Despite the growing prevalence of internet shopping combined with home grocery delivery and convenience goods, starting and running a ‘mini convenience store’ is still a profitable business venture that has the potential to produce respectable income.
The name suggests everything. The shop must be convenient to thrive in this section of the highly competitive retail industry. This means a business location that is easily accessible and highly visible, well-stocked with the most popular convenience items, and fast and friendly service.
Note that if the store’s shopping experience is not comfortable, then there would be no recurring business. Here’s your quick guide to opening your own convenience store!
Overview: What’s a Convenience Store?
Convenience stores are distinguished by their late hours, which helps customers drive through the region as they go. The shops, ranging from small kiosks to upscale convenience stores, differ in scale. Regardless of the size and what is sold inside the store, many convenience stores rely heavily on gasoline of sale as a source of income.
Be sure to add other goods and services, in addition to the regular supply of convenience products, such as milk, eggs, bread, snack foods, and soda pop, to draw customers to the store and keep them back as a repeat company. Read on and learn more!
Step 1: Learn the Basics and Plan it Well
For success as a business owner, a clear strategy is fundamental. It will help you figure out the company’s details and discover some unknowns. Opening your convenience store can cost up to $50,000. Such a sum reflects the cost of leasing a suitable space, decorating the interior, and installing the point-of-sale system and any other technology that you might need.
Step 2: Form a Business Entity and Choose Your Location
A corporate organization refers to how legally organized a corporation is. There are four key business organizations to choose from, including sole ownership, partnership, company, and LLC. Each type of organization has its own advantages and disadvantages, such as exposure to liability, costs, and administrative requirements.
You need to pick the best location with optimum traffic and low competition with a strong business plan in hand. In high-traffic, noticeable areas where there are no local grocery stores, convenience stores should be situated. Customers who want to complete fast transactions without making longer trips to large chain stores would be appealing to these stores.
Step 3: Apply for a Business Permit
A sales tax permit, Employer Identification Number, and Occupancy Permit, among others, will include some of the common local, state, and federal registrations. More particularly, additional state licenses would be necessary for convenience store owners who wish to sell regulated products such as cigarettes, alcohol, lottery tickets, or gasoline.
Independent corner shops comply with many of the same rules as big supermarkets. Contact the Occupational Safety and Health Administration to manage the complexities associated with the ownership of convenience stores.
Step 4: Source Out Financing
One thing is to develop a good business idea and have the skills to run it, but getting the financing to start a convenience store is another. The cost of starting a convenience store can be very high, with most of the costs going to remodeling, installations, security systems, signage, and inventory.
It can be difficult to fund a new start-up because banks usually want the borrower to have good credit and spend 15-25% of their own capital.
Step 5: Get Your Marketing Ready and Hire Employees
It’s time to get marketing materials prepared and produced, now that you are getting close to opening. Understanding your market and what media they use is crucial to reach out effectively and let them know that you are available.
It would be difficult to find good employees for a convenience store, and the owner will either need a flexible schedule or management staff to support staff who do not turn up for their shifts. In addition to running background checks and random drug testing, it’s necessary to search for trustworthy workers to staff the shop actively.
Convenience stores are generally profitable, with total gross profit margins of $450,000. Profitable projects will lead to an opportunity to open other places within a city or country, which would boost your future income even further. Ultimately, finding ways to cut costs is some of the easiest ways to make the convenience store more profitable.
You’ll have an advantage over the competition by providing some drive-through to sell food and coffee. Finally, for your convenience, consider items that will save your client time, such as having an ATM in the shop.