How much money does a convenience store owner make

This can translate into healthy profits for your small business, provided you’re serving the needs of your customers, controlling your costs and pricing your goods appropriately. Add the sales revenue your convenience store generated from your primary revenue sources for the accounting period in question to calculate your gross sales. Subtract the amount of any refunds you gave to customers as well as your cost of goods sold from your gross sales to calculate your gross profit. Cost of goods sold represents the amount mnoey paid for the merchandise you sold during the period. Total your operating expenses for the period to determine your total operating expenses. These are the expenses necessary to run your ownsr business, such as rent, utilities, wages, repairs, maintenance and insurance. Subtract your total operating expenses from your gross profit to figure your operating profit. Add the income you earned from sources other than from selling your ownef merchandise to your operating profit. Subtract the interest paid to creditors, income tax moneey and any other non-operating expenses from your result to calculate your net profit after taxes.

Incomes by State or District

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Incomes and Qualifications

)}Profit margins on gasoline sales are razor. Indeed, some gas stations are losing money on credit card sales, once the fees are factored in. How do they stay in business? More and more a gas station’s bread and butter is, well, bread and butter — and the coffee and candy bars it sells in its convenience store. Most of these items generate much higher profits than gas. Increasingly, a station owner’s biggest challenge is convincing drivers to step inside the store after they gas up. Jeff Lenard, spokesman for the National Association of Convenience Stores, estimates that gasoline accounts for 70 percent of a how much money does a convenience store owner make station’s revenues, but only 30 percent of its profits. Paul Fiore, executive director of the Service Station Dealers of America, a trade association for auto repair shops, said the mix is about the same for service stations. Low profit margins are squeezing companies along the length of the gasoline supply chain, from the biggest refiners to the smallest corner stations. Contrary to popular belief, 95 percent of gas stations in the U. Crack spreads, the difference between what refiners pay for crude and get for the gasoline they make, have gone negative on some days in recent weeks. That means that in those cases, refiners were losing money making and selling gasoline. Oil’s rise has been driven by investors snapping up crude futures as a hedge against a falling dollar and inflation. But while gas prices have tried to keep pace, demand for gasoline has fallen, limiting refiners’ pricing power.⓬

Trouble Ahead?

Business Ideas Tool. You have found the perfect business idea, and now you are ready to take the next step. There is more to starting a business than just registering it with the state. We have put together this simple step guide to starting your convenience store. These steps will ensure that your new business is well planned out, registered properly and legally compliant. A clear plan is essential for success as an entrepreneur. It will help you map out the specifics of your business and discover some unknowns.

Convenience Store Profit Margins Get a Boost from Food Sales

Increase profits by hiring skilled labor and focusing sales efforts on items with higher margins. Convenience stores are on a roll. In , acquisitions contributed to strong growth among the largest retail chains and overall sales notched upward by almost nine percent — a respectable growth spurt for a mature industry. Nevertheless, there could be trouble ahead. According to a industry report, , convenience stores are operating in the U. Profit margins, however, are typically thin in the food industry, and convenience stores are no exception. The divergence between large retailers and small, single-store operators is wide. The National Association of Convenience Stores noted that in , the number of convenience stores declined 1. This marks only the fourth time since that there’s been a decline in the overall number of stores. Convenience store executives note that the post-recession increases in gross sales have come with the improving financial condition of the industry’s core customers. Some feel that emerging business conditions may spell trouble ahead for the industry. Although sales have risen dramatically in the post-recession environment, employee wages have steadily increased by eight to 10 percent annually, and employee turnover, which is always high, hovered around percent in — a symptom of the improving job market. Another trouble spot may be the industry’s dependence on gasoline and tobacco sales. Both industries may be threatened, tobacco by the now widely recognized medical costs of tobacco use and its subsequent increasing governmental regulation, and gasoline by electric vehicles.

