If you’re thinking about opening a convenience store, the decision might come down to whether it will be profitable for you or not, and if so, how much you need to spend in order to get off on the right foot. There are several considerations ahead when deciding whether it is something that should be considered as a small business opportunity. When weighing all of these factors, it may help to think in terms of whether your new venture represents an upgrade from your current product line, as opposed to merely replicating what others have already done. For example, you can create completely innovative products that would otherwise seem beyond any other retailer. In addition, this way of making money could potentially allow you to test a wider variety of products in your grocery stores. Here are 10 facts you need to consider before starting a retail business.
#1) Can you afford it?
It doesn’t matter whether you have millions of dollars sitting around right now, or simply enough cash to eat out every night. Your ability to meet your daily expenses will determine whether opening a convenient store will actually work out financially. You might want to make sure that there are some costs involved in this endeavor, so be prepared for them when you start looking into the idea. The more you have to invest initially, the less likely you are to earn profits while lowering or raising prices — even slightly.
#2) Will they really pay me for my time?
What do you want the customers to perceive about your store? Is it just another place where you can grab a snack after an intense workout? Are you planning on doing everything yourself? Or are you going to take advantage of your employees by hiring high-quality people who could do anything from stocking shelves to customer service? While your customers may still need to use their own judgment in order to figure out whether the goods available at your location match up with how your store looks visually, having them check in with you via phone, text, etc., can definitely boost your chances of selling. It will also allow you to evaluate whether your establishment truly meets its stated standards and expectations, or is instead trying to please everyone.
#3) How do I know I will be able to keep it running?
One major factor of a successful shop is having good equipment to run it efficiently. To begin a project like building up your space, you will need to gather necessary materials and tools, as well as hire handymen. This process may go on for quite some time before you receive the first payment for your project. Before you decide how many items to put together, you need to estimate the cost of each one. Many people are intimidated when dealing with contractors because they don’t know exactly what they’ll be paying for. However, once you get started, you can begin to better understand what you will need upfront, so the contractors aren’t surprised when you find out the price before you make plans to complete the project. With a bit of practice, you should eventually be able to determine which items you’re willing to spend more on. You may need to cut corners, but if this seems unlikely, you will have saved yourself thousands over the course of time by avoiding waste.
#4) Does Anyone Want To Work Here?
Before you open your doors and charge customers full price, you’ll need to ask a few questions regarding the potential staff members at this particular store. First, decide whether the job market is right for you, especially since you may need to find people who can deliver specific items. Next, ask yourself the ethical question: Do these workers deserve such high wages? Of course, they do! But their skill set should be evaluated not only based on the amount of hours that they are asked to work, but also on any benefits they derive from working in this business. They should be granted breaks, paid time off, paid vacation, and similar incentives.
#5) What kind of competition is expected?
You can never really tell what the demand will be until you step foot in the door and have the chance to sit in a row. Once you get familiar with your surroundings, you can gauge how likely it is that customers will come back. This will be extremely important during the early days of operations, but may become critical as long as customers return regularly. Some stores have had problems operating smoothly ever since they opened, and it can be hard to attract patrons without a strong sense of community.
#6) How difficult is the setup?
The final phase of assessing your options is determining whether there are any logistical concerns when beginning to build it out. Depending on the extent of your investment, you may require substantial funds to hire professional labor, purchase adequate workspace, install appropriate equipment, or secure government subsidies. Whatever your needs may be, you will want to ensure that this process is easily accessible to both vendors and clients. Otherwise, you may be left scrambling to find someone capable of handling the demands of today’s modern economy.
#7) Can we handle our debt?
When choosing between leasing or purchasing items, ask yourself the following questions: Will buying the merchandise be cheaper than renting? Do we really need to pay interest on loans? And can we afford the monthly repayments? Will we have access to credit to cover this? Perhaps it’s worth considering alternative financing solutions, particularly due to recent record low yields on stock options. After all, nobody wants to buy stocks that rise far faster than they decline. This means that you probably won’t want to risk investing your entire fortune (or more) into purchasing individual stocks, so asking for equity-based financing is advisable. Furthermore, financial institutions often offer competitive rates to their depositors, so you can potentially save quite a chunk of change while finding a better deal. Ultimately, you need to be able to live within the constraints of your budget and savings to avoid significant debt load.
#8) Who can help me with logistics?
It’s easy to forget that no matter how large or small a company is in terms of physical size, if it didn’t exist on paper, it most certainly does now. So if you don’t already have someone in mind to design your storefront, you will need to look for a contractor. Hiring people is an expensive and tedious, but necessary exercise. Unless you’ve worked in retail for years, then chances are you will need to rely on a seasoned hands-on specialist. Alternatively, you may want to hire local professionals who will assist you immediately with basic tasks like installation. Just remember to choose individuals who have experience in this field to avoid putting themselves in harm’s way.
#9) How many employees will we need?
This stage will also affect your initial budget, so plan for the number of employees the startup team needs to produce before you begin filling in the gaps. By understanding your goals and requirements, you can begin estimating the numbers. At the very least, you can expect to pay yourself a salary, though that could easily increase depending on how long it takes to ramp up production and develop your customer base. Be sure to include bonuses in the calculations; not all companies pay quarterly incentives during recessions, which can be disheartening to those who don’t do it out of regular practice.
#10) Can I provide training?
Before you set up a sales floor and put up signage or display your wares, it’s essential to learn how your prospective customers interact with products of your choice. Training can help you achieve that, which is why it is imperative to partner with certified experts who can teach you and guide you through various stages of marketing. On top of the lessons learned, you and your staff will make valuable contributions to the growth of your company when your knowledge improves.
Now that you know what it takes to set up, operate and maintain a convenience store, here is an overview of what steps you should follow to bring your business online quickly.