Industrialization and the consequent urbanization of less developed countries has led to the growth of several small business activities which could be clubbed under the umbrella of Urban Informal Sector. The role and contribution of urban informal sector have been appreciated of late. This paper highlights the findings of a study of pan shops located in the urban sectors of Ahmedabad and Anand. There are very few entry and exit barriers to this business which can be started with very little capital and special skills. Although pan shops are known to sell ready made pans (which are made with arecanut, lime and bittle leaf) and cigarettes traditionally, these days many of them have diversified into toiletories, cosmetics and confectioneries. Profitability in this business is very high, but there are still resistance for several people to move into this business for social reasons. Shop keepers would not like their children to get into the same business. Pan shop keeping can be taken as a seed-bed for developing entrepreneurship.