Starting a Grocery Business

by Othman Hamed
(Columbus, OH, Franklin)

I wish to start a small grocery store in Columbus, OH

It hard to find an affordable existing grocery store to buy. I am leaning towards finding a space for rent and convert it to what I have in mind.

Is this idea viable?

Are there landlords who could agree on space conversion to a store. Is this cheaper than finding an existing store which can cost a bundle?

I appreciate your advice. Beer sales are possible. Lottery is probably not.

YOUR ANSWER

It is certainly possible to start a grocery business from scratch, but I can't really say whether it will be cheaper than buying an existing business or not.

There is a considerable amount of work involved in starting any business from scratch, from locating and re-modelling a retail space, to locating suppliers and buying your inventory.

Unlike an existing grocery business, a new business will have no existing customers so it will be quite a while before you can count on a steady income stream from the business. So it may be cheaper in the short term, but you will need more working capital to keep the doors open until you have built up a customer base.

As for your premises, some landlords are prepared to provide assistance with refitting stores to suit the needs of a prospective tenant, but you will pay for their assistance in one form or another. They may factor the cost of the refit into the lease cost, or require you to sign a longer lease before they are prepared to invest in your business.

Before you make a decision about building a business versus buying one, I suggest you do a bit of research. Talk to real estate agents about the type of retail accommodation that is available in your area and what the lease terms are likely to be. You should also ask about any commitments for outgoings (rates, utilities etc) that you would be responsible for.

Talk to local contractors to get an idea of the cost of refitting a shop and do an initial scan of likely suppliers for your store.

You will also need to find out how much you would need to spend on shop fittings, shelving, display units etc. You might find that when you add up the costs for everything you need to purchase to set up a store and factor in the need for a higher level of working capital to tide you over until you are making a profit, that the price being asked for an existing business (with an existing income stream) no longer seems so unreasonable.

Once you have identified a few potential sites for you new business might also be a good idea to do a bit of market research to find out whether the area can support another grocery store. Will you be able to find enough customers to make a profit from your sales?

The people in the area where you want to start your grocery business must already be buying their groceries from somewhere, what are you going to offer them that is better?

Why will they change their buying habits and start to buy their groceries from you?

How will you let them know what you can offer them?

There is a lot of work involved in starting a business from scratch and most of it needs to happen before you open your doors. To give you some idea of what is involved check out the page on the the steps involved in starting a small business.