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How to Start a Grocery Store in the U.S

Vincent Nyoike
Vincent Nyoike SMEs US

Grocery store is a profitable business in the U.S. There is a high demand for grocery products, while the supply for organic grocery products is low. Most of the foods are manufactured and getting fresh groceries, you need to cough some cash. When starting a grocery store, focus mainly on organically grown vegetables since they fetch more revenues in the market. This is how you can start a profitable grocery store in the U.S.

Plan Your Grocery Business

Planning a business before launching one is a great way to succeed. It helps you to map out your business needs and opportunities. When planning your business, you need to determine startup costs, target market, pricing, suppliers and business structure. You can start a sole proprietorship, partnership, or a limited company grocery. It will also help you determine if the business is profitable by calculating revenue projections.  

Find a Grocery Business Location

You need to find a good business location to generate enough revenues. You can start a grocery in a major city or a small town. Make sure that your business location is accessible and has high on foot traffic. It is also best that you find a business location with businesses related to your niche like a restaurant, or a bakery. However, do not set up your business next to another grocery store. You may face stiff competition from the already existing business.

Register your Business

You must register your business before you can start operations. Otherwise, you will find yourself in trouble with the law. First, you will need to register your business name. Once you have registered your business name, check with your local governing authority about business licenses you need. At the minimum, you need the following:

  • Employer Identification Number (EIN). If you plan to employ an employee, then you need to apply for EIN to ensure that you remit their tax deductions.  
  • Business licenses. All the States in the U.S requires all business to have business licenses. Their charges differ from one state to the other. Please check with your local authorities.

Read more: How to register a business in the U.S. 

Find Grocery Suppliers

You need to find suppliers for your business inventory. Make sure to source your grocery inventory from wholesale suppliers in the market. Make sure that the supplier is authorized and is reliable. You do not want a supplier who will supply products late leaving you without inventory. Some suppliers do not provide transport services and in such case you may need to organize how to collect the groceries. By transporting the groceries by yourself, you can end up saving a lot of money.

Market and Advertise Your Grocery Store

After securing business licenses and insurance, you can start promoting your grocery business. You should start advertising right from your store. It means that you need to store your groceries well so that they cannot spoil. Also, make sure that your inventory is well displayed on the shelves and look neat.

You can promote your grocery by installing a signage or a poster outside. If you can have social media presence like a Facebook page or Instagram account for your business, it will do you good. You can also set up a website for your business where you can publish your business products and services. Also, look for business directories and place an advert for your business.

Most grocery stores rely on customer referrals. It works well for them, but you must be selling high-quality products and also have excellent customer service. Consistency will make customers recognize your store and refer other customers to your grocery.

Read also: How to start a photography business in the U.S. 

Cost of Starting a Grocery Store in the U.S

The cost of starting a grocery depends on business location and size. To start a small grocery business, you will need at least $350,000. The figure includes the cost of renting out a store, buying equipment and fixtures and sourcing inventory. The following is the startup capital breakdown.

  • Rent - $100,000
  • Inventory - $160,000
  • Equipment - $ 20,000
  • Licenses and insurance - $10,000
  • Salaries - $3000
  • Furnishing - $5,000

Necessary Equipment for a Grocery Store

When starting a grocery store, you need the following equipment:

  • Freezers for storing perishable vegetables
  • Shelves for display products
  • Carts and baskets for shopping
  • Cash register that can accept credit card payments

Read also: How to start a coffee shop in the U.S.

Is the Grocery Business Profitable in the U.S?

A grocery store is a profitable business in the U.S. However, the price of grocery commodities keeps on fluctuating, and so are the revenues. It depends on the time of the year and the availability of commodities. At the minimum, you can make a 5% profit from your grocery store.