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How to Start a Supermarket Business
Buying and selling is what we all do everyday directly or indirectly, we ether sell product or sell our service to others just like a day job. For the purpose of this article, we would, be focusing on how to open a supermarket.
What is a supermarket?
According to oxford dictionary a supermarket is a large self-service store selling food and other goods. Definitely, it is products that are sold in supermarkets. If you have passion for selling, i.e retailing other peoples product, then it is better you startup your own supermarket chain.
Complete Model of the Supermarket Business
Factors to consider before setting up a supermarket:
HOT: Top 10 Fastest Growing Small Businesses In The World
- How much capital do I have?
- Where can I get goods to stock my supermarket?
- Where would I site my supermarket?
- How many staffs do I need?
- How much net profit do I expect daily?
- What commodities and products would I sell?
- How would I arrange my shelf?
- What machines do I need?
How much capital do I need to have to open a supermarket?
How much investment needed to start a supermarket in India or in my country? The answer to this depends on your financial ability but it would be better you start up with something that can at least get the supermarket ready and get a little quantity of goods.
If the supermarket I setup remaining just goods, then you can go to large-scale wholesalers for goods on credit, just ensure you keep to the time frame you agreed on for the payment, he or she would be happy to give you more if you follow the agreement you both have.
Where can I get Goods to stock my Supermarket?
These has been answered above but you can also get loan from a bank to startup a supermarket, but to do that, you must have a very good business plan you would show to the bank. But these days banks do not give loans without collateral, so if this option is what you are going for, you need to get one.
Where would I site my Supermarket?
This is a very critical question to the success of your supermarket business model. Things to have at the back of your mind before selecting a site;
Closeness to residential areas.
Because these people living in these areas are those that would buy form your supermarket.
Availability of another supermarket.
Because you don’t want to start with a supermarket and start with competition form already existing supermarket. If there is a supermarket stocking general household goods, you might decide to stock more of movies, and little of household good, expect you are ready to give either N5 discount from the normal selling price to attract more customers.
Availability of road:
This is very important, because if you want customers, your supermarket should be accessible.
How many Staffs do I need to manage a supermarket?
You need to determine the number of staff you need, if it is a mini supermarket you might need just one staff for a start but if you want to run a large scale supermarket, you need at least five to ten staff members. Also ensure you enlighten your staff on how to handle customers and how to keep account of sales and purchases.
How much do I expect daily much net profit?
This is very important, you set a business goal, for instance, in three months time, I would make a profit of N10,000 naira. You work towards it.
What commodities and products would I sell?
This has been talked about before, but in addition you stock goods that of high demand, you make more sells and more sells implies more profit.
What machines do I need?
When starting a supermarket business in Nigeria, It is important you have an automated machine for your cashier. But if you have a low capital, you can get a sales book for a start. Also CCTV cameras are important mostly for large scale retail supermarkets. Because loss to thief is the last thing you would want to experience.
Have you been thinking about starting a supermarket business but don’t know how to go about it? A common feature of an average street in any neighborhood has got to be the Supermarket.
Supermarkets play the important roles of being the supplier of last resort as well as fulfilling the need for convenience buying at short notice and even distance.
In times of economic boom or boon, you will discover that Supermarkets have always remained a stable form of investment, especially as it guarantees a steady flow of cash transactions.
So, are you thinking of starting a supermarket in your neighborhood? The following guides can be used as a template for opening one:
1. Secure an Accessible Location for the Store
Location is one factor that can determine the success or failure of your proposed supermarket business. Supermarkets are viewed as notable landmarks in the communities that they are situated in. This is because they provide everyday items that people need. You cannot view it in a different light.
In starting your supermarket business, select a location that is easily seen and reached by not only residents in your vicinity but also by people who stay outside your neighborhood.
2. Cultivate a Good Work Relationship with Wholesalers
There is a thin line between succeeding and failing at running a supermarket business. And that line is how you are able to offer discounted products and items to your customers. To achieve this, you will have to be able to buy your wares at discounted prices yourself, in order to make them affordable to your customers.
Depending on the level of interaction, you could receive the goods in trust for payment at a later date or you could make some part payment. Either way, your supermarket business will flourish, once you are able to secure the supply end for the business.
3. Have an Efficient Cash and Stock Inventory System
To successfully run a supermarket business, you will have to institute a robust accounting system for both your inventory flow as well as your daily cash earnings. This is important because a supermarket is usually stocked with numerous items, so you will have to top on with record taking, especially when you have staff under your employ.
In modern times, there are inventory management software you can incorporate into your business. In addition, you can deploy POS machines to enable you compute your daily cash inflows. An extra precaution that is gaining ground in the Supermarket business is the electronic tagging of your products, which is fed to a central database.
4. Engage Honest and Competent Staff
This point follows from the point 3 above. One of the major hurdles confronting the successful running of supermarkets is the activities of dishonest staff. A solution is to hire individuals that you can obtain recommendations is obtaining referees and guarantors, who will vouch for the integrity of the employee.
They may also be liable to foot any costs incurred by the misdemeanor of the said staff.
5. Sell Yourself
While is it true that a supermarket only stocks products and items for sale, it is also important that you cultivate relationships with your customers. Every so often, you and your staff should wear a smile, ask about the welfare of the customer and their family, accede sometimes to the odd request for a further discount and generally try to connect with everyone on a unique level.
Experience shows that people are much more drawn to the shopping experience more than the item itself. You will also be growing a list of life-long loyal customers.
6. Install Security Systems
As your supermarket business grows, it will be wise to invest in modern security systems and gadgets. Such equipment includes CCTVs, smoke detectors, burglary systems amongst others. With CCTVs placed around strategic areas like around the product shelves or the cash registry point.
While you want to run an open and friendly supermarket business, you must take into consideration the fact that the society still has rogue elements and you must insure against that.
7. Insure your Business
To successfully run your supermarket business, you will need to plan for the unforeseen. Such could include a fire outbreak, burglary, destructive behavior during protests, natural disasters or even the death of the you, the owner.
Planning for such unexpected events will entail procuring insurance coverage to mitigate such losses. Many insurance firms now offer a deluge of insurance services for traditional and more modern businesses.
A supermarket is an ideal venture to insure because of the daily turnover you generate and the total volume in transactions that is conducted in any given period.
Conclusively, it is important to register your supermarket business with the government before starting up but on the other hand you might startup and register latter, also, the backbone of every business is having a principle. Principles such as opening your supermarket on time and if possible on the same time every day, it would make your customers know you are available at a particular time every day.
Also, it is important you set goals that improve supermarket business, and work towards it, hard work pays. Also remember to stock products that are needed by your customers.
Download a sample business plan for supermarket:
Supermarket business plan template in pdf