ad and check if people like or show interest in it. 

3. Optimise for Customer Experience 

Word-of-mouth is the most powerful and low-cost marketing tool for small businesses. People spreading the word about your product or service will do wonders for your business. You should consider going beyond the sale and giving them more than they expect, like good packaging, a thank-you note, or excellent customer service. 

4. Reinvest Profits 

When profits start coming into the business, do not be tempted to take it all away to spend it on your personal needs. Reinvest at least 40–50% in additional marketing, improved equipment, or new products. 

One of the practical examples is of Raji Sakthi, founder of From the Kitchen – Homely Foods. She started her cloud kitchen with a small gold loan and a focus on authentic, affordable meals. By reinvesting profits and maintaining quality, she grew steadily to fulfil nearly 100 orders a week. This proves that even modest capital can help your business grow and develop. 

Final Thoughts 

Just because you're starting small doesn't mean you can't make it big. If you have ₹5 lakh, you can start a business that is not only profitable but scalable as well. Rather than pursuing popular trends, search for ideas that solve real problems, align with your skills, and have a growing market. Stay lean, stay nimble, and always manage your cash flows properly. 

Looking for expansion of your established business? If yes, then connect with Poonawalla Fincorp and avail a Business Loan with the best terms and affordable rates. Contact us today for more details! 

Frequently Asked Questions 

How quickly can I get steady returns from these ventures? 
All these businesses can give you stable returns after 8–10 months, as long as you keep your expenses in check and focus on marketing. 

Can two of these businesses be operated side-by-side? 
Yes, if they don't require you to be physically present every day. For example, a cloud kitchen and a digital marketing agency can be run side by side. 

Do I need experience to open any of these? 
Not always. For skill-based businesses like repairs or fitness training, learn the skill yourself or hire someone skilled. 

Which business here has the least operational hassle? 
Generally, digital marketing and customised gifting are the easiest to operate, and you can also run them from your home. 

Is ₹5 lakh enough to survive the first year without profits? 
You won't be able to survive the first year if you spend it all at once on non-revenue-generating activities or investments. Hence, keep at least 20–30% of the working capital to manage slow months.