How to Start a Convenience Store: Everything You Need to Know
How to start a convenience store is first answered by defining a convenience store.3 min read
What Is a Convenience Store?
How to start a convenience store is first answered by defining a convenience store. A convenience store is exactly what the name implies; a store of convenience in an easily accessible area where customers usually have a variety of household products, beverages, prepared fast food items, bagged ice, household products, lottery tickets, and gasoline.
Even with the rise in customers ordering items for home delivery on the internet and companies that offer same-day delivery from local grocery stores, convenience stores continue to be a solid source of revenue. Convenience stores are in-demand and thriving as a profitable business venture in all parts of the world.
The size of the store is at your discretion. You may choose a large establishment offering a varied inventory of items, a small to medium store, or a kiosk with popular items customers on-the-go are interested in buying.
Convenience stores have the option of marking up the price of items at a higher percentage than competing big box stores and grocery stores.
On average, a convenience store marks up items about 11 percent over a regular grocery store and around 20 percent for big-box supercenters.
As a convenience store owner, you must be prepared to offer "convenient hours of operation," which means working different schedules as well as on holidays.
An important part of owning a convenience store is maintaining and being in compliance with local city/county/state regulations regarding health and safety standards and procedures.
How to start a convenience store begins with the planning stage, which includes business and marketing plans. For more information, visit the Small Business Development Center.
Step 1. One of the first decisions to make is what type of products your convenience store will stock.
Step 2. Another important decision is whether to start the store as a brand-new venture starting from scratch or to use your startup money to invest in a franchise.
Step 3. Create a budget that outlines the startup costs.
Step 4. Secure funding. This money is used for expenses such as leasing a retail space, decorating, signage, point-of-sale equipment, and products. The Small Business Administration is a good source for providing loan solutions. Also, check with your local bank to find out if they offer small business loans.
Step 5. Prior to opening the store, receiving all necessary licenses, insurance, permits, as well as filing any other paperwork required by your state must be completed.
Examples of licenses required include :
- A business license
- A sales tax and use license for items sold
If your store will be selling tobacco, alcohol, or lottery tickets, you will need:
- Tobacco vendor's license
- Liquor license
- Lottery retailer's license
Step 6. If your business will be operating from a storefront, you will need to check with your local licensing department to find out if you will be required to have a Certificate of Occupancy (CO). The certificate ensures government regulations, zoning laws, and building codes are adhered to and in effect.
Step 7. Select and secure a location for your business. The location should be highly visible, easily accessible, have convenient parking, and be located where there is a substantial amount of foot and vehicle traffic.
Step 8. Set up the store's interior.
Step 9. Prior to opening, schedule an inspection by the health department and the fire department to ensure compliance with state regulations.
Step 10. Once the store has been inspected and received approval to open, begin stocking the shelves with applicable products.
Step 11. Begin the process of interviewing potential employees. This includes doing thorough background checks, checking references, and requesting a drug test.
Step 12. Open for business using the opportunity to draw traffic with special deals or free food and drinks.
- Is it better to build a store from scratch or buy a franchise?
Building from the ground up can be costly. A franchise has the benefit of an established name, there are established guidelines already in place, and marketing and advertising are easier than starting from scratch with a new and unknown company.
- How much does it cost to start a convenience store?
On average and depending on the size of the store, location, products, and services provided and the number of employees on the payroll, the startup can range from $10,000 to over $1 million.
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