Hyperspectral imaging (HSI) is an effective technique for material identification and classification, utilizing spectral signatures with applications in remote sensing, environmental monitoring, and allied disciplines. Despite its potential, the broader adoption of HSI technology is hindered by challenges related to compactness, affordability, and durability, exacerbated by the absence of standardized protocols for developing practical hyperspectral cameras. This study introduces a comprehensive framework for developing a compact, cost-effective, and robust hyperspectral camera, employing commercial off-the-shelf (COTS) components and a volume phase holographic (VPH) grism. The use of COTS components reduces development time and manufacturing costs while maintaining adequate performance, thereby improving accessibility for researchers and engineers. The incorporation of a VPH grism enables an on-axis optical design, enhancing compactness, reducing alignment sensitivity, and improving system robustness. The proposed framework encompasses spectrograph design, including optical simulations and tolerance analysis conducted in ZEMAX OpticStudio, alongside assembly procedures, performance assessment, and hyperspectral image acquisition via a pushbroom scanning approach, all integrated into a structured, step-by-step workflow. The resulting prototype, housed in an aluminum enclosure, operates within the 420–830 nm wavelength range, achieving a spectral resolution of 2 nm across 205 spectral bands. It effectively differentiates vegetation, water, and built structures, resolves atmospheric absorption features, and demonstrates the ability to distinguish materials in low-light conditions, providing a scalable and practical advancement in HSI technology.