Starting a grocery store business in a small town can seem very easy. After all, you won’t usually have hypermarkets like Walmart to compete with. However, the reality can be a little different. Small towns are usually in rural areas, consisting of a close-knit population averaging less than 3,000 people. Here, a grocery store is not just a place to buy milk, bread, and household essentials; it acts as a hub for the community, bringing people together, even if for a few short moments, to escape their uneventful lives. As such, a grocery store in a small town means much more to its residents than a one in a big city, where residents usually have several options.
Many groceries stores in rural small towns have been forced to close for a host of reasons, meaning residents in such towns are severely limited in their options for shopping. It’s not uncommon for residents in some small towns to drive for at least 45 minutes just to get to the nearest grocery store.
In that context, therefore, starting a grocery store in a small town can be very lucrative because of the almost non-existent competition.
Below are the steps to starting one.
1)Planning Your Grocery Store
Setting up a shop in a small town doesn’t automatically mean it’ll be cheap. On average, you’ll need at least $100 000 to open your grocery store. There are numerous costs to think about at the beginning. This is just one of several essential things that a grocery store owner must consider when opening. You may have to seek a loan for funding if you don’t have the money upfront.
Financial planning here involves breaking down the costs of everything, from hiring employees to purchasing inventory and everything in between. Your grocery store could collapse within a few months without proper financial planning. This is because you can’t expect to see profits within a week. A grocery store is a long-term investment, meaning you should plan on being in such a business for the long haul.
In addition to financial planning, you need to choose what kind of products you’ll offer. If you choose to focus on only household produce, then ensure that your potential customers will want those products. This helps you avoid stocking items that won’t sell.
2) Write A Business Plan And Resolve Legal Issues
Once you’ve had a clear idea of what kind of grocery store you’d like to have, it’s time to have a solid business plan. Such a plan should detail your experience, what short-term and long-term goals you want for your grocery store, and how to implement the plan. Simply jumping into the grocery store business can be disastrous. Once you’ve set a clear plan for implementation and management, it’s time to register your grocery store. How you do this will have implications down the line. For example, if you register your grocery store as a limited liability company (LLC), it means you won’t have to worry about being personally liable if your store should ever face a lawsuit. However, registering it as a sole proprietorship can lead to such issues. It’s always best to consult a lawyer experienced in these matters to ensure you’re on the right side of things.
Another crucial issue is getting the right licenses for your grocery store. Ensure to get all the necessary licenses from the local and state authorities. For example, if you plan on selling alcohol at your grocery store, some jurisdictions may require you to have a special license.
3) Get Business Account And Grocery Store Insurance
You won’t know how your store is doing if you can’t closely monitor its finances. A crucial step in doing this is setting up a bank account specifically for the grocery store. Some owners make the mistake of using their personal bank accounts for handling grocery store funds. This can muddy the water and make it difficult to ascertain the true financial standing of the grocery store.
Getting grocery store insurance should also be a priority at this stage of planning. This protects you and your grocery store in case of unfortunate events happening. For instance, if the store catches fire and burns down, you can recoup your inventory if you have the right insurance. In the same vein, somebody getting injured on your premises may lead to a lawsuit. Having insurance helps you offset the cost of such legal matters.
4) Open Your Grocery Store And Brand It
At this stage, you’ve laid the groundwork and are now ready to open your doors for business. Ensure to create awareness among the locals about your upcoming launch. This won’t be difficult because small towns don’t usually have much going on.
A strong marketing strategy for your grocery store is crucial to defining your brand. Ensure to do extensive market research and know if you have competition. Customers need to know exactly what your grocery store stands for. For instance, if you want to be associated with fresh produce like vegetables and farm products, your advertising efforts should emphasize this.
Ultimately, proper planning will give you the best chance at establishing a profitable grocery store in a small town.