Start a convenience store by following these 9 steps:

Fluctuating gas prices and a hypercompetitive market means gas stations are also convenience stores where drivers pump gas, get their oil changed, grab a soda, a slice of pizza, a package of double AA batteries and a bag of chips for the road. As of July , less than 1 percent, or just stores, were still owned by one of the five major oil companies. The old school, gas-and-go stations are a thing of the past. Because inside sales are so important to profitability, newer stations are being built on at least 2 to 2. With its extreme volatility, fuel retailing is not for the faint of heart nor for those with limited access to capital. Since , overall demand for fuel in the United States has increased, and the total number of fueling locations — all convenience stores selling fuel, as well as gas-only stations, grocery stores selling fuel, and marinas — has decreased from more than , to a little more than , sites. After credit card fees and other operating costs, net profit for gasoline sales averages 3 cents a gallon, according the NACS. Contrary to what most consumers think, higher gas profits do not mean higher profits for individual station owners. When fuel prices shoot up, and drivers suspect price gouging, stations barely break even and may even lose money. When prices go down , drivers stop shopping for the best prices and fill up their tanks instead. They also have more money to spend at convenience stores. How much money a gas station can actually earn is dependent on a number of factors. A well-run gas station in a prime area will typically do well and generate a profit.

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Starting a hos store, just like starting any other business, takes money, planning, and time. Convenience stores are in demand all over the world, making them a good business to get. With the right location, items in stock, and pricing structure, you can start turning a profit quickly after opening your convenience store. Read on to learn how to start maoe convenience store of your.

To start a convenience store, consider buying into a franchise that already exists so you have access to their marketing, advertising, and other logistical support.

Or, you can try starting vonvenience own convenience store from the ground up. Whichever route you take, you’ll need to secure funding for your startup costs, which can range from tens of thousands to a million dollars.

If you need help maek your convenience store, apply for a small business loan or try to find an investor. Also, howw need to obtain the necessary licensing, permits, and insurance before you can open your business.

To learn how to set up and staff a convenience store, scroll down! To create this article, 23 people, some anonymous, worked to edit and improve it over time. Together, they cited 8 references. Categories: Business by Industry Starting a Business. Log in Facebook Loading Google Loading Civic Loading No account yet?

Create an account. Edit this Article. We use cookies to make wikiHow great. By using our site, you agree to our cookie policy. Article Edit. Hoq why people trust wikiHow.

It also received 18 testimonials from readers, earning it our reader-approved status. Learn more Decide whether you want to start your store from the ground up or buy into a franchise. A lot of money will be required in either case, but franchising may be easier in terms of marketing, advertising, and other setup tasks. You will likely have to pay a franchising fee out of your profit, but this may be considerably easier than doing everything on your.

Develop your business and mucy plans, regardless of whether you are opening your own convenience store or a franchise.

Though it may be slightly different for a franchise in that you don’t need your own marketing ideas and you have business practices outlined for you, these documents will typically help you secure funding if you need to take out a loan.

If you don’t have them at all, you may run into difficulty securing the required capital. Create a business plan by listing the name des business structure sole proprietorship, limited partnership. You can then continue by listing the items and services you plan to offer and the conveniecne startup costs for those moey and services. For more information, see how to write a business plan and how to write a business plan for a small business.

Develop your marketing plan by first analyzing your local competition and customer base. Census for this information or contact your local branch of the US Small Business Association for assistance.

Continue your marketing plan by analyzing the overall convenience store lwner and then oowner a plan for advertising, signage, and retention of customers. For more mae, see how to create a marketing plan. Plan out details of when your business will be open and where it will be if known. Sstore a budget for startup costs. This will largely depend on the cost of real estate in your area and what service and items you plan to offer. Secure the required funding. Chances are, you won’t have enough funding just lying around to cover your startup costs.

This means that you will have to take out a loan to start your business. The Small Business Administration offers a variety of loan solutions to help new owners get their business started. Obtain the necessary licensing, permits, and insurance required to run your mych.

Make sure you are in compliance with all local, state, and federal guidelines. The insurance will protect you from theft as well as help provide worker’s compensation if an employee is hurt on the job. At the very least, you will need hod sales and convenienve license from the state department of taxation in order to collect sales tax on items sold.

