How To Buy A Convenience Store Business

Convenience store owners must constantly manage high fixed costs including rent, inventory, and operating costs like utilities while optimizing product and pricing mix and attracting foot and car traffic.

how to buy a convenience store business

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A key to maximizing your profit margin is knowing your product margins and getting the product mix and display correct in your store. Below is a chart that shows the average gross margins for different types of products.

Be careful about choosing the size of your store, as it will ultimately drive a large part of your startup and operating costs. Unless you have very deep pockets, buying a truck stop-sized store is probably not a great idea. In this case, it really is better to start small.

If the store a block down sells coffee for $.99 and you are selling it for $1.19, you should consider that either you need to have much better coffee than your competitor and/or understand that some people and their impulses will go to your competitor.

There are various loan purposes to consider as a borrower depending on whether you are looking to purchase an existing convenience store business, obtain start-up financing for a new store, seek capital improvements, pursue construction, or request financing for machinery, equipment, and inventory.

Convenience stores often use asset-based lines of credit for a variety of business needs. Asset-based financing can be either a revolving or term loan that is secured by assets such as accounts receivable, real estate, equipment, or inventory.

You negotiate with the seller the interest rate and terms of the financing. One benefit of seller carry financing is that the seller will be supportive of the transition and should offer training to ensure that the buyer is successful in taking the business operations over.

With careful planning and research, the right location, the right products on the shelves at the right price, and a lot of hard work, you can eventually earn a good living after opening your convenience store.

Jen DuBois is a former corporate banker and management consultant with an MBA from London Business School. She has spent much of the last decade advising a wide variety of entrepreneurs and small businesses around the globe on business planning, business model validation, finance, strategy, and marketing. She also volunteers as a SCORE mentor working with entrepreneurs in her local community to launch their business ideas.

Hello, I am interested in opening a Generial Store that is located in a tourist area that is located in the middle of a western USA natural area and the closest town with grocery stores are 46 to 36 miles. It would be like a historic Generial Store. I would sell camping equipment food items and beverages a limited amount of clothing items, firer wood, pre filled propane tanks. I would also want to have a electrical power station to recharge electric vehicles and for van campers to charge when needed to recharge there solar battery bank. And also offer postal and shipping services to campers. I would also like to offer parking lot camping spots when the weather is bad with heavy snow and/or rain at the present time I do not know if I want to offer shore power. But, we are not going to offer wast water dumping service. We do not want to sell 2,000 items. We have a list of what we want to sell. We only want to be open six days a week.

Convenience stores are often characterized by their late hours, which is convenient for customers who may be passing through the area as they travel. The stores vary in size, ranging from small kiosks to deluxe convenience stores. Regardless 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.

There is more to starting a business than just registering it with the state. We have put together this simple guide to starting your convenience store. These steps will ensure that your new business is well planned out, registered properly and legally compliant.

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, and installing the point-of-sale system and any other technology you may require. You may need to purchase 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. Finally, you will need to stock the store itself with the wide variety of goods that you intend to sell, which often comprises the majority of what you spend money on.

Some of the primary ongoing expenses for a convenience store include your monthly lease and the cost of utilities. Beyond 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 labor. The exact costs of all of these expenses vary due to location, store size, exact inventory, and how much you choose to pay your employees. Note that paying them more than your local minimum wage will likely result in better loyalty and performance, which translates to greater profit for you.

The stereotype of convenience store customers is that many of them only pop into the store when they need a specific 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. While these customers are good, they are more sporadic. As such, the preferred convenience store customer is the neighborhood regular who comes in every day or two and sees himself as supporting the neighborhood. As such, he will be both a regular and a friendly customer, which is a great combination.

Convenience stores make money by buying goods and selling those goods to customers. Typically, convenience stores sell things such as snacks, soft drinks, car accessories, lottery tickets, tobacco, sometimes alcohol. Your profit represents the amount of money you have taken in after you have subtracted how much you paid for these goods as well as any operational expenses accrued throughout the month.

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. Customers are effectively paying for the convenience of not having to spend the extra time and effort to visit the larger store. Effectively, 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. Overall, this is very helpful for your monthly profit margin.

Generally, convenience stores are profitable propositions, with average gross profit margins upwards of $450,000. Profitable ventures may result in an opportunity to open other locations within a city or area, increasing your potential profits that much more.

Ultimately, 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 to prepare and sell any food that you sell on site 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 for their convenience.

When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your business is sued. In business law, this is referred to as piercing your corporate veil.

Additionally, learning how to build business credit can help you get credit cards and other financing in your business's name (instead of yours), better interest rates, higher lines of credit, and more.

NetMany net 30 credit vendors report to the major business credit bureaus (Dun & Bradstreet, Experian Business, and Equifax Business Credit). This is how businesses build business credit so they can qualify for credit cards and other lines of credit.

Recording your various expenses and sources of income is critical to understanding the financial performance of your business. Keeping accurate and detailed accounts also greatly simplifies your annual tax filing.

Most businesses are required to collect sales tax on the goods or services they provide. To learn more about how sales tax will affect your business, read our article, Sales Tax for Small Businesses.

A convenience store is generally run out of a storefront. Businesses operating out of a physical location typically require a Certificate of Occupancy (CO). A CO confirms that all building codes, zoning laws and government regulations have been met.

If you already have a logo, you can also add it to a QR code with our Free QR Code Generator. Choose from 13 QR code types to create a code for your business cards and publications, or to help spread awareness for your new website.

Relative to other businesses, a convenience store doesn't need as much direct marketing because much of your traffic will be people who drive up as the need arises. Still, putting up billboards in the city or using bright and visible signage around your own store can help to get their attention. Similarly, you should embrace social media as a cheap way to engage customers and establish yourself within the community while also letting followers feel like insiders when they hear about deals. Speaking of that, many convenience stores use some form of loyalty programs. These may offer them all-purpose coupons or conveniences such as free coffee or food. This encourages regular visitations and may make customers likelier to come to your store than the competition.

Consider offering more "above and beyond" services at your convenience store. This may include a car wash, employees pumping gas and wiping windshields, and even employees greeting the door. This helps your customers feel pampered and makes them likelier to return. Consider some "outside the box" conveniences like having a Redbox rental station where customers can rent movies and video games. Embrace the kinds of loyalty programs mentioned above and don't forget that the best way to get a customer's attention is with attractive and organized displays within your store. 041b061a72