Did you know that crafting a formal plan is a major predictor of success for small businesses?
In fact, entrepreneurs who took the time to create a plan for their business were 16% more successful than entrepreneurs who did not. That’s a significant difference in a market where almost half of all small businesses close their doors within the first two years of opening.
Now that you’ve decided to throw your hat in the small business ring, it’s time to create your grocery store business plan. To give your grocery store every possible chance to thrive, you’ll need to develop your vision and determine precisely what you need to do to make your grocery store a household name.
This guide will walk you through exactly how to create your grocery store business plan, carving out a path of success for your small business from the very beginning.
1. Conceive a Vision For Your Grocery Store
The first step to creating your grocery store business plan is something you’ve probably already done — imagining what you want your grocery store to be like.
In this phase of the grocery store business plan process, simply spend some time dreaming about your grocery store. Who do you want to serve? What do you hope to offer to your community? How do you want your customers to feel when they visit your grocery store?
The best way to develop your vision for your grocery store is to determine what needs are currently unfulfilled by your neighborhood’s current grocery landscape. For example, your area may have big box stores offering general groceries, but there could be an opening in the market for a specialty grocery store offering unique goods that aren’t easily found elsewhere.
Here are a few specialty grocery store ideas to help you start thinking creatively:
- An organic grocery store offering health foods and certified organic groceries
- A grocery shop catering to specific dietary needs like vegan, vegetarian, or gluten-free
- A butcher shop offering fresh meats cut to order
- A deli offering meats and cheeses by the pound and charcuterie supplies
- A grocerant, which is a cross between a grocery store and a quick-service restaurant
2. Determine What Products You Want to Stock in Your Grocery Store
After you’ve spent some time imagining what type of grocery store you’d like to open, the next step is to think about what kinds of items you’d like to offer.
In your grocery store business plan, you’ll need to outline the products you plan to carry, where you intend to source them, how much they will cost, and the prices you plan to sell them for.
You may also want to consider changing your offerings seasonally to create demand for limited-time products and give customers a reason to come back to see what’s new. Factoring in seasonality will make your grocery store business plan even more comprehensive.
To get started on this part of your grocery store business plan, it can be helpful to do some research by visiting other grocery stores and seeing what types of products they offer, identifying vendors from which you might source your products, and getting a rough idea of the margins on commonly-stocked grocery items.
3. Choose the Right Grocery Store Equipment and Systems
Once you’ve identified the types of products you plan to sell in your grocery store, you’ll need to determine what tools and equipment you’ll need to keep your grocery store running smoothly.
By including equipment in your grocery store business plan, you’ll be able to more easily calculate the initial and ongoing costs associated with opening your grocery store.
Here’s a list of the basic equipment you’ll need to get your grocery store off the ground:
- Shelving to display your products along the aisles
- Refrigeration units and freezers
- Shopping carts or baskets
- Signage to help customers navigate your store
- Scales for products sold by weight
Choosing the right point of sale system is also a critical step in putting together your grocery store business plan. A grocery-specific POS system can be a valuable tool in keeping your business operating as efficiently as possible.
IT Retail, for example, is an all-in-one POS solution designed specifically for grocers with all the features you need to get your grocery store up and running — including convenient online grocery options, powerful inventory management tools, and more.
To learn more and customize this essential piece of your grocery store business plan, check out the IT Retail Build and Price tool.
4. Find the Right Location For Your Grocery Store
In your grocery store business plan, you’ll need to choose a few options for your new business’ location, taking into consideration the pros and cons of each.
When evaluating location options for your grocery store, you should assess the demographics of each area, how much foot traffic the location gets, and how easily your customers will be able to access it. It’s also crucial to account for the rent prices of each location and what fits best into your budget.
It’s important to note that all locations will have upsides and downsides, which is why it’s so important to choose one that’s well-suited to your grocery store’s unique needs. For example, a location downtown will see lots of daily foot traffic, but the people walking by might not necessarily be buying groceries.
5. Market Your Grocery Store
Now that you’ve spent so much time ironing out the details of your grocery store, you need to find customers! In this portion of your grocery store business plan, you’ll need to determine how to bring new customers into your store and how to encourage customer loyalty through marketing.
Along with bringing people through your grocery store’s doors with grand opening celebrations, sales, and events, you’ll also want to consider how to keep customers coming back over and over again.
A customer loyalty program is an excellent way to build a solid customer base that’s excited to shop at your store. To keep them coming back, you can offer rewards for spending more at your store or offer exclusive deals and discounts to customers who join your loyalty program.
6. Crunch the Numbers
We’ve reached the most important part of your grocery store business plan: the financials. After you’ve determined where your store will be located, what types of equipment you’ll need, what kinds of products you plan to offer, and other costs like employee pay and utilities, it’s time to do the math to determine how profitable your grocery store will be.
Here are a few essential calculations you’ll need to run:
- Initial Investment: This is the total amount you’ll need to spend to get your grocery store started, including the purchase of necessary equipment, your business license and fees, and initial inventory.
- Operating Expenses: This includes all of your recurring expenses, such as rent, utilities, wages, inventory, and advertising.
- Sales Projections: For this calculation, you’ll need to approximate your revenue.
- Break-Even Analysis: The success of your grocery store hinges on this calculation. At the break-even point, your business’ revenues equal your expenses, and your grocery store begins to profit.
Once you open your business, a robust POS system can help you keep track of these metrics and gauge the success of your grocery store over time. Schedule a personalized demo with our grocery store industry experts today to learn how IT Retail can bring your grocery store business plan to fruition.
