A highrise can’t be built without proper foundation, and your grocery store won’t see the success you want unless you take the proper steps to build and grow it correctly.
Statistics say a small retailer closes every 12 minutes. Starting any new business is a daunting task, and competing with big box stores makes the grocery industry even more difficult to survive.
With the right grocery store business plan and point of sale system, your store can thrive and find success in the market. We’re here to help provide you with five key steps that can help you build a solid strategy to help your grocery store or market get off the ground.
A Clear Blueprint is Key in Building a Successful Grocery Business
The right business plan and strategy must take into account key considerations, including:
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Cost structure
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Calculating projected income
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Attracting prospective customers
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Creating a marketing plan
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Employing the right systems to optimize grocery efficiency
Putting together a growth plan from conception to building to execution is important, as it can help you with considering all possible outcomes or challenges. Running a grocery store comes with specific challenges and processes that can be made easier with the right planning and systems in place.
1. Initial Costs and Investment
Operational costs play a central role in balancing revenue and expenses for your grocery store. Initial investments to consider include:
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Building costs or rent deposit,
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Registration fees,
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Licensing fees,
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Developer costs, and
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Product inventory costs.
Creating a budget and planning for any obstacles or surprise costs is important in setting yourself up for success. Working with contractors and developers to find cost-efficient ways to get your store looking the way you want it to, whether you’re leasing a space or building from scratch, is a great way to cut costs.
Investing in a top-of-the-line POS system from the start can also help to optimize efficiency for your store from the get-go, and can help you save money from having to deal with any sort of hardware or software transition in the future. Moving from one system to another requires downtime, and downtime (no matter how big or small) leads to reductions in profit.
Taking into consideration how long it might take you to pay off any loans or debt is also an important factor. This is a great exercise in being able to manage money in versus money out. On the opposite side of budget are income calculations and revenue projections, which are vital parts of the success equation.
Investing in a trustworthy grocery POS system from the start is key. Learn how IT Retail can help get you started with a demo.
2. Projected Income
Cost of goods sold and labor expenses are the key cost drivers for grocery stores. Profit margins should be considered and assessed from the start — calculating your business’ profit margins will give you insight into potential revenue or income. Creating a sales forecast will assist with anticipated monthly revenues, and a careful study of your potential market will help you arrive at realistic numbers.
Comparing your total revenue against labor, maintenance, and other operational expenditures can help you assess whether you’re on track to be profitable. Revenue projections and estimated income also come from identifying foot traffic and average sale per customer.
An efficient grocery POS system like IT Retail can help provide you with the data points in order to put together revenue projections, and better understand how products are moving on your shelves.
3. Customer Loyalty, Retention, and Upselling Strategies
Maintaining traffic and revenue rely heavily on attracting new customers, and developing customer loyalty. Simply put, bring in more people and keep them there.
Loyalty programs can help you identify and reward “good” and loyal customers, and can direct you to who you need to focus your attention on retaining. This can look like offering new customers discounts, coupons, or perks for coming back.
For returning and loyal customers, the next step is to increase their average order value. Are they coming in to buy a single loaf of bread every couple of days? Information like this can help drive strategies to increase their spend. Position those items close to other items that pair well with it, or set up an enticing display, to test if the average order value increases.
Grocery-specific POS systems like IT Retail can provide you with the right customer data points — increasing the efficiency and effectiveness of promotional activities in order to continue attracting net new business. Develop promotions strategically and seasonally, and use analytics tools to assess how successful your targeted promotion was at attracting new customers and increasing the order value for repeat customers.
Everyday low pricing, zone pricing strategies, and loyalty discount programs are great campaigns to test on your customers and their habits.
4. Grocery Marketing Plan
A marketing plan for a grocery store can provide guidance for any new business owner, and help them find a niche or loyal following. Potential marketing tactics include paid advertisements, sales promotions, public relations, and pricing and customer service initiatives.
Combining these marketing disciplines with your store’s specific strengths or unique offerings can help you pursue the right kinds of customers. Local newspaper ads, social media, direct mail, and email marketing are great ways to invite new customers to your store.
You may want to start with a fixed budget before developing your strategies in order to give yourself clear boundaries to work within. You can also determine a budget after coming up with campaign ideas.
Regardless, calculating the cost of implementation and execution on your marketing strategies is necessary to work within your financial means, and not burn more cash than you can afford. Budgeting, combined with key customer data points and information to drive marketing campaigns, will help you attract, retain, and grow your customer base.
5. Efficient Systems and Processes
A full scale all-in-one grocery POS solution can significantly improve the growth and performance of your store. A solid system is a core piece of the other steps we’ve listed to create a solid business plan.
Reporting and analytics can help you see top-selling items, and create noise or promotional campaigns for popular products. Grocery point of sale systems like IT Retail come with inventory management and analytics that give you insightful data and a clear picture of potential promotions to run.
Sales reports and customer loyalty are also key functionalities that can help set you up for success in attracting and retaining customers. IT Retail also provides a simple, easy-to-use system so your employees can focus on providing a world-class customer experience.
Finding the Building Blocks to Execute on Your Grocery Store Business Plan
Now that you have a better understanding of the five core elements a grocery store business plan should include, constructing one for your small business should seem like a more accessible reality. Systems like IT Retail make execution significantly easier by providing an entire full scale end-to-end solution that can help you manage every area of your business with ease. Inventory management, reporting and analytics, and marketing campaigns can all provide actionable insights to help you optimize your business plan for success.
IT Retail also has a dedicated support team to ensure you have no issues with hardware or software. If you want to get started with planning for your grocery store, or if you already have one and you want to execute on a business plan or strategy, get in touch with us and we can help you supercharge your grocery store’s success with our full- scale grocery store POS solution.