Do you want to start a convenience store and want to know the cost? If YES, here is a cost breakdown for opening a convenience store and the profit margin/ROI. These types of retail stores are often characterized by their late hours, which is convenient for customers who may be passing through the area as they travel. These stores vary in size, ranging from small kiosks to deluxe convenience stores.
But irrespective of the size and what is sold on the inside of the store, many convenience stores rely heavily on selling gasoline as a source of revenue. The customers that patronize convenience stores are individuals who only pop into the store when they need a particular item, such as when a significant other requests certain food or drink and the customer doesn’t want to deal with the hassle of a full – size Grocery Store.
As such, the preferred convenience store customer is the neighbourhood regular who comes in every day or two and sees himself as supporting the neighbourhood. Convenience stores make money by buying goods and selling those goods to customers. They sell things such as snacks, soft drinks, car accessories, lottery tickets, tobacco, and sometimes alcohol.
To determine the exact amount you need to start your business, you need to Develop a business plan. The research you put into your planning should include realistic calculations for startup costs and monthly operating expenses. The plan will also show how long it will take until your business reaches its break-even point (BEP). The BEP is the point at which cost or expenses and revenue are equal—there is no net loss or net gain.
Cost Breakdown for Starting a Convenience Store
Starting a convenience store, requires money, planning and time. Convenience stores are in demand all over the world, making them a good business to get into. With the right location, items in stock, and pricing structure, you can start turning a profit quickly after opening your convenience store.
Meanwhile it can cost up to ,000 to start a convenience store in the united states. This amount represents the cost of leasing an appropriate space, decorating the interior, installing a point-of-sale system and any other technology you may require.
You may also need to buy additional equipment based on any additional conveniences you wish to offer customers, from pay phones to fax machines and photocopiers. Depending on your state, lottery tickets often sell well, but carry an additional equipment cost. You will also have to pay for licenses and permits.
For instance, an Employer Identification Number (EIN) for tax purposes, state, and local licenses as indicated by the SBA, a Resale Certificate (if you are not selling exclusively independent products), a seller’s permit, and a certificate of occupancy. These costs can vary from $200 to $2,000 depending on your business and the state in which you are operating.
Depending on the size of your business, you may need shelving, display racks, cases, and furniture. If you want a website, you need a website builder and a host. Free builders and hosts are available, but their capabilities are limited and may reflect poorly on your brand.
Instead, expect to invest a minimum of $30 to $200 a month for a website. If you choose to hire a cleaning service, you can expect to spend between $50 and $200 a week. Handling cleaning in – house will likely cost $500 to $1,000 for an initial investment in supplies and heavier equipment such as vacuums.
Also consider necessary things like property insurance, including the liability to workers’ compensation and any coverage required for employees or yourself. You may also choose zero-cost word-of-mouth advertising including working any social media platforms you are familiar with, or you may want to hire an ad agency, which will run you anywhere from $1,000 to $10,000 a month.
However, the type of signage you choose will dictate the price but expect to spend from $500 to $1,000 for interior and exterior branding. Working with a lawyer to incorporate your business or an accountant to set up your books and file your taxes can cost anywhere from $1,000 to $10,000 or more.
Note that some of the primary ongoing expenses for your convenience store will include your monthly lease and the cost of utilities. Aside that, the biggest chunk of your expenses comes from inventory (which some research estimates may be up to 70 percent of your monthly spending) and labour. However, the exact cost of all these expenses vary due to location, store size, exact inventory, and how much you choose to pay your employees.
Is Opening a Convenience Store Still Profitable in This Age of eCommerce?
Despite the growing popularity of internet shopping coupled with the rapid home delivery of grocery and convenience items, starting and running a ‘mini convenience store’ is still a good business idea that has the potential to generate respectable profits.
To succeed in this highly competitive retail industry, the store is expected to be convenient. This means an easily accessible and highly visible business location, stocked with the most popular convenience products, and fast and friendly service.
Have it in mind that if a customer’s shopping experience at the store is not convenient, then there won’t be any repeat business. In addition to the usual supply of convenience products, such as milk, eggs, bread, snack items, and soda pop, be sure to add other products and services to attract customers to the store and keep them returning.
These products and services can include lottery ticket sales, tobacco products, newspapers and magazines, a fax service, photocopying, calling cards, postal stamps, and even fresh – cut flowers. The somewhat open secret of a convenience store is that you are able to successfully mark many items up by a higher percentage than your local grocery stores or supercenters do.
You potential customers will be paying for the convenience of not having to spend the extra time and effort to visit the larger store. Additionally, you can charge customers about eleven percent more than an independent grocery store does and about 20 percent more than a mass store like Wal – Mart does.
Starting a convenience store isn’t cheap and you will have to do things right if you hope to achieve success. Some of the best ways to make your convenience store more profitable are to find ways to reduce costs. This includes reducing the amount of staff necessary and trimming your hours down to what is reasonable for your town (for instance, you should avoid being open 24 hours in most cases).
