The dream for many people is to own and run their own business. One of the better opportunities that is available today is a convenience store. People stop at stores like this all the time to pick up essential supplies that will help them get through the day. Some are even equipped to provide fueling options, car washes, and meet other customer needs. If you’ve got the money to start a business today, then here are the pros and cons of owning a convenience store to think about.
What Are the Pros of Owning a Convenience Store?
1. You have a natural customer segment.
Once you establish a convenience store into a neighborhood, you become a destination business for customers to frequent. Everyone in that neighborhood will utilize your store when they have a quick need that must be met. This can mean drinks, snacks, or even party supplies even if you aren’t providing fuel as well. You don’t have to spend much on marketing because you have a natural location-based customer segment.
2. You have the opportunity to set your own prices.
You’re going to be purchasing many of the products sold in your store at wholesale rates. This means you get to dictate, at least to a certain extent, how much your profit margin is going to be. Of course you can price yourself out of the market if there are several convenience stores within a 1-5 mile radius, but you can also make yourself more competitive with a few basic price changes when there is a lot of competition as well.
3. Your business can provide economic stability.
Convenience stores have a rather stable level of revenues and income. This means as a business owner, you have a certain level of economic stability, even when there are downturns in the local or national economy. You’re also likely providing jobs to others in your community, which means you’re helping other businesses and people pursue their own dreams as you pursue yours.
4. It is relatively easy to get started.
If your convenience store isn’t selling fuel or other potentially hazardous items, then the licensing requirements you’ll need to follow to get started are rather basic. You’ll likely need a food handler’s certificate, a health inspection, and a food seller’s license in addition to a retail license. Every community is different, but it only takes a few days to get the paperwork filled out and turned in under most circumstances.
What Are the Cons of Owning a Convenience Store?
1. Convenience stores often need to be open long hours.
It’s not uncommon for a convenience store to be open 24/7. Even when there are off-hours, a convenience store is often open by 5am and won’t close until at least 11pm. Those are some pretty long hours for owners who don’t have any employee support helping them out. This can burn out an ownership group rather quickly.
2. Convenience stores are easy targets for theft.
For those who work at a convenience stores, a robbery is always a threat that lurks in the back of the mind. For owners, it isn’t just an armed robber taking cash out of the drawer that you’ve got to worry about. Shoplifting is another costly threat that must be countered with the installation of a security system, mirrors, and other tools and these costs must happen before the store opens for the first time.
3. It takes a lot of effort to keep a convenience store clean.
People come in and out of convenience stores all of the time. They track in whatever is happening outdoors and this happens constantly. You are also required to maintain a clean environment to prevent contamination, which means a lot of your time is going to be invested into cleaning and janitorial work. You find out very quickly that customers can track in a lot of filth on days that are rainy and gray.
4. There will always be inventory losses.
Food products are going to expire, even if they are well-preserved. You can limit these losses somewhat by stocking snacks and drinks that have extended sell-by dates, but it can never be completely eliminated. Even when your customers are purchasing popular products on a regular basis, all it takes is one lull in the action to have an entire inventory purchase go bad on you.
The pros and cons of owning a convenience store show that the experience is generally positive for owners who are invested into their business. Caring about the people who frequent your store will give it a strong reputation in your neighborhood. Once you achieve that, you can begin building a foundation for long-term success.