Supermarket Business Ideas

One of the easiest businesses to establish is a supermarket. That is why there is a proliferation of supermarkets in every neighborhood.
Supermarkets are popular places people visit for their daily needs. They offer different items such as consumables, healthcare products, lotions, soaps and household items.
The business is lucrative and operators earn income based on margins. Most items sold are branded and have fixed sale and profit margins.
This makes price determination simple for new entrant into the business. Sometimes supermarket owners add grocery items.
Before launching the enterprise there are a few things to consider. You need an ideal location and do a comprehensive cost analysis.
Write a supermarket business plan, carry out a survey, feasibility study and secure funding. The amount of funding depends on the location, amount of stock and size of the store.
Challenges
There are a few challenges new entrants into the business will encounter. You face the possibility of purchasing substandard or adulterated products.
Other difficulty involves finding quality substitutes, price determination and trustworthy suppliers. There is also lots of stiff competition from other supermarkets and grocery stores in your locality.
  • Substandard products
  • Expired products
  • Adulterated products
  • Finding quality substitutes
  • Price determination
  • Trustworthy suppliers
  • Competition
  • Stocking  
Pricing the Goods
Although packaged goods have recommended sales price there are lots of substitutes. The popularity of the brand and price usually determines the level of patronage.
Make sure you purchase only products popular in your neighborhood. Select popular brands that offer best prices to customers.
Things that affect price determination are where you sourced the product, transportation costs and demography purchasing power. Your price should be in uniformity with competing supermarkets in your locality.
 If you offer high prices your customers will go to competitors.
Things that Determine Price
  • Buying substitutes
  • Branded products
  • Where you sourced the product
  • Transportation costs
  • location
Supermarket Business Startup
Start by writing a business plan and carrying out a feasibility study. You need to register the business and obtain business permits and licenses. Other important requirements include finding a good location, credible suppliers, trustworthy staff, funding and marketing.
  • Write a supermarket business plan
  • Register the business
  • Raise capital
  • Find a good location
  • Obtain business permits and licenses
  • Find suppliers
  • Hire qualified staff
  • Marketing
Supermarket Business Plan
Write a supermarket business plan and factor funding, location and sourcing the products. Conduct a survey to study competitors and find out what your customers need. The business plan should also provide a startup framework including expansion plan.
Register the Business
Select a catchy business name for your brand. You could decide to form a proprietorship business, limited liability or partnership.
The legal structure determines the tax requirements and management structure. Obtain a business permit and fulfill standard regulatory requirements. Some of your items are subjected to value added tax and you need good insurance cover.
Funding the Business
You need substantial funds to start a grocery store or supermarket. Majority of the funds are spend on supply and fixed inventory.
The working capital is huge and usually recurrent. Other funding requirements are rent, security system, staff wages and maintenance.
To source funds present your Business Plan to a commercial bank in your area. You need to open an account in the bank and provide collateral.
Supermarket Inventory
A basic supermarket will stock canned products, soaps, detergents and sanitary products. They may have edibles, dairy product, cereals, grains and frozen poultry products.
Fixed inventory include refrigerators, freezers, display cases, cash register and computer systems. Others include a bus/truck, generating set, lighting and large storage facility.
Choose a good location
The success of the enterprise depends on your location of choice. A good location should have huge pedestrian traffic or large concentration of people.
Good locations are within a popular shopping mall, neighborhood or a busy commercial area. Other requirements include store visibility, adequate parking and easy accessibility. The store should have adequate storage and a large display board.
Find Suppliers
The source of your products is another important aspect of the business. Try to source inventory from manufacturers or major wholesalers.
Supermarket owners generally purchase in volume to reduce retail prices. This is an effective strategy that offers the customers competitive prices. Leverage on bulk purchase, branded products, substitutes and better margins.
Employ Staff
An average supermarket needs sales staff, cashier, accountant and manager. Other staff requirements are security guards, stock keepers, drivers and cleaners.
Hire staff with trustworthy characters and good customer relations skill. The number of workforce you need depends on the size of your establishment.
  • Sales staff
  • Cashier
  • Accountant
  • Manager
  • Security guards
  • Storekeeper
  • Drivers
  • Cleaners
Marketing
Small scale neighborhood supermarkets can use flyers, local publications, billboards and signboards. They could hire sales representatives and organize fun events.
Use discounts, bonanzas and free gifts to attract patronage. Make sure your prices are competitive and fair.
Other marketing tools are yellow pages, directories and a dedicated website. Leverage on social media such as Instagram, Facebook and Google+


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