For millions of people across Britain, the good old corner shop has a special place in our hearts. From buying sweets as a kid to picking up a pint of milk, many people have fond memories of their local corner shops, newsagents and off-licenses. But in an age of online shopping and food deliveries, how do you open a small store and make it a success?
Here we run through some of the steps you might want to take before you cut the ribbon on your brand new store.
Before you open your corner shop
Opening your own store can be an exciting journey, but it may not happen overnight. Here are some ways to get started.
Write a business plan
Your business plan is an opportunity to outline your vision for your shop. It can include information such as an executive summary, some details about your business and personnel, and how you intend to fund the new store. It can also be a way of attracting the attention of potential investors to get your idea off the ground.
Do your market research
Is there a gap in the market for your corner shop? Undertaking a competitor analysis could give you an insight into the successes and failures of similar shops in your chosen neighbourhood.
It’s worth thinking about the profile of shoppers in the surrounding location. For example, if there are high levels of disposable income locally, will you have a greater chance of selling luxury items? Equally, if you’re targeting customers in a neighbourhood where spending power is generally lower, will your corner shop offer suitably affordable items? Other factors like the proximity to schools (if you’re targeting parents or teenagers) and sustainable products (if the locality includes environmentally-aware residents) may influence your decisions about where to set-up-shop.
Obtain your licenses
Depending on which products you intend to sell over the counter, there are different licences, permits and registrations to consider. Try GOV.UK’s license finder to see what paperwork you require.
How much does it cost to open a convenience store?
Estimates vary as to how much it might cost to open a high street convenience store. At the higher end, research by quotemyenergy.co.uk put the cost of opening a retail business at £172,000 over the first year, including expenditure like staff salaries.
At the other end of the scale, research by Geniac estimated that the cost of setting up a business (in general) in the UK is £22,756 within the first year.
Either way, it’s fair to say that opening your corner shop or newsagent could incur a number of costs. Here are ten potential costs of opening a shop, but of course there may be some that we have not covered so you should always do your own research too:
- Shopfront signage
- Refurbishment, or basic fit-out
- Communications, such as telephone and broadband
- Renting your premises
- Utilities, such as gas, water and electricity.
- Business rates and other taxes.
- Security alarms.
- Business licences.
- Business insurance.
- Payment systems. For example, card machines (fees and eligibility criteria apply).
How do you take on a commercial lease?
Once you’ve got a basic plan in place to open your convenience store, you may wish to do some homework on how commercial property rentals work in the UK. There are different classifications for each type of business premises, and before you open-up, you will need to ensure your chosen property has the planning permission you require (though you can request that the classification is changed with your local authority).
Here are some examples of different planning uses, which may be useful for anyone looking to open a small store to note:
- A1 – retail premises including corner shops, newsagents, post offices and travel agents.
- A3 – premises where customers can buy and consume food and drink on-site, such as cafes and restaurants.
- A4 – drinking establishments, such as pubs and bars.
- A5 – takeaways where customers can order hot food to be consumed off-site.
Once you’ve identified a property you wish to rent for your corner shop, you will need to agree terms with its landlord on a lease agreement. You may also wish to seek the advice of a commercial property lawyer before you sign a contract – visit The Law Society to find a solicitor.
How to manage your store
Once you’ve got your feet under the table and celebrated your grand store opening, it’s time to relax, right? Well, not quite.
After setting-up-shop, what products will you sell? You may wish to work on a pricing strategy, freshen up your inventory as demand changes, and promote special offers to entice new customers.
What’s more, can you run the store by yourself or do you need another helping hand? Recruiting the right staff who excel at customer service could help you build a loyal customer base. But before assembling your team, you may wish to understand how payroll and business taxes work so you can budget accordingly.
Finally, you could think about setting up a website. Some high street stores offer click and collect services, where you can order online and collect in-store, while even delivery companies like Deliveroo and Uber Eats, (although there are other companies providing the same service so you should always do your research) are selling corner shop goods online.
This has been prepared by Tyl by NatWest for informational purposes only and should not be treated as advice or a recommendation. There may be other considerations relevant to you and your business so you should undertake your own independent research.
Tyl by NatWest makes no representation, warranty, undertaking or assurance (express or implied) with respect to the adequacy, accuracy, completeness, or reasonableness of the information provided.
Tyl by NatWest accepts no liability for any direct, indirect, or consequential losses (in contract, tort or otherwise) arising from the use of the information contained herein. However, this shall not restrict, exclude, or limit any duty or liability to any person under any applicable laws or regulations of any jurisdiction which may not be lawfully disclaimed.