Offering some kind of drive-through to sell food and coffee will give you an edge over the competition. Finally, always consider things that will save your customer time, such as providing an ATM in the store.
Frequently Asked Questions
How Do You Promote A Convenience Store?
- Place adverts on both print (newspapers and magazines) and electronic media platforms
- Sponsor relevant community – based events
- Leverage on the internet and social media platforms like; Instagram, Facebook, Twitter, YouTube, Google + et al
- Install your billboards in strategic locations all around your city or state
- Distribute your fliers and handbills in target areas
- List your convenience store business in local directories / yellow pages
- Advertise your convenience store in your official website and employ strategies that will help you pull traffic to the site
- Position your Flexi Banners at strategic positions in the location where your convenience store is located.
- Ensure that all your staff members wear your branded shirts and all your vehicles are branded with your company logo.
How Do You Start A Convenience Store Business?
- Conduct your market survey and feasibility studies
- Learn everything you need to learn about owning and operating a convenience store
- Choose a name and register the business (DBA is preferable)
- Draft a detailed Business Plan
- Secure the needed licenses and permits
- Apply for an EIN (Employer Identification Number)/Federal Tax ID Number.
- Open a corporate bank account
- Rent and furnish your shop
- Stock your store with goods
- Hire employees
- Market and promote your business
What Equipment Is Needed To Operate A Convenience Store?
- Point of Sale (POS) machine
- Fridge and Deep freezer
- Receipt issuing machines
- Shopping Baskets or Carts
- Soda Fountain
What Makes A Convenience Store Successful?
- The store must be well stocked with goods from different manufacturing brands at all times
- The store must be strategically positioned in an area that attracts both human and vehicular traffic
- The employees must display top-notch customer service skills
- The management style of the store must be top-notch
What Are The Ongoing Expenses For A Convenience Store?
The ongoing expenses for a convenience store are few and manageable. They include employees’ wages, lease and utility payments, telephone and internet subscription and inventory expenses.
How Much Do Convenience Store Owners Make?
It is difficult to categorically state the amount a convenience store owner makes because there are loads of factors that can influence it – business structure, location, and other factors. But according to Indeed.com, the average store owner earns about $66,000 per year.
What Are The Costs Involved In Opening A Convenience Store?
- The cost of registering the business
- Legal expenses for obtaining licenses and permits
- The cost of purchasing insurance
- The cost of renting, equipping and furnishing the store
- The cost of installing signpost and promoting the business
- The cost for start-up inventory (stocking with a wide range of good)
- The cost of launching a website
- The cost required to take care of miscellaneous et al
What Type Of License And Permits Do You Require To Operate A Convenience Store?
City or county business license. Occupancy permit. Alcohol and tobacco license. Health and safety permits.
Is A Convenience Store A Good Business?
Sure. The truth is that, despite the rising popularity of internet shopping combined with home delivery of grocery and convenience items, starting and operating a convenience store is still a good business venture.
What Happens During A Typical Day At A Convenience Store?
- The store is opened, cleaned and arranged
- Previously sold goods are restocked
- The goods are properly cleaned and arranged or displayed
- The convenience store is then opened for business
- When customers walk-in they are attended to and the product they are looking for are sold to them.
- The store is closed for the day, accounts are balanced and the workers go home hoping to resume the next day.
What Are The Best Selling Items In Convenience Stores?
- Tobacco Products.
- Beer and Wine.
- Lottery Tickets.
- Non-Alcoholic Beverages.
- Gas and Automotive Supplies.
- Packaged Snacks and Candy.
- Over-the-Counter Medication.
- Sweets and Snacks
- Eggs and Dairy Products.
- Over-the-Counter Medications.
- Dry and Canned Goods.
- Meats and Produce.
What Are The Costs Involved In Opening A Convenience Store?
It can cost up to $50,000 to open your convenience store. Such an amount represents the cost of leasing an appropriate space, decorating the interior, installing the point-of-sale system and any other technology you may require.
How Much Does A Convenience Store Make In A Day?
The profit in the sale of non-fuel products in average store (after expenses) is about 2.1%, or around $75.83 per day (about $3,261/month).
How Much Does It Cost To Start A Convenience Store?
It can cost up to $50,000 to open your convenience store.
How Can You Make Your Convenience Store Profitable?
- Source for quality and cheaper wholesale goods
- Strategically cut down on operational cost
- Deploy effective marketing and sale strategies
- Offer Unique Discounts and Promotions.
- Offer a Loyalty Program.
- Optimize Store Layout.
- Sell a Variety of Popular Products
- Expand your customer base.
What Is The Growth Potential of A Convenience Store?
The growth potential of a convenience store is positive. Available data shows that convenience stores account for over a third of all outlets in the U.S. The trend of growth in the convenience store industry has continued rising steadily for many years.
Do Convenience Stores Sell Batteries?
