How to Open a Convenience Store: Starting a Convenience Store Checklist (2024 Guide)

What Do You Need to Open a Convenience Store 

Opening a convenience store presents a promising opportunity in the thriving retail landscape, particularly in the United States where the industry has witnessed remarkable growth. In 2023, total sales in the convenience store sector soared to an impressive $859.8 billion, signaling significant expansion despite economic challenges such as inflation. 

One of the driving forces behind this growth is the surge in in-store sales, fueled by increasing demand for food service offerings like prepared food and dispensed beverages, which have become staples for on-the-go consumers. As convenience stores evolve to meet the changing needs and preferences of consumers, there is ample opportunity for new entrants to carve out a share in this lucrative market. 

Today, successful convenience store models operate in a hybrid fashion, seamlessly blending convenience with culinary excellence to attract a diverse customer base. In this guide, we will explore the steps involved in opening a convenience store and how aspiring entrepreneurs can leverage the industry's growth by adopting a hybrid approach that emphasizes both convenience and quality.

How to Open a Convenience Store: Your Complete Checklist

There are numerous nationwide and regional convenience store brands, so while the competition isn't as intense as in other industries, you still require a robust business concept to thrive. From securing the ideal location and suppliers to establishing a strong marketing presence, here's what you need to do to launch a successful convenience store.

Choose your concept

When opening a convenience store, considering different concepts can help tailor the business to the needs of its target market. A traditional convenience store concept typically offers a wide selection of everyday items such as snacks, beverages, toiletries, and basic groceries, with a focus on convenience and quick accessibility. A health-conscious convenience store might emphasize organic, natural, or healthier snack options, appealing to customers seeking healthier on-the-go choices. Alternatively, a specialty convenience store could cater to specific demographics or interests, such as a store in a college town stocking student essentials or a store in a tourist area offering souvenirs alongside typical convenience items. A technology-driven concept might incorporate self-checkout kiosks, mobile ordering, or even delivery services to enhance convenience for busy customers. By selecting the right concept, a convenience store can differentiate itself in a competitive market and meet the unique needs of its customer base.

Set up your business structure

In the US, businesses can choose from five business structures: Sole proprietorship, partnership, limited liability company (LLC), S Corporation, or C Corporation.

Smaller businesses tend to set up as an LLC, as it gives owners some flexibility while protecting them from legal or financial liabilities related to the business. As you open more locations, you may elect to change to an S Corporation or C Corporation for the tax benefits.

Write your convenience store business plan

Every business should have a business plan. This crucial document helps guide your business and communicates your vision to investors and other potential stakeholders. Your convenience store business plan should include:

• Executive summary: The executive summary lays out your vision and concept, including your convenience store’s mission statement, core values, and a brief discussion of potential costs, operational plans, and marketing plans.

• Company overview: This section covers important details about the business like ownership structure, location, and customer service ideals.

• Industry analysis: Convenience stores have a fair amount of competition and tend to cater to just a local neighborhood, which is why it’s crucial to understand the competition. This analysis demonstrates that you understand your target market and competitors, and have analyzed the potential of your convenience store’s location.

• Marketing plan: Good marketing plans change over time, but your business plan’s marketing plan will illustrate the broad strokes of how you plan to market your business. Discuss the channels you’ll use, from social media to print advertising, to build awareness of your business and how you want to represent your business in marketing materials.

• Operations plan: An operations plan details staffing needs, customer policies, technology, suppliers, expected costs, and more of the details that investors will want to know about how your business runs each day.

Finances, sales forecasts, and operating expenses

Your convenience store business plan will touch on some numbers in the operating plan, but you should also create a more dedicated financial plan. Work with an accountant you trust and who knows your business model. They’ll be able to help you get granular with fixed and variable expenses and know the general sales figures for the average convenience store.

When you know about how much it will cost to run your business every month, you can figure out item pricing, supplier relationships, and more details that will help you forecast sales. It’s important to understand exactly how much business you need to do each month to stay in the black and when you can expect to break even on your investment.

