Small Business Enterprise
A convenience store is a small store or shop that may sell items such as sweets, ice-cream, soft drinks, lottery tickets, cigarettes and other tobacco products, newspapers and magazines, along with a selection of processed food and perhaps some groceries. Stores that are part of gas stations may also sell motor oil, windshield washer fluid, radiator fluid, and maps. Often toiletries and other hygiene products are stocked, and some of these stores also offer money orders and wire transfer services or liquor products.
They are often located alongside busy roads, in densely-populated urban neighbourhoods, at gas/petrol stations or near railway stations or other transportation hubs. They are there to serve a need, providing a practical alternative to the out-of-town superstores. Rarely do they attract customers shopping for the week. Instead, they draw their custom from impulse or emergency purchases, from people topping-up their cupboards or from those simply getting the daily essentials like milk and bread. With the demise of the local specialist store, convenience stores have also become centres of the community in more isolated locations.
Small Business Enterprise Essay Example
At a time of economic uncertainty, the market in these local retailers seems remarkably solid. According to the Association of Convenience Stores (ACS), tens of millions of customers visit convenience stores every day. So if you’re looking to buy a business, this could be an attractive option. Mike Carr, group managing director of EM&F believes convenience stores are a good business to buy in these uncertain times: “Due to a degree of uncertainty in the general economic climate, people are buying businesses that are more likely to continue to grow.
Convenience stores fit this bill because everyone needs food. ” According to Mike Carr of business agents Everett, Masson & Furby, there is not a typical convenience store owner. “You get people going into business for the first time who want a business that they can understand fairly quickly. You also get people who have come out of the professions – retired bank managers for example. The good thing about the market is that it appeals to a wide variety of people. ” Another advantage of this business is that you can come to it without prior retailing experience.
And if you are a little unsure about jumping in at the deep end, you can often arrange a settling in period at the start. Paul Williamson, director of business transfer agents Ernest Wilson, explains, “When we sell a business there is a period of time before completion during which people can go in and work with the vendors, learn how to do the job and also check the figures. ” A lot of people don’t know where to buy their stock from, what to charge etc. The vendors can show them how to run the business and also introduce them to the customers, which is important. Not everything can be gained from experience, however. Andrew Bresnan, a convenience store owner in Dorset, says that having the right personality is crucial. “The most important aspect is to be able to get on with the general public. Another factor is to be very well organised and stay on top of the paperwork. There is a lot of paperwork in this business, with invoices and so forth. ” You will also need to be prepared to put in the hours. Many convenience stores attract business by staying open when the superstores are closed.
This is especially relevant on Sundays, when superstores, by law, can only open for six hours. You may need to stay open late at night if you are selling alcohol, and likewise, if you are running newspaper delivery rounds, you’ll have to be up with the dawn chorus. Strong consumer demand for convenience shopping has made the convenience store sector as one of the dynamic sectors in the whole retail market. Convenience stores have established an important niche for themselves in the grocery supply chain, essentially serving top-up shopping requirements to supplement the supermarket shop.
Village shops have become increasingly rare in the densely populated parts of the country, although they remain common in remote rural areas. Their rarity in England is due to several factors, such as the rise in car ownership, competition from large chain supermarkets, the rising cost of village properties, and the increasing trend of the wealthy to own holiday homes in picturesque villages, consequently houses which used to be occupied full-time are often vacant for long periods. Community shops have become popular in some villages, often jointly owned and run by many villagers as a co-operative.
The Village Retail Services Association () promotes the role and function of the village shop in the UK. Many modern village shops choose to stock items which draw in customers from neighbouring areas that are seeking locally sourced, organic and specialist produce such as local cuts of meat, local cheeses, wines and others. There is an opportunity for the local convenience store to develop their potential as community stores and lifestyle assistants as they are better placed to know the particular needs of a town or village more intimately than the larger supermarkets.