Sure, convenience stores sell different types of batteries especially for flashlights and transistor radio et al.
Is Owning A Convenience Store Profitable?
Sure, owning a convenience store is profitable and as a matter of fact, convenience store owner earns about $66,000 per year.
What Is The Average Profit Margin For A Convenience Store?
Gross profit margins in U.S. convenience stores is between 15 percent (the lowest margin) and over 50%.
Should I Buy A Franchise Convenience Store?
It depends on your motive and goal of wanting to start a convenience store, but generally, buying a franchise will give you leverage.
How Do You Value A Convenience Store?
There are four different types of valuation methods that can be used to value gas and convenience stores, they include:
- Asset-based valuation.
- Income approach to value (capitalization of earnings)
- Income approach to value (discounted cash flow)
- Market approach to value.
Who Is The Target Market of Convenience Stores?
With a big focus on convenience and value, c-stores’ food and beverage options are very appealing to customers with lower incomes. In fact, customers who make less than $25,000/year make more food purchases at c-stores than customers in higher salary brackets.
Are Convenience Stores More Expensive?
The convenience store can get away with charging higher prices because they are offering greater “convenience.” Convenience has a value that many people are willing to pay extra for.
How Do You Manage A Convenience Store?
- Keep Bathrooms Spotless.
- Illuminate the Forecourt.
- Manage Your Inventory and Offer More Products.
- Keep it Organized.
- Increase Interior Visibility for Your Cashiers.
- Hire and Reward Attentive Staff
- Try Testing New Products.
- Clean the Soda Fountain and Food Areas
How Much Do Convenience Stores Make in UK?
The income depends on the size of the business and other factors. A mathematical average would probably be a return of around £25,000.
How Much Does It Cost To Start A Convenience Store in UK?
You’ll need to invest up to £50,000 and pay a £92 weekly membership fee.
Do Convenience Stores Sell Gift Cards?
Yes, almost every convenience store sells gift cards.
Do Convenience Stores Make Money?
According to a 2018 industry report, 153,237 convenience stores are operating in the U.S. These stores generated $616.3 billion in sales for an average of nearly $4 million per store. Profit margins, however, are typically thin in the food industry, and convenience stores are no exception.
How Much Money Can You Make Owning A Grocery Store?
Grocery store owners make anywhere from $60,000 up to around $300,000 or more.
Are Small Grocery Stores Profitable?
Grocery stores operate on a slim profit margin per item. Generally, profit margins are between 1 percent and 3 percent, depending on the item. It’s not unusual for a grocery store to make just a few cents per item. In 2017, the average net profit margin of grocery stores was 2.2 percent.
Do Convenience Stores Sell Toothbrushes?
Yes, convenience stores sell toothbrushes.
What Grocery Stores Make The Most Money?
In 2017, Kroger was by far the most profitable supermarket chain store in the United States, with a revenue of approximately 115 billion U.S. dollars. Albertsons, which was the second most profitable chain store that year, earned roughly 60 billion U.S. dollars in revenue.
What Are Some Insider Tips For Jump Starting A Convenience Store?
- Choose a good location and shop facility to launch the business
- Make sure your shop is well stocked with different brands and types of goods
- Throw a party before officially opening the store
- Be deliberate with your marketing sales approach
- Encourage the use of work of mouth to promote your convenience store
- Leverage on all available online and offline platforms to promote your convenience store
What Are Some Skills And Experiences That Will Help You Build A Successful Convenience Store?
- Customer services skills
- Interpersonal skill
- Accounting and bookkeeping skills
- Business management skills
- Bargaining skill
- Business management skills
- Basic computer skills
How Much Money Does A Grocery Store Make A Day?
In 2018, median weekly sales per supermarket were $455,777. Per day, that is $65,111.
Can You In Fact Make A Million Dollars Owning And Running A Convenience Store?
Yes, you can. But trust me, you must be ready to invest in the business and of course deploy top-notch business skills to achieve your aim.
Is Supermarket A Profitable Business?
The supermarket business is very lucrative in the United States because that is where households go to get their daily needs. In fact, it is estimated that shoppers made about 1.5 trips to grocery stores on the average every week in 2017.
How Much Does A 711 Owner Make?
Franchise Owner salaries at 7-Eleven can range from $13,068 – $190,207.
What Is The Most Profitable Item In A Grocery Store?
What Is A Basic Grocery List?
- Bakery and Bread.
- Meat and Seafood.
- Pasta and Rice.
- Oils, Sauces, Salad Dressings, and Condiments.
- Cereals and Breakfast Foods.
- Soups and Canned Goods.
- Frozen Foods.
- Dairy, Cheese, and Eggs.
- Can You Sell a Patent Pending Product in 2022? - January 22, 2022
- 16 Best Coworking Spaces in Palo Alto in 2022 [Features & Price] - December 10, 2021
- What Size of Pressure Washer is Best for a 2 Story House? - November 19, 2021