Over the past 20+ years, we have helped over 3,500 entrepreneurs create business plans to start and grow their convenience store businesses. On this page, we will first give you some background information with regards to the importance of business planning. We will then go through a convenience store business plan template step-by-step so you can create your plan today.
What Is a Business Plan?
A business plan provides a snapshot of your convenience store business as it stands today, and lays out your growth plan for the next five years. It explains your business goals and your strategy for reaching them. It also includes market research to support your plans.
Why You Need a Business Plan
If you’re looking to start a convenience store or grow your existing convenience store you need a business plan. A business plan will help you raise funding, if needed, and plan out the growth of your convenience store business in order to improve your chances of success. Your convenience store business plan is a living document that should be updated annually as your company grows and changes.
Source of Funding for Convenience Stores
With regards to funding, the main sources of funding for a convenience store are bank loans and angel investors. With regards to bank loans, banks will want to review your business plan and gain confidence that you will be able to repay your loan and interest. To acquire this confidence, the loan officer will not only want to confirm that your financials are reasonable. But they will want to see a professional plan. Such a plan will give them the confidence that you can successfully and professionally operate a business.
The second most common form of funding for a convenience store is angel investors. Angel investors are wealthy individuals who will write you a check. They will either take equity in return for their funding, or, like a bank, they will give you a loan.
Venture capitalists will not fund a convenience store. Private equity firms (another type of equity investor) might consider funding a chain of convenience stores, once the initial store(s) are successful, but never an individual location.
Convenience Store Business Plan Template
Your business plan should include 10 sections as follows:
Your executive summary provides an introduction to your business plan, but it is normally the last section you write because it provides a summary of each key section of your plan.
The goal of your Executive Summary is to quickly engage the reader. Explain to them the type of convenience store business you are operating and the status; for example, are you a startup, do you have a convenience store that you would like to grow, or are you operating a chain of convenience stores.
Next, provide an overview of each of the subsequent sections of your plan. For example, give a brief overview of the convenience store industry. Discuss the type of convenience store business you are operating. Detail your direct competitors. Give an overview of your target customers. Provide a snapshot of your marketing plan. Identify the key members of your team. And offer an overview of your financial plan.
In your company analysis, you will detail the type of convenience store business you are operating.
For example, you might operate one of the following types:
- Traditional Convenience Store: the traditional convenience store is about 2,400 to 2,500 square feet in size and offer a product mix which includes dairy, bakery, snack foods, beverages, tobacco, grocery, health and beauty aids, confectionery, and perhaps prepared foods to go, fresh or frozen meats, gasoline, various services, and limited produce items. Most stores of this size have 6 to 12 striped parking spaces or some form of convenient pedestrian access. Hours are extended compared to average retailers with a large percentage open 24 hours per day.
- Mini Convenience Store: this type of convenience store is usually 800 to 1,200 square feet in size. Grocery selection and foodservice (beyond prepared sandwiches) is usually very thin. Open hours usually range from 18 to 24 hours.
- LImited Selection Convenience Store: this type of convenience store ranges from 1,500 to 2,200 square feet. They differ from the “mini convenience store” in a broader product mix and grocery offering (although still somewhat limited by traditional convenience store standards). Also, simple foodservice (hot dogs, nachos, popcorn, etc.) may be offered.
- Expanded Convenience Store: this type of convenience store is in the 2,800 to 3,600 square feet range. Such stores can accommodate more shelving for additional grocery products or room for significant fast food operations and seating.
- Hyper Convenience Store: this type of convenience store is very large (4k to 5k square feet), and usually offers an array of products and services arranged in departments. For example, such stores may offer variations such as a bakery, a sit-down restaurant area, or a pharmacy. Many of these locations do sell gasoline. The number of employees per shift can be large, particularly if a small restaurant is present. The number of parking spaces is substantial, especially since the amount of time the average customer spends in such an establishment can be significant.
- Kiosk: this type of convenience store is less than 800 square feet and is intended to provide some additional revenue beyond gasoline sales. Gasoline is always the focus of this operation with the owner usually being an oil company or petroleum marketer. The store sells only the fast-moving items found in traditional convenience stores (tobacco, beverages, snacks, and confectioneries).
In addition to explaining the type of convenience store business you operate, the Company Analysis section of your business plan needs to provide background on the business.
Include answers to question such as:
- When and why did you start the business?
- What milestones have you achieved to date? Milestones could include sales goals you’ve reached, new store openings, etc.
- Your legal structure. Are you incorporated as an S-Corp? An LLC? A sole proprietorship? Explain your legal structure here.
In your industry analysis, you need to provide an overview of the convenience store business.
While this may seem unnecessary, it serves multiple purposes.
First, researching the convenience store industry educates you. It helps you understand the market in which you are operating.
Secondly, market research can improve your strategy particularly if your research identifies market trends. For example, if there was a trend towards 24-hour convenience stores, it would be helpful to ensure your plan calls for plenty of staff.
The third reason for market research is to prove to readers that you are an expert in your industry. By conducting the research and presenting it in your plan, you achieve just that.
The following questions should be answered in the industry analysis section of your convenience store business plan:
- How big is the convenience store business (in dollars)?
- Is the market declining or increasing?
- Who are the key competitors in the market?
- Who are the key suppliers in the market?
- What trends are affecting the industry?
- What is the industry’s growth forecast over the next 5 – 10 years?
- What is the relevant market size? That is, how big is the potential market for your convenience store. You can extrapolate such a figure by assessing the size of the market in the entire country and then applying that figure to your local population.
The customer analysis section of your convenience store business plan must detail the customers you serve and/or expect to serve.
The following are examples of customer segments: commuters, truckers, families, senior citizens, etc.
As you can imagine, the customer segment(s) you choose will have a great impact on the type of convenience store business you operate. Clearly truckers would want a different atmosphere, pricing and product options, and would respond to different marketing promotions than families.
Try to break out your target customers in terms of their demographic and psychographic profiles. With regards to demographics, include a discussion of the ages, genders, locations and income levels of the customers you seek to serve. Because most convenience store businesses primarily serve customers living in their same city or town, such demographic information is easy to find on government websites.
Psychographic profiles explain the wants and needs of your target customers. The more you can understand and define these needs, the better you will do in attracting and retaining your customers.
Your competitive analysis should identify the indirect and direct competitors your business faces and then focus on the latter.
Direct competitors are other convenience stores.
Indirect competitors are other options that customers have to purchase from that aren’t direct competitors. This includes supermarkets, grocery stores, pharmacies, and drug stores. You need to mention such competition to show you understand that not everyone who needs to purchase a last-minute item frequents a convenience store to do so.
With regards to direct competition, you want to detail the other convenience stores with which you compete. Most likely, your direct competitors will be convenience stores located very close to your location.
For each such competitor, provide an overview of their businesses and document their strengths and weaknesses. Unless you once worked at your competitors’ businesses, it will be impossible to know everything about them. But you should be able to find out key things about them such as:
- What types of customers do they serve?
- What products and services do they offer?
- What is their pricing (premium, low, etc.)?
- What are they good at?
- What are their weaknesses?
With regards to the last two questions, think about your answers from the customers’ perspective. And don’t be afraid to stand outside your competitors’ locations and ask customers as they leave what they like most and least about them.
The final part of your competitive analysis section is to document your areas of competitive advantage. For example:
- Will you provide superior products?
- Will you provide products that your competitors don’t offer?
- Will you make it easier or faster for customers to acquire your products?
- Will you provide better customer service?
- Will you offer better pricing?
Think about ways you will outperform your competition and document them in this section of your plan.
Traditionally, a marketing plan includes the four P’s: Product, Price, Place, and Promotion. For a convenience store business plan, your marketing plan should include the following:
Product: in the product section you should reiterate the type of convenience store business that you documented in your Company Analysis. Then, detail the specific products you will be offering. For example, in addition to regular convenience items, will you offer items such as grab-and-go food, or fast food?
Price: Document the prices you will offer and how they compare to your competitors. Essentially in the product and price sub-sections of your marketing plan, you are presenting the product categories you offer and their price ranges.
Place: Place refers to the location of your convenience store business. Document your location and mention how the location will impact your success. For example, is your convenience store business located next to a heavily populated office building, or gym, etc. Discuss how your location might provide a steady stream of customers. Also, if you operate or plan to operate kiosks, detail the locations where the kiosk(s) will be placed.
Promotions: the final part of your convenience store business marketing plan is the promotions section. Here you will document how you will drive customers to your location(s). The following are some promotional methods you might consider:
- Making your convenience store extra appealing to attract passing customers
- Advertising in local papers and magazines
- Reaching out to local bloggers and websites
- Social media advertising
- Partnerships with local organizations (e.g., gym members get a free cup of coffee with each protein bar they purchase)
- Local radio advertising
- Banner ads at local venues
While the earlier sections of your business plan explained your goals, your operations plan describes how you will meet them. Your operations plan should have two distinct sections as follows.
Everyday short-term processes include all of the tasks involved in running your convenience store business such as serving customers, procuring supplies, keeping the store clean, etc.
Long-term goals are the milestones you hope to achieve. These could include the dates when you expect to serve your 10,000th customer, or when you hope to reach $X in sales. It could also be when you expect to hire your Xth employee or launch a new location.
To demonstrate your convenience store business’s ability to succeed as a business, a strong management team is essential. Highlight your key players’ backgrounds, emphasizing those skills and experiences that prove their ability to grow a company.
Ideally you and/or your team members have direct experience in the convenience store business. If so, highlight this experience and expertise. But also highlight any experience that you think will help your business succeed.
If your team is lacking, consider assembling an advisory board. An advisory board would include 2 to 8 individuals who would act like mentors to your business. They would help answer questions and provide strategic guidance. If needed, look for advisory board members with experience in convenience stores and/or successfully running retail and small businesses.
Your financial plan should include your 5-year financial statement broken out both monthly or quarterly for the first year and then annually. Your financial statements include your income statement, balance sheet and cash flow statements.
Income Statement: an income statement is more commonly called a Profit and Loss statement or P&L. It shows your revenues and then subtracts your costs to show whether you turned a profit or not.
In developing your income statement, you need to devise assumptions. For example, will you serve 100 customers per day or 200? And will sales grow by 2% or 10% per year? As you can imagine, your choice of assumptions will greatly impact the financial forecasts for your business. As much as possible, conduct research to try to root your assumptions in reality.
Balance Sheets: While balance sheets include much information, to simplify them to the key items you need to know about, balance sheets show your assets and liabilities. For instance, if you spend $100,000 on building out your convenience store, that will not give you immediate profits. Rather it is an asset that will hopefully help you generate profits for years to come. Likewise, if a bank writes you a check for $100.000, you don’t need to pay it back immediately. Rather, that is a liability you will pay back over time.
Cash Flow Statement: Your cash flow statement will help determine how much money you need to start or grow your business, and make sure you never run out of money. What most entrepreneurs and business owners don’t realize is that you can turn a profit but run out of money and go bankrupt.
In developing your Income Statement and Balance Sheets be sure to include several of the key costs needed in starting or growing a convenience store:
- Location build-out including design fees, construction, etc.
- Cost of equipment like display shelving, coolers / freezers, POS systems, etc.
- Cost of maintaining an adequate inventory
- Payroll or salaries paid to staff
- Business insurance
- Taxes and permits
- Legal expenses
Attach your full financial projections in the appendix of your plan along with any supporting documents that make your plan more compelling. For example, you might include your store design blueprint or location lease.
Additional Convenience Store Business Plan Tips
Many aspects of your business plan for a convenience store hinge on the choice of products for the store to carry. Certainly, this should be based on the customers you seek to reach with your store. Here are some other considerations that should go into the choice of the product line.
Level of Variety
With a high level of product variety (a broad product line), your store may be sought out by more customers who may find what they need more often, on average, leading to increased revenues. However, this benefit carries with it increased storage costs for the additional inventory that isn’t placed directly on shelves, especially items which sell fast. The storage costs include the rent for storage space or a storage room at the store and all of the labor associated with tracking and finding items in storage. There is also a need for more shelf space which may require more display units and even a larger store and higher rent. With more items to track and constantly restock, as well as the difficulty in projecting sales for a specific item, there is a greater chance of stocking out on any specific item. In those cases, hopefully you carry similar items that a customer might buy as a substitute.
With low variety (a narrow product line), the costs associated with stock-outs, storage, and shelf space are reduced somewhat. However, you will turn away more customers who cannot find the exact item they are seeking and will not accept substitutes.
Pricing For Convenience
Convenience stores, focused on quick purchases to fill a specific customer need, whether it is to change a light bulb or solve a sugar craving, offer their convenience in the form of a smaller store by pricing at a premium to what a customer would pay in a larger store like a supermarket, chain drug store, or hardware store. Customers are willing to pay 10% more for an item (or even higher), for example, to avoid a longer wait in line and longer travel time to reach the larger store.
In choosing the products to carry, you must examine the cost of purchasing in low quantities and make sure you can price high enough to cover the higher unit cost you will incur over what a larger store might. Products that are too expensive to buy in low quantities will not be feasible for this reason, as there is a limit to the price you can charge and expect to sell the product at.
Convenience Store Business Plan Summary
Putting together a business plan for your convenience store is a worthwhile endeavor. If you follow the template above, by the time you are done, you will truly be an expert. You will really understand the convenience store business, your competition and your customers. You will have developed a marketing plan and will really understand what it takes to launch and grow a successful convenience store.
Finish Your Convenience Store Business Plan in 1 Day!
Don’t you wish there was a faster, easier way to finish your convenience store business plan?
With Growthink’s Ultimate Business Plan Template you can finish your plan in just 8 hours or less!
Click here to finish your convenience store business plan today.
OR, Let Us Develop Your Plan For You
Since 1999, Growthink has developed business plans for thousands of companies who have gone on to achieve tremendous success.