Figure out funding

The average cost to open a convenience store ranges between $50,000 to $100,000. You may not be able to do it out of pocket, in which case you’ll need funding.

Loans are a common option. Banks offer many business loans for aspiring business owners, or you could approach a friend or family member to help. With good credit and a strong business plan, you could lock in a favorable interest rate and loan terms. Still, taking on debt when you’re starting a business can feel restricting.

Some businesses turn to crowdfunding to get off the ground. Sites like Kickstarter and Indiegogo are good ways to build excitement about a project, especially if a town is really in need of a convenience store. Don’t expect to get everything you need to start the business, but a great crowdfunding campaign could give you a solid start.

Each funding options has benefits and disadvantages, so you’ll need to figure out what is right for you and your business.

Follow the legal requirements

Opening a convenience store involves navigating various legal requirements and obtaining the necessary licenses. These typically include a business license to operate legally within a specific jurisdiction, as well as permits for selling food, tobacco, alcohol (if applicable), and lottery tickets, depending on the products offered. 

Additionally, entrepreneurs must comply with zoning regulations to ensure the store is located in an approved area. Health department inspections and compliance with food safety standards are crucial for selling perishable items. If hiring employees, adhering to labor laws and obtaining an employer identification number (EIN) is necessary. It's essential for convenience store owners to research and fulfill all legal obligations to operate their business smoothly and avoid potential penalties or shutdowns.

Choose a location

Location is everything for a convenience store. They’re called convenience stores because they’re convenient for nearby residents. You want to be the one store everybody around goes to when they need a snack or a staple food item. While there may be limited real estate available, you likely have three options when choosing a location.

• Commercial lease: Most businesses lease an existing space. Convenience stores don’t need much in the way of specificity, so you can turn many commercial spaces into one. A lease may have some restrictions on what you can do to the property, but as long as you can put in refrigerators and freezers, plus any equipment you need to run the business, a lease is perfectly fine. You’ll save more money in the short term by leasing rather than buying.

• Buy a space: Many commercial spaces can be turned into a convenience store. Buying a space gives you greater flexibility over changes you want to make, but it’s also significantly more expensive than leasing. You’ll have to really hit the ground running and start hitting sales benchmarks to make your mortgage payments. But long term, buying could be a great investment.

• Building a location: Some businesses may opt to build a new location. Considering most vacant lots aren’t in the most convenient areas, this probably isn’t a good option for a convenience store. That said, new developments go up all the time, and leasing or buying commercial space in one could be a great way to build a foundation in a growing community.

Design your layout

Designing the layout of a convenience store to maximize sales requires strategic planning and attention to customer behavior. Begin by placing high-demand items like snacks and drinks near the entrance to attract impulse purchases. 

Utilize end caps and prominent displays to showcase featured products and encourage add-on sales. Organize aisles logically, with commonly purchased items positioned at eye level for easy access. Ensure clear signage and aisle markers for efficient navigation. Create designated areas for popular categories such as beverages, snacks, and household essentials, making it convenient for customers to find what they need quickly. 

Additionally, consider incorporating impulse-buy items near the checkout counter to capitalize on last-minute purchases. Regularly analyze sales data and gather feedback to continuously refine the layout for optimal results.

Choose your suppliers and vendors

Unlike independent grocery stores, most convenience stores don’t carry an abundance of specialty products. Convenience stores should appeal to the masses, so it makes sense to work with large food suppliers that can deliver brand-name snacks, frozen foods, and sundries.

That said, carrying local perishables like milk, produce, or meat is a good way to differentiate from the local 7-11. If people love a local pasta shop, carrying their prepared meals could be a great way to bring in customers.

Finding the right suppliers and vendors can save your business a lot of money, but it can also help you stand out from the competition.

Hire staff

To efficiently operate a convenience store, I would need to hire several key positions. First and foremost, cashiers are essential for processing transactions, providing customer service, and maintaining a friendly atmosphere. Additionally, stock clerks play a vital role in ensuring shelves are properly stocked, merchandise is rotated, and inventory levels are maintained. 

