Own Business

How To Start A Profitable Grocery Shopping Business?

In an unstable economic situation, a novice entrepreneur is advised to choose a niche in business that is guaranteed to be in demand on terms among clients. From this point of view, the sale of food products is one of the most win-win solutions.

We put together this simple guide to starting your grocery business. These steps will ensure that your business is well planned out, registered properly and legally compliant.

Guide to starting your grocery business

Step 1: A clear business plan

Business plan

A business plan for opening a grocery store involves a mandatory calculation of profitability and specific actions to increase economic sustainability. Before you start drawing up a business plan, you need to decide on:

  • assortment;
  • prices;
  • store format;
  • the level of income that the entrepreneur expects;
  • business structure types (the sole proprietorship, partnership, limited liability company (LLC), and corporation, etc.);
  • obtaining necessary permits and licenses;
  • registering for taxes;
  • opening a business bank account and credit card.

Step 2.: Choosing a grocery store format

Grocery stores are of the following types:

  • It stands out from other types of stores by the scale and breadth of the assortment. A hypermarket most often operates under a franchise, because only a well-known name and brand will attract the maximum attention from consumers;
  • A supermarket, like a hypermarket, has a wide range of products. But, unlike a hypermarket, its business plan includes fewer items and calculations;
  • Grocery stores sell exclusively food products. When drawing up a business plan, the focus and target audience of the store is taken into account;
  • A mini-market is a kind of “convenience store”. Only trading here is carried out on a self-service basis.
  • Convenience store is one of the most preferred business projects. It is not as expensive as the previous options, it fights back faster and does not require a huge amount of papers and permits to exist. A ready-made business plan for opening a grocery store from scratch looks simple and straightforward.

Step 3: Costs.

How to organize your small grocery shopping store if a novice businessman does not have the required amount of money? He has three outputs:

  1. Attract a professional investor who will not only provide the required amount, but also help improve the efficiency of the plan. The disadvantage of this option is the need to deduct a percentage of income to the investor.
  2. Get a bank loan. However, loans today are issued at high interest rates and only if certain conditions are met.
  3. Take advantage of a government subsidy. It is provided to persons who were registered at the employment center for a year and were not employed.

Step 4: Premises, renovations and equipment.

The interior of a store should not be complicated with sophisticated compositions. It is enough that the renovation is fresh and of high quality. The color of the walls can be kept in a light tone and the color of the floor in a dark one. For the target audience of the store, design and interior decoration of the premises are not so important. The assortment and convenience of the arrangement of commercial equipment matter here.

The equipment you will need: refrigerators and freezers; cash registers; shelves and showcases.

Step 5: Find suppliers.

Retailing groceries as a business is risky. There is always a chance to run into unscrupulous suppliers and spoil the reputation of your store. Supplier selection criteria:

  • positive recommendations;
  • availability of declarations and certificates for food products;
  • correct storage and transportation;
  • reputation (no claims, fines, revenue growth).

Step 6: Recruitment and payroll.

When developing a business plan for a grocery shopping, the search and selection of personnel must be taken into account. The main requirements are for sellers. It is also important to hire vendors with experience in the food industry so that you don’t have to spend money on training. For other categories of employees, the requirements are set at the discretion of the manager.

Wages are set depending on the minimum wage in each country, the worker’s working hours and his qualifications.

Step 7:  Marketing.

It is important to organize the opening correctly. To increase the clientele on this day, you can arrange a holiday: decorate the entrance with balloons, hold interesting events, for example, handing out gifts for making purchases or arrange a competition, as a result of which customers can win small household appliances. In the future, it is also recommended to carry out promotions, think over a system of discounts and issue discount cards to regular customers.

Step 8:  Grocery store logistics

Most of the products will be delivered to the store by suppliers, but if you plan to develop the direction of farm products and buy some of the items yourself in Cash & Carry hypermarkets, you will need to purchase your own commercial transport. For these purposes, you can purchase a used car with low consumption.

Step 9:    Establish your online trading.

The task of a small business is to focus on the right location of the store, so that it is “on the way” for residents of a certain area, and also to take care of high-quality and fresh products at an affordable price. In the future, you can also organize an online store for those categories of people who value their time and prefer to make purchases without leaving home.

Step 10:    Possible risks and ways to prevent them

Perishable goods. Correctly planned procurement volumes help to get rid of delays. If, for example, the demand for one of the goods decreased in January, February and March, then you should not expect that in April it will return to its previous level. So for April the volume of goods is ordered less.

Mistakes in the assessment of sales volumes. In case of an incorrect assessment, there is a risk of the appearance of “stale” goods, which then have to be sold cheaper. Before filling out an application for a supplier, you should not be lazy and analyze the level of demand and store traffic for a certain period.

Competition. Everything is quite complicated here. Still, hypermarkets and supermarkets have their advantages, which attract a large number of customers. Recently, Internet commerce has been actively developing.

Increase in rent or loss of space. The way to protect yourself is the choice of reliable contractors and legal literacy in matters of registration of lease agreements.

This is the end of How To Start A Profitable Grocery Shopping Business. Thanks for reading.


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