You’ve decided to immerse yourself in the business world, but you’re struggling to figure out how you want to go about it. One of the best business niches is food; it has a very large and diverse audience and can generate an amazing ROI. What’s more is that there are so many ways to creating a food business. If you’re looking for something simple and bound to see attention, opening a grocery store is a solid option. But since you’re new to this, you might not have any idea on how to get started. Below is an in-depth guide to help beginners open their very own grocery store.
Decide on a Niche
Like every other business, grocery stores aren’t as simple as having various brand-name foods on the shelves. Each one has their own niche that makes them unique among their competition. You don’t hear a lot about grocery store niches, but here’s a quick list you can choose to center your store around:
- Cheese shop
- Produce market
- International supermarket
- Supercenter
- Warehouse clubs, like Costco
- Corner store
Each option listed here can be tailored however you want. If you see yourself being a quick stop for a bag of chips or a cup of coffee, a corner store is what you want to aim for. Alternatively, you might want to establish your own supercenter, which houses a wide array of different products. As this is only the first step, don’t hesitate to spend as much time as you need to weigh the pros and cons.
Search for an Appropriate Location
As they say in the world of real estate, “location, location, location.” Where you put your grocery store can make the difference generating success and being overlooked. If you put your store in a less-than-ideal location, like not having anywhere to park or in an area where barely anyone visits, you won’t see a lot of foot traffic. The most ideal locations to put your store includes shopping centers, near college campuses and populated neighborhoods. Your location should also be walkable or have ample parking space. The latter is especially true if you’re planning on opening a grocery store chain or supercenter.
Purchase the Necessary Fleet Vehicles
Depending on your chosen niche, you may need to consider investing in a fleet. A fleet is a group of vehicles that’s used for commercial purposes. You’ll be using this fleet to deliver products right to your customer’s front door. However, this is one of the biggest investments you’ll ever make as each vehicle cost thousands. In addition, you also must factor in the cost of other expenses such as fleet insurance, safety technology, and fleet management tools. Fleet management tools help your fleet manager gain real-time visibility into the day-to-day operations and improve the safety of your drivers. Another benefit of implementing fleet management tools is how it can help you reduce fuel costs. Fuel can cost more than any other expense in the long run. In fact, the average cost of fuel these days ranges from $3 to $5 a gallon. Combined with the fact you’ll have multiple vehicles requiring it and you’re going to be spending hundreds each month.
Decide on Your Business Structure
Before you can legally open your store for business, you must decide on an appropriate structure. A business structure is what determines how your grocery store will take care of its taxes and how it handles legal claims. You can choose to be a sole proprietorship, partnership, corporation, and limited liability company (LLC). Seeing as how you’re a beginner, it’s best to go with an LLC. An LLC is the most beginner-friendly structure as it combines the best of the other three into a single entity. You’ll have full ownership like a sole proprietorship, you can add anyone you want to it like a partnership, and you’ll have protection from personal liability claims like a corporation. LLCs have become mainstream in the business world because of its benefits. In fact, established companies have switched their structures to save on taxes and for the extra flexibility.
Register Your Business and Obtain the Necessary Documentation
Once you’ve settled on a structure, the next thing you need to do is register your grocery store. To register, you’ll need to apply for an employee identification number (EIN), purchase the appropriate insurance policies, secure your business license, and apply for a retail store license. If you plan on selling any alcoholic beverages, you’ll also need to apply for your liquor license as well.
Don’t Combine Your Business Income With Your Personal Finances
A rookie mistake many business owners make is combining their personal finances with what their business profits. This can lead to confusion and even put your personal assets at risk should a lawsuit be filed. You can keep these finances separate by simply opening a business account.
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