Having a grocery store is a great entrepreneurial step. This type of business is one of the noblest in Mexico. However, it is also true that one of the main fears faced by enthusiasts of these businesses is related to profits, which leads to the question of whether a grocery store is profitable. Before we delve into it, let’s start by explaining the concept of profitability.
What is profitability?
According to Konfío’s financial dictionary, profitability is related to the benefits that are obtained or can be produced from an investment. It is a fundamental indicator to know and evaluate the economic situation of a business such as grocery stores.
Like other ventures, corner stores can generate good economic profits, however, profitability and sustained dividends do not come overnight. If there is no good management of the business, it is very likely that it will reach the point of bankruptcy and have to close.
That is why it is extremely important to know the factors that must be taken into account to periodically analyze the performance of the business, as well as what must be modified. Only in this way can we detect failures in time and correct them before it is too late and we lose our investment.
How to know if a grocery store is profitable?
According to the Institute for the Strategic Development of the Independent Retailer, A.C. , there are some reasons why you should know if a grocery store is profitable .
Helps avoid losing money
Many times grocery store owners have no idea that they are operating at a loss. This may be due to low sales and high business expenses. If we analyze the progress and operation of the store, from the records, we can analyze why sales decrease and create strategies to increase them: promotions, include new services, rearrange products, etc.
Do you know the net income of your business?
Second, it is extremely important to know the net profit, that is, how much profit the grocery store makes from each product it offers to customers. For this, the purchase price and the sale price are taken into account.
Identify if you sell the same you spend
In this same sense, there are businesses that work all the time on the breakeven point. What does this mean? Revenues are not reflecting profits, but neither are losses, that is, they are being maintained, but there is no room for growth.
You need an administrative record
According to IDEDI data, only 5% of the grocery stores registered in Mexico keep administrative records. This means that most small stores do not know how much they invest, when they sell, how much they spend on operating matters and what the net profit is. Knowing this information is crucial to knowing if a grocery store is profitable, in addition to being essential to comply with tax obligations.
You learn more about the operation
And, finally, many times we do not give importance to the administrative part of the store. Remember that if we don’t know our store numbers, we practically don’t know the store.
What can we do to make trading successful?
If you are thinking of starting a grocery business, probably the first thing you need to do is explore the location where you will open the business.
If you have already verified that the area is good because there is not much competition around, the second step is to think about the products that you are going to sell . We recommend starting with the sale of basic products: eggs, sugar, drinks such as soft drinks, snacks and toilet paper. Remember that at Comercial Treviño you can supply your grocery business with the best brands and at the best prices.
Once your little store begins to attract more customers, analyze who your customers are. Generally, these types of businesses have loyal customers who always go because they live nearby. Once you have identified who buys from you, analyze what products they consume so that you can incorporate them into your product catalog. The most important thing is to create loyalty with customers, that they know you and that you treat them well so that they always prefer to buy with you.
Get training as a retailer
Finally, it is very important that you should know how to choose the safe online grocery shopping by internet. Remember that your store needs a responsible and committed owner who follows a business plan that leads to success.
How to stock a grocery store?
When considering the items for our grocery store or grocery store, we must emphasize that the most important thing is to be able to satisfy your immediate needs. That is why you must have a wide variety of articles and define these according to the needs of the clients. Of course, at Tapscape you can buy all the products for your little shop.
A well-stocked grocery store will please and attract customers. Therefore, when making your purchases, you will realize that there is a wide variety of products with different prices and quality.
The difference between a large grocery store and a small corner store seems to be the assortment. But it is not only that, it is the prices and often the quality of what is sold. It is necessary to have in your grocery store the most used or most requested perishables. The grocery store should also have the right canned goods. In addition, the products with the most rotation should be highlighted, say soft drinks and snacks, which the more visible, the better they will sell.
The grocery store should also have an adequate assortment of personal hygiene and household cleaning items. That is, this level corresponds to purchases out of necessity, not impulse. The most important thing is to do proper planning through market research in the vicinity of your grocery store.