How to Start a Mini Supermarket
Shopping for essentials was and will always be a major priority for everyone. It can be vegetables, milk, bakery items or shopping for daily items like hand wash the shopping list and activity is inseparable from our daily lives. Earlier we used to visit separate shops to buy different items. But with changing times the shopping pattern and demands changed. Just imagine if today you have to visit 4 different shops to buy milk, soap, bread and rice what will be your reaction? Well, it will be of annoyance, and you will not like it. Today we have departmental stores and supermarkets catering to our daily essentials shopping requirements where we can buy all goods under one roof without roaming from one shop to the other. Along with supermarkets we also have few mini supermarkets which is a smaller premise than a supermarket but a larger one than a grocery shop. We can say a mini supermarket is a shopping destination which falls between a supermarket and a grocery store. It has fewer but essential range of daily need items preferred by a consumer. Though the range in a mini supermarket can be limited it stocks a range of items which are in demand but may not be common or popular with the supermarket consumer segment. They cater to the demands which may not be fulfilled by the larger supermarkets but are required by consumers on daily basis.
To start any business an entrepreneur needs to assess multiple factors. This assessment must ensure all aspects of the business to be established are studied and analysed. The essential factors must be chalked out effectively to help the business plan design to be effectively implemented. A mini supermarket business plan requires below factors to be considered
Location
Store Layout Finalization
Branding
Recruitment of Store Staff
Purchase Department & Supplier Finalization
SOP Design
Grocery management ERP Software
First quarter (next 3 months) marketing plan
Launch Preparation
1. Business Model
An effective business model is one which gives you clarity regarding the business services, product mix, marketing strategy and also the competitor differentiators. Most importantly business model must capture the planned overall functioning, must be comprehensive and detailed. While deciding to start a mini supermarket business plan or model the primary factor apart from capital investment is the area or location chosen to start the mini supermarket. As per your investment budget you need to check if the shop premise can be bought or needs to be taken on rent. Also the area rental rates must be studied to check ROI feasibility. Another point is this analysis will give you an insight regarding if you need additional capital and to what extent the same needs to be increased.
2. Location
The location is a major factor in the success matrix and a critical one. The choice for the same depends on various factors like area population, residential v/s commercial premises in the area, shopping trends, presence of local grocery shops / supermarkets and many more other criteria. You must also take into consideration the rent and property rates of the area. Depending on the same you can decide if the store premise can be bought else taken on rent. All these factors require a thorough research and help in making the right location choice.
3. Store Layout Finalization
The store layout is an important factor to be considered while creating a mini supermarket business plan. Well planned layout adds value to your enterprise and is a major contributor for high customer footfalls. A well designed layout includes convenience of shopping to customers which means sufficient moving space for multiple customers, shelf design done keeping in mind the products on offer and easy display, installation of safety device and equipment for loss prevention and safety and overall good ambience to make customers feel happy and attended. A nicely designed layout helps in increasing your brand value and also contributes to higher recall factor ratio amongst customers.
4. Branding
Branding is essential to increase the popularity of your mini supermarket amongst customers. While designing the store layout it is necessary to create store interiors which reflect the branding. If you are manufacturing your own goods the packaging must have the branding visible on the same. Standees in store, weekly branding events for customers are few examples which may help you build your brand. A correct branding strategy helps you in creating your unique place in the market and adds value to customer relationship management as well.
5. Recruitment
The primary requirement while creating your recruitment plan must be your organization structure. Your organization structure will depend on your store size and you will need to identify how many permanent and contract resources are required. Typical supermarket job roles are Store Manager, Cashier, Store Attendant, Store Cleaner and Security Personnel. You can advertise for recruitment in the locality where you plan to open the store. This helps in hiring local talent. Depending on your recruitment budget and cash flow availability you can also seek help of recruiting firms who specialize in retail recruitments to hire staff for your supermarket.
6. Purchase function & Finding reliable suppliers
Purchase planning is crucial to increase profitability. Once the product mix is finalized you need to chalk out the goods procurement strategy and shortlist vendors / suppliers. You as an entrepreneur will need to purchase goods from bulk or wholesale suppliers to save the buying cost. Creation of a purchase strategy is essential from the financial planning perspective too as you will need to create a contingency plan if any purchased goods are damaged and required to return or to be bought again. Next step is identifying reliable suppliers. While shortlisting vendors/suppliers you need to research on local distributor/ supplier segment in the area, relevant product suppliers who are in the area for your product mix, logistic and delivery teams of vendor/suppliers, etc. The main feature of any supermarket is the variety of goods which are on offer and it is fulfilled with the correct supply chain framework.
7. SOPs (Standard Operating Procedures)
An SOP gives clarity regarding daily operations of a business / company. A supermarket is an enterprise which comprises of multiple departments like Store Operations, Inventory Management, Purchase and Security who work together. Each of these department is important to create a successful mini supermarket. Each department is interlinked with another to run the daily operations. For efficient and smooth run of mini supermarket an SOP for each department is essential. Every departmental team and personnel must be aware regarding his/her key role responsibilities. Also clear responsibility of each department must be chalked out and shared with all staff. The above requirements of defining key responsibilities of each department and staff member are taken care of by creation of SOPs. Once a centralized SOP is created every team can refer the same and understand the daily tasks which they are required to carry out. An SOP needs to be dynamic and the owner / management team needs to revisit the same for