Growing your business
How To Expand Your Convenience Store Business
While some convenience store success is down to the likes of Tesco and Sainsbury’s opening small city centre shops, the signs are that the decline in independent stores is slowing. Small business retailers have adopted strategies of aligning new products with their customers’ needs and offering services such as parcel pick ups and drop offs. It’s little wonder that a good number of members of the Association of Convenience Stores operate Post Offices within their shops.
Riding the Convenience Trend
There’s no reason why independent convenience retailers can’t expand their operations by opening another store in a different part of town or another location altogether. However, apart from finding the right site, putting together the Small Business Financing to launch the store is the biggest challenge facing ambitious retailers.
Location is obviously a huge factor in the purchase price of any convenience store purchase. You may think that you’ll pay about the same as you did for your first store but, while these kinds of businesses may look very similar, they can actually have up to a 50% price difference because of where they’re located. The surrounding area and the level of competition are big influences on how much you will be asked to pay.
According to those in the know, convenience store entrepreneurs are currently being asked by banks to provide up to half of the purchase price if they want their small business loan to be approved. This provides something of a dilemma for those who want to expand. If most of your cash is tied up in your existing store, how can you fund the purchase and the working capital to stock the store?
Fortunately, the unsecured business finance market has more options than it previously had. Business Cash Advances are designed to offer a more flexible funding vehicle, allowing you to repay through a set percentage of your debit and credit card sales. This means that you can use the trade that you have built up in your existing small business to finance the new store.
Other avenues to pursue could include peer-to-peer lending, crowdfunding and borrowing against personal assets. When considering different types of borrowing, the factors to consider include the ease with which you can apply, the speed of the process and the likelihood of the loan or funds being approved.
Reacting to the Red Tape
Another issue that owners of expanding convenience store businesses face is the red tape that goes alongside opening a new shop. While you’ll be familiar with the process from your first store, Talking Retail’s website reported this summer that local community groups and planning red tape are affecting ambitions to convert buildings into convenience stores and other small businesses.
If you face this kind of problem, it’s important to get engaged with the local community and emphasise the benefits that your proposed store will offer. These will not only include the convenience factor and services, but also new jobs. If you can get local people on board, the chances are that you’ll avoid potential delays of up to six months.
Of course, buying an existing convenience store will reduce these problems significantly. The decision on what’s best for your business will come back to that all important factor – location, location, location!