They could create solutions for the increasingly time-pressured element in the community, by offering anything that will give the consumer extra time, e. g. home deliveries of high-quality frozen food, whether it is lunch for the home worker, or the evening meal for the busy family. Finding space has always been an issue as well for an average convenience store. Offering any product beyond the traditional boundaries is generally rendered impossible, simply as a result of size constraints. However, the evelopment of the computerized kiosk is seen by some as one way to revolutionize the world of convenience retailing, making it possible to buy cars, book holidays from these outlets. Trying to satisfy every customer needs is not an easy task. Looking upon what the people want and needs should be closely deliberated. Stocks are important and as well as the price. Although the products are not as much range from the big supermarkets as long as the stocks are full them people will be encourage to come in to the store.
The price should also be not as much as expensive as the supermarkets or else they will just be push on going to other shops. As well as the basics, many convenience stores add to their income and customer base by offering a range of other services, such as lottery tickets or video rental. Convenience stores are about offering as many services as possible. Here are some ingredients to boost your appeal. Lottery What it is: Some outlets can sell tickets for all National Lottery draws and National Lottery Instants, others can sell Instants only.
How to get one: You must have over 750 sq ft shop floor, over 750 customers per day, and be open 9am-6pm daily and until 7. 30pm on draw days. The number of lottery outlets is not currently increasing, so new opportunities only arise when an existing outlet has its contract terminated – for failing to meet sales targets or breaking lottery rules for example. Camelot selects a replacement from the applicants it has on file. What it costs: Installation and training on the machine is free and there are no ongoing expenses.
What you can make: Retailers earn 5% commission on every sale and 1% on every prize payout over ? 10 and below ? 200. Cash Machine What it is: The ability to give customers instant access to cash through an ATM. How to get one: ATMs are supplied to independent retailers by companies such as MoneyBox, CardPoint and InfoCash. What it costs: The shop has to rent the machine from the ATM provider. What you can make: The store makes a commission on every transaction. ATM supplier, Moneybox, also claims that the subsequent increased footfall and spending can lead to an 8-15% total increase in revenue.
In-store bakery What it is: Buying frozen, part-baked bread, cakes and pastries, which can be prepared quickly each morning to be sold as freshly baked items? How to get one: Suppliers include Delice de France (who also provide a cabinet, signs, labels and training) and Le Pain Croustillant. What it costs: You buy the part-baked bread like any other supplies. If you require a bake-off oven, however, this could cost you. What you can make: Freshly baked bread gives customers another reason to visit your store and the aroma is believed to encourage shopping, leading to an increase in general sales.
Video games rental What it is: Renting out videos games to customers and selling ex-rental copies. How to get one: You don’t need a licence to rent video games. You can buy the games direct from a wholesaler, lease them, or buy a franchise. What it costs: New releases cost and need to be regularly replaced. If you lease video games, they are updated regularly by the leasing company. What you can make: Once you have made back the purchase price everything else is profit. Ex-rental video games can be sold on. If you lease, your profit is the margin between your rental costs and what you earn from your customers.
In building a business plan like a convenience store they have also differences of objectives. I would like to that this example “Millennium Mart’s primary objective is to create a new and revolutionary distribution outlet that will significantly reduce prices for its customers and provide greater services with an equal level of quality. The company seeks to be first to market with this daring new idea so as to capture market share and create greater than average profits. ” This objective is doable and attainable because a convenience store brings customers good services to their customers.
Reducing the prices can also be possible but customers expect to pay a premium of 10-12% on top of supermarket prices. Above that and it starts to get close to ‘insult pricing’, and they start to feel that they are being exploited because they don’t have the option of going anywhere else. If this happens they won’t come back. And by making an objective like the one above, it is better to provide a time frame of the on how to widen the distribution outlet. The most critical element of a convenience store success will be its marketing and advertising.