If you sell any other regulated products at your store, like alcohol, cigarettes, lottery tickets, or gasoline, you will need additional licenses, as required by law in your state. Requirements for permits and insurance also vary by state. Check with the Stofe Business Administration in your state for dos information. Secure your location. Location is everything in convenience stores.

As the jow implies, they should be convenient to get to. Stores off the beaten path may have a stronger local customer base because people don’t want to go all the way to the grocery dows, while stores near the highway typically get traffic from travelers who are not as familiar with umch area. Ideally, a convenience store is highly visible and must have either convenient parking options or a large amount of outside foot traffic like in conveniwnce transportation terminal, mall, or office complex.

These reports are generally too expensive for small business owners. Purchase any necessary equipment for your store. You will need a security system with cameras and alarms, a cash register, coolers for drinks, shelves, and a credit card processing machine. If you are using an established store, you may not have to purchase all of this equipment.

If you are providing any specialized services or products like lottery tickets or printing services, you will also need to purchase the necessary equipment. Get your location inspected. Before you start doing business, you will need to have your storefront inspected by the state department of health and the local fire department. This is required before you can legally begin conveenience operate your business. Contact the required agencies for more information and to schedule an inspection.

Establish relationships with suppliers. You’ll need wholesalers to supply you with the goods you owne sell, which include food and drink items, cigarettes, alcohol, paper and household goods, and fuel.

You’ll have to decide whether or not to use a full-service wholesaler, which may require larger order sizes, or several limited-function wholesalers, which may be more expensive and means additional for you.

Both have their pros and cons, so consider the needs of your business before deciding. Another option, especially if you run a small store, is to get your supplies from a price club store, like Costco or Sam’s Club. You will be responsible for picking up and shipping the items yourself, but you may save money this way.

Stock the store accordingly. Lay out your store shelves, and stock them with items. Use a method that will make ordering and restocking easy.

Place your higher-priced or easy-to-steal merchandise within view of the clerk and a security camera. Consider who your primary customers will be and adjust your offerings accordingly. For example, if you are in a residential area, conveience would be beneficial to stock necessities like milk and bread so that locals will not need to go all the way to the grocery store.

Alternately, a store surrounded by business will likely need to focus more on providing good coffee and breakfast. Hire employees. You need trustworthy employees in this business as you could stand to lose both money and merchandise.

Be thorough in your interview, check references, and consider background checks and drug testing. Open the store woner business! Consider doing a grand opening with banners and special deals to attract customers.

For example, you could offer free coffee to the first customers. The most important thing is to get the word out and get customers in bow door. How much cash is needed to open a store from the ground up with 3, square feet?

That depends on many factors, starting with whose 3, square feet of property you’re purchasing and where it’s located. They could be nice and let you off cheap or if they know you’re desperate they can amke the price.

Then the size and type of building will affect the cost to build, and if you need to purchase a lot of equipment that will also raise the start-up costs. Yes No. Not Helpful 3 Helpful Keep a log book to keep track of supplies, purchases, income, debts. Make sure you’re not vulnerable to theft, and be alert about everyone in the store.

Be nice and courteous to customers since you’re the only worker there and the representation of the service. When you have difficulty doing something, don’t be afraid to ask help from someone or hire. Not Helpful 1 Helpful Not Helpful 9 Helpful Starting, buying and running a convenience store can carry a hefty price tag.

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Breaking Down the Numbers

)}By: Debbie Simurda. Published Mar 5, As owners keep an eye on shifting market trends, they see an opportunity to improve their convenience store profit margins by offering a wider, healthier selection of food options. Once viewed as a second-rate meal, c-stores are quickly becoming the new place to showcase local and fresh food. Stote 3. Major players like Wawa, Sheetz, 7-Eleven, and Circle K are beefing up the food service aspects of their business, offering a wider variety of options ranging from built-to-order hot items to grab-and-go eats for diners on the run. The idea that the food you can buy conveniejce a gas amke is of lower quality and less healthy has gone to the wayside for Millennials and Generation Z, paving the way for c-stores to make a play in the restaurant game. Not only that, but consumers are open to food and refreshments anywhere, anytime they want, which conveniently makes convenience store food the perfect solution.⓬