A reliable manager is crucial for overseeing daily operations, managing staff, handling administrative tasks, and ensuring the store meets its financial goals. Depending on the store's size and offerings, roles such as food service workers, maintenance staff, and security personnel may also be necessary to ensure smooth operations and a safe environment for customers and employees alike.

Create your marketing plan

While a convenience store may not require an extensive marketing plan like some businesses, having effective marketing strategies in place can be beneficial. The key to success lies in offering the items that meet the needs of the local community. Additionally, fostering a friendly and familiar relationship with customers is essential for understanding their preferences and providing excellent service. Since convenience stores typically serve the immediate neighborhood, building strong rapport with local customers is vital. Consider implementing a loyalty program as a way to reward and retain your most valued customers.

You probably don’t need a website or social media, but they can be fun ways to brand your business and communicate when you’re having sales or special offers on products.

Ultimately, for convenience stores, the best marketing strategy is being present and building trust with the neighborhood.

Plan your soft opening/grand opening

A convenience store probably doesn’t need to roll out all the marketing milestones like a soft opening or grand opening. That said, announcing your presence in the neighborhood with a sign, some light advertising in local media, and offering opening day discounts on certain products is a nice way to get people in the door.

There are many convenience stores out there, but what’s convenient to some isn’t convenient to all. Every neighborhood could benefit from a convenience store, so location is absolutely everything. Finding a nice storefront in a neighborhood that lacks a convenience store is the first step. This guide will help you with the rest of the process of opening a convenience store.

Licenses and Permits Needed to Open a Convenience Store

Opening a convenience store requires navigating various legal requirements to ensure your business operates within the law. The specific licenses and permits needed can vary depending on the location and nature of your business, but generally, you will need the following:

1. Business License

A business license is mandatory for legally operating a retail store. This license is obtained from the local city or county government. It authorizes your business to operate within the jurisdiction and ensures compliance with local regulations. The application process typically involves filling out forms with details about your business, such as its name, address, and type of business activities. You may also need to pay an application fee and renew the license annually.

2. Seller’s Permit

A seller’s permit, also known as a sales tax permit, allows you to sell products at the retail level and collect sales tax from customers. This permit is typically issued by the state’s Department of Revenue or Taxation. To obtain a seller’s permit, you need to apply through the state’s tax authority, providing information about your business, including its federal tax ID number (EIN), business structure, and estimated sales. This permit must be displayed prominently in your store and is usually free or requires a nominal fee.

3. Employer Identification Number (EIN)

An EIN, issued by the IRS, is required if you plan to hire employees. It serves as a federal tax identification number and is used for reporting employment taxes, opening business bank accounts, and filing business tax returns. You can apply for an EIN online through the IRS website. The process is straightforward and free of charge. Once obtained, the EIN remains with your business for its entire lifespan.

4. Zoning Permits

Zoning permits ensure your retail store location complies with local zoning laws. These laws regulate land use and determine which types of businesses can operate in specific areas. Before signing a lease or purchasing property, check with the local zoning office to ensure your retail store activities are permitted at the chosen location. You may need to submit a zoning application, site plans, and pay a fee. Approval may involve inspections and public hearings.

5. Certificate of Occupancy

A Certificate of Occupancy (CO) is a document issued by the local government that certifies a building's compliance with building codes and other laws, indicating it is safe for occupancy. This certificate is necessary for any new construction, renovations, or when changing the use of a building. To obtain a CO, you must pass inspections by building, fire, and health departments. This process involves submitting an application, scheduling inspections, and addressing any identified issues before approval.

Why Toast Retail is Perfect for Convenience Stores

In today's competitive retail landscape, selecting the right technology is essential for both new ventures and established businesses aiming for success. Solutions like Toast retail not only streamline operations, making them more efficient, but also provide invaluable insights to optimize the financial health of the business. 

By harnessing the power of point of sale technology, retailers can gain a competitive edge, improve customer satisfaction, and drive sustainable growth. Choosing the right technology sets the foundation for long-term success, empowering businesses to adapt to evolving market demands and thrive in an increasingly digital world.

The tech that redefined restaurants is now here to transform retail. Supercharge your store with the POS built for high volumes and complexity, offering everything you need to run your business on one platform. Toast's retail offering is a game-changer for businesses like convenience stores, liquor stores, and grocery stores, revolutionizing how they operate and interact with customers. Here's why Toast is the perfect fit for these retail environments.

1. Helps Modernize How You Sell

Toast's intuitive, cloud-based system simplifies daily operations. Its user-friendly interface makes staff training a breeze, ensuring seamless adoption across your team. Whether it's processing payments in-store or integrating with online sales channels, Toast ensures a smooth and consistent experience for your customers regardless of how they shop.

• Intuitive Cloud-Based System: Our intuitive, cloud-based system is easy to learn and easy to use. Say goodbye to complicated interfaces and hello to streamlined processes. Toast is designed to simplify your day-to-day operations, from staff training to consolidated operations, ensuring maximum efficiency and productivity.

• Seamless Payment Processing: Toast’s seamless payment processing easily integrates with online payments for smoother sales every time, no matter how your customers are shopping. This integration ensures a hassle-free experience for both customers and staff, leading to increased satisfaction and faster transactions.

• Flexible Order and Checkout Options: Offer flexible and efficient order and checkout options with reliable hardware including handhelds, kiosks, and guest-facing terminals. Adapt to the diverse needs of your customers and reduce wait times at checkout with Toast's versatile hardware solutions, enhancing the overall shopping experience.

2. Streamline Retail Management

Efficiency is key in retail, and Toast delivers with automated, mobile-first inventory management. Say goodbye to manual inventory tracking and hello to SmartScan, a feature that enables quick product scanning and shelf placement. Managing thousands of SKUs becomes effortless with Toast's intuitive product database and bulk update capabilities.

• Automated, Mobile-First Inventory: Experience the freedom of automated, mobile-first inventory management with Toast. Create and print barcodes in bulk, and take new products from scan to shelf in seconds with our SmartScan feature. Say goodbye to tedious manual inventory tasks and hello to streamlined operations.

• Efficient SKU Management: Easily manage thousands of SKUs with our intuitive product database and bulk updates feature. Modify, reprice, and import multiple products at once, saving valuable time and resources. With Toast, keeping track of your inventory has never been easier.

• Retail-Enhanced Dashboards: Stay on top of your business with retail-specific dashboards and cost-tracking reports. Monitor trends, maximize margins, and ensure your top-selling products are always stocked, empowering you to make data-driven decisions that drive profitability.

3. Tailor Your Customer Experience

Toast empowers you to tailor the customer experience to fit your unique retail concept. Whether you're considering adding food service or expanding your offerings, Toast's flexible platform accommodates creative expansion.

• Creative Expansion Opportunities: Thinking of adding food service to your retail concept? Including Kitchen Display Systems and Order Ready Boards, our flexible platform allows for creative expansion. Explore new revenue streams and enhance the overall customer experience with Toast's versatile features.

• Online Ordering and Delivery Integrations: Give your guests the option to order from home with Toast’s Online Ordering and our third-party delivery integrations. Meet your customers where they are and provide convenience that keeps them coming back, increasing customer loyalty and satisfaction.

• Loyalty Rewards and Personalized Offers: Be your neighborhood's favorite shop (and incentivize repeat visits) with loyalty rewards and personalized offers. Transform one-time shoppers into loyal patrons by engaging with your community and offering enticing rewards, making your store the go-to destination for your customers.

In conclusion, Toast's retail solution is more than just a point of sale system; it's a comprehensive toolkit designed to elevate your retail store to new heights. From modernizing sales processes to streamlining management and enhancing the customer experience, Toast empowers retail businesses to thrive in today's competitive market.

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