In order to capture attention and sales convenience store will use prominent signs at the store locations, billboards, media bites on local news, and radio advertisements to capture customers. Convenience store competitive edge will be the lower prices we will charge our customers and the novel purchasing experience that will draw shoppers. In the convenience store industry, low cost and availability are the two success criteria. We plan to create these advantages in a new, high-tech environment that will retain customers.
The most critical element of convenience store success will be its marketing and advertising. Convenience stores serve the entire purchasing population of its geographical area but focuses on customers who need to purchase items outside of normal working hours such as swing shift employees and quick shoppers looking for snacks and related items. In order to capture attention and sales Convenience store will use prominent signs at the store locations, billboards, media bites on local news, and radio advertisements to capture customers.
Many of the initial customers will be drawn to the unique nature of the store and will then have the opportunity to realize the cost savings of convenience store. Since automated shopping is still in its infancy, the firm expects to invest a great deal of its available cash and revenues in marketing efforts. Since the store will be a stand-alone, remote facility, there is little in the way being able to directly influence how we close the sales other than to have an attractive storefront with our low prices and easy-to-use system.
We believe that this in itself is its own seller. One critical procedure to ensure top customer service and reliability will be establishing a method for keeping enough inventories of all our products. We will be using industry data on inventory for other convenience store chains to assist us. Initially the company will only have a small staff including upper management, an operations technician and office manager. All other services, such as bookkeeping, will be outsourced. The following tables illustrate our financial projections over the next three years.
Please note that we expect to be operating at a loss for the first six months before advertising begins to take effect and draw in customers. As retained earnings increase, a debt retirement fund will be established to encourage early repayment, thus relieving interest expense. Also, a 30-day payment period for purchases will be used to avoid incurring liabilities. We are using the industry standard business ratios for independent convenience store chains as a comparison to our own. There are some significant differences between the two since we have a completely different storefront than our competitors.
First of all our accounts receivable are very different as we expect to have higher sales using credit cards than other stores, due to the convenience of using credit cards and cash cards at our facility. There is generally a three day waiting period to receive funds from the credit card company. This is a short period of time compared to a normal collection day period of 30 days, but it is still something we need to factor for. In addition, we expect higher percentages in inventory as we will be operating only one store initially and even many independent convenience store owners often have two or more facilities.
Our long-term assets are low since we are only renting our facilities. With the changes that can be implemented on the problems that might arise to solve it as well as for the development of the business, it will make the business be able to learn more on how to provide the needs of the customers. It will serve as the trial and error side of it in which the ones which will click with the customers will be continued and enhance. The products and services that is least purchased or used by the customers will be look upon and evaluated if it is needed to take out of the business and change to other services that is needed more.
If changes are implemented, customers are also provided the information for them to be aware of it. Proper dissemination of information is given to the customers, it might be helpful if before the changes we inform them already and let them know about the definite changes that will be done so that when the changes has been done, the information that is needed to give to the customers is the new products and the importance and value of the product or the services.
It also essential to say the differences of the product before and the services so that the customers will be able to decide if they prefer that service and will also serve as an advertisement, not only the customers are the ones who can be affected with changes bur the business owners as well. In any case that the change will not be a boom, the owners should be ready on it or in the other hand, and they can also expect that it will be a huge success for future development of the business. References: 1. ^ North American Industry Classification (NAICS) 2002, “452 General Merchandise Stores (US)” 2.
The Association of Convenience Stores Represents both convenience store chains and independents. Produces an annual Yearbook. Negotiates deals for its members on shop insurance, finance, health insurance etc. Website: http://www. acs. org. uk. uk 3. Alliance of Independent Retailers Membership organisation representing 18,000 independent retailers. Services include a free legal helpline, insurance deals and a copy of Monthly Trade magazine, “The Independent Retailer”. Website: www. indretailer. co. uk 4. http://www. bplans. com/convenience_store_business_plan/executive_summary_fc. php#1. 1_Objectives#ixzz1DC1pbGfA 5.