Interview with a Convenience Store Buyer
- Tony Popat
- IT Manager and Entrepreneur
- Key tips:
- You must be a people person
Be flexible - unseen challenges lurk around every corner
The two most important factors in running a successful convenience store are location and efficiency
- Typical price range of convenience stores for sale:
- $70k - $1m plus
What skills do you need to run a convenience store?
You need to be smiling and you need to be a happy person and get involved with your customers. Talk to them about their day-to-day things, their lives, and what’s going on. And then you need to connect what they told you with their face. Next time the customer walks into your door, ask them “How are your dogs doing?” “How is your daughter? Has she gone to college?”
You need to be happy, interested in people and able to talk to customers. So if you’re a friend to your customer, your friend will always come back to you. I think a friendly character is required in this business.
Secondly, you need to bring in all the merchandise that the customer wants. So, if a customer says, “I was look for this thing” and you don’t have that thing in the store, you need to note it down, and tell the customer exactly when to expect it.
You need to tell them exactly when the merchandise will be there.
A typical day or week like for a convenience store owner?
We open around 6am in the morning, and we close around 10pm in the evening. That’s usually Monday through Friday. Saturday and Sunday we are open a little late. Monday is a busy day. Tuesday is a little less and Wednesday is even less.
So it slows down mid-week. Friday is a very busy day, the busiest day of the week. Sunday is the slowest day of the week. It’s nearly dead because first half of the day people usually go to church.
You can just start with a smile on your face at the cash register. All the food and all the products are pre-packaged soda... so you just need to place them on the right shelf
Most attractive aspects of the industry.
The most attractive aspect of the convenience store industry is that it’s an easy entrance. You can get into the industry very easily with the least amount of investment. If you buy a business with a gas station it’s a little higher investment.
If it’s just a convenient store, just opening a store is really easy and really cheap. You can get in with $20-30,000 to start with and grow your business over a period of time.
Also, you don’t need any specialized skills like cooking or making anything. You can just start with a smile on your face at the cash register. All the food and all the products are pre-packaged soda, candy and chips so you just need to place them on the right shelf and make them easy, clean, accessible to the customers.
You can open multiple locations pretty quickly with the amount of revenue you’re getting.
The most challenging aspects of the convenience store industry
You need to be aware of competition. You need to make sure wherever you open your store that it’s not open against stiff competition in the region. You need to make sure you have a certain amount of distance between the other competitors in that region.
It depends on the population of the area, also. If it’s in a downtown area, you can have a store right on the next block and you will still get business because of the concentration of the population. But if you are far away in a remote area where population is scarce, and you open right next to each other, it would be tough for you to survive.
You need to make sure wherever you open your store that it’s not open against stiff competition in the region.
Do you need experience first?
I would say you don’t really need any experience to get into this business. You can just buy an existing business from someone and take training from him for a week or two weeks and you are good to go. So it’s fairly simple and easy to run the business but if you do have some prior experience it is an added advantage.
What kind of problems have you encountered?
I’ve encountered some issues with the gas supplies, so you need to keep a close watch on the stock that you have for gas. You also need to keep a close watch on the cigarettes you keep because these are the key things that customers are coming to your location for.
If they are looking for a specific brand and you don’t have it on a regular basis, they will stop coming to your location and go to another place where they will find that particular brand of cigarettes or gas.
If you are expecting your gas to run out, you need to place an order 24 hours in advance and be ready with the stock. You don’t want to run out of gas at the last minute, waiting for the truck to come in.
Long-term goals for your business.
I would like to have multiple locations and multiple branches of the same business. Eventually, I will probably give franchises to someone who is interested. So that’s the long-term goal.
How much could you earn?
I would say if it is an owner/operator convenience store, how much you earn depends on the location, the size of the business and how you are running it. It could range anywhere between $4-5 thousand a month on the lower side for a very small store and could go up to $20-30 thousand dollars a month at a strong location.
I would say you could make $8-10 thousand dollars a month on an average business if you are running it efficiently in a good location.
One piece of advice to potential convenience store owners
The one piece of advice that I would give to someone who’s considering buying a convenience store would be to look at your numbers. You need to be sure of your income after you balance your expenses.
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