Should I Buy a Convenience Store?
Investing in a convenience store can be a lucrative financial move, but there are many things to consider before taking the leap and purchasing your own. While many small businesses deal with the ebb and flow of consumer desire, convenience stores have maintained constant popularity in the United States. Due to their handy locations, quick bites, and inexpensive wares, customers consistently flock to both urban and rural convenience store locations. Many entrepreneurs have seen the opportunity of steady profits in convenience store acquisition, but what should a savvy investor know before getting involved with such an endeavor?
How Will You Finance Your Purchase?
Unlike other real estate endeavors, purchasing a convenience store means buying a business that is likely already profitable. In these cases, you’ll likely be able to secure a loan from a bank. In some cases, the seller may provide financing, known as seller-side financing or earn-out, which will allow you to make a small down payment then pay the rest over a predesignated set of time.
Choosing Your Location
Location is important for every business, but it receives top billing in convenience store considerations. While scouting location options, there’s a few things to keep in mind. First, make it a habit to drive by and check on the location at multiple times throughout the day. Depending on traffic and parking, customers may find a certain location too difficult to get to. Do morning and evening rush hours make it impossible for customers to access the store? It’s also important to take a look at comparable convenience stores. You can talk to the owner and find out important details about their experience, and receive advice before you make a purchase. It’s also important to consider the neighborhood in which you hope to buy. Convenience stores have historically been targets for a variety of crimes like theft, making it advisable to look for a location in a generally safe neighborhood. Take a look at BizBuySell convenience stores for sale and check out multiple locations before deciding.
Take the Shop for a Test Run
If you’ve got a particular store in mind, or even a few options, take the time to go in and be a mystery shopper of sorts. Examine the layout of the store, the cleanliness, and how it seems to be operating. Are the employees responsive and polite to incoming customers? Also use the employees’ knowledge of the store to your advantage. Ask them how they feel about the store and how it’s being run—every detail counts.
Licenses, Permits, and Regulations for New Stores
You’ll need to ensure you have all of the right permits and regulations in place. If you’re opening a new convenience store, you’ll be starting from the ground up. From zoning laws to permit regulations, there’s plenty to be concerned with. Selling alcohol is an important aspect of the business that you’ll need to assess; many convenience stores find that the sale of alcoholic beverages makes up a bulk of their revenue, but it can be costly to purchase a permit that allows for this sale. Buying a liquor license takes careful consideration, and often requires a great deal of financing. In popular areas, you could find yourself spending thousands upon thousands of dollars just for the opportunity to sell beer and wine in your store. Take your time before deciding, and consider both the benefits and advantages before applying for such a license. You’ll need a sales and use license from your state’s department of taxation. This will allow you to collect sales tax, then turn in this money to the department itself. You’ll also need specialty permits for selling lottery tickets, cigarettes and e-cigarettes, and gasoline if you so choose. It’s wise to speak with legal counsel before committing to this endeavor.
Buying a convenience store isn’t always a cut and dry business venture. There’s a lot to consider, so take these tips and facets into consideration before making a decision.