How To Start A Small Grocery Store In 8 Simple Steps
From my experience as a grocery store owner, a lot of people just keep asking How do I start a small grocery store and that has prompted this article.
All the necessary steps required to start a small grocery store would be listed here in the most understandable manner.
What Does A Small Grocery Store Mean?
A grocery store is a store that sells food products processed or packaged in different forms. Most grocery stores also sell more than food products, they also sell household items that are useful for the day to day running of the home.
The grocery store is a term used mainly in the different American countries, other synonyms of grocery stores like supermarket, convenience store and corner shops are used instead of grocery stores in other continents depending on which is used in each country.
Items sold in different grocery stores depend on what the grocery store owner has decided to sell in his/her grocery store.
How Do I Start A Small Grocery Store
For one to start a grocery store, there are some steps required to do that.
Start a small grocery store by following these important steps
1- Choose The Type Of Grocery Store To Start
The first step to starting a small grocery store is deciding if you want to become a franchisee to other popular grocery store brands like spar, Walmart, 7-eleven, Circle K, ampm, Metal Supermarkets, GNC franchising e.t.c or you want to start your grocery store with your brand name.
If the latter is the case, you would need to register your grocery store as either a sole proprietor or a Limited Liability Company.
A sole proprietorship also referred to as sole trader or proprietorship is a type of business in which just one owner pays taxes from the profit earned from the business. This type of business is the easiest to start because it is not bound by any government regulations. A sole proprietor can decide to use even his name to start up a business and would have nothing to worry about.
A limited liability company on the other hand is a business structure mainly operated by private businesses. In this type of business, all partners are responsible for the business and are subject to unlimited liability for private debts.
A grocery shop could be run by a sole proprietor or be a Limited liability company, it all depends on the individual, funds needed and the size of the grocery store they want to start.
2- Set Up A Business Plan For Your Grocery Store
Every business no matter how small or big it is is supposed to have a business plan so the owner or his workers do not stray away.
A business plan is a plan containing different strategies, goals and objectives that would be used to run the business and move it forward.
A good business plan for your grocery store should contain
- An executive summary
- Company description
- Market analysis
- Competitive analysis
- Description of management and organisation
- Break down your products and services
- Marketing plan
- Sales strategy
- Request for funding
- Financial projections
All these listed above are very necessary for every business including starting a grocery shop.
3- Choose A Perfect Location To Start Your Grocery Store
Finding a perfect location to start a grocery store is paramount to the success of your grocery store. Even with this recent coming of online shopping, walk-in stores are still in vogue.
While starting a small grocery store and searching for a grocery store location, here are things to look out for
- Parking space for cars and other vehicles
- Warehouse to pack items
- Enough space to sample different items that would be sold in your grocery store
4- Get The Necessary Licenses And Do The Necessary Registrations To Start A Grocery Store
For anyone trying to start a grocery store, licences like business place licenses, food and drug licences from food and drug administration from your country are required.
5- Register Your Grocery Store For Taxes
With your necessary license, business location, you are now liable to register for your Inland Revenue Service(IRS).
The tax numbers, names of different takes are peculiar to the country or state you are in.
To verify or get clear information about the way to go about it, you can confirm from the revenue service in your vicinity.
For my home country Nigeria, one would need to register for personal income tax from the federal income revenue service and get their tax number to pay their taxes and keep their receipts of payment.
6- Open A Business Account For Your Grocery Store
Starting a grocery store would require you to open a business bank account for your business. A business bank account gives your business access to many perks like loans and grants you would need to run your business.
Also, a business account would help your business look professional
7- Install Inventories Management Software For Your Grocery Store
Inventories management software is used to manage inventories in every grocery shop.
Inventories management software helps you track the best sellers, items that follow slow sales trends, items you have in stock and items that are out of stock.
Going from each counter to another trying to know what item has been taken and which stock to replace would be hectic for any person working in a grocery store but with inventory management software,
8- Install Bookkeeping And Accounting Software
Bookkeeping software installed would be used to track the finance of the grocery store. While bookkeeping software is used to track, accounting software is used to analyse the finances obtained per day or per month depending on how the grocery shop owner decides to set his software up.
Both bookkeeping and accounting software are important while starting a grocery shop as a grocery shop owner should be able to know if he is running into profits or losses in his business.
How Much Do Grocery Store Owners Make?
From my experience in my grocery store, The profit margin for grocery stores is usually 10%, but from that 10%, different bills and taxes are paid which might reduce the initial 10% to about 6-7% depending on the number of bills and amount paid in taxation.
Are Grocery Stores A Good Business?
Starting a grocery store is a good business because a reasonable amount of profit is always certain and also, people can barely do without groceries therefore solving a problem by selling groceries to people would make you a reasonable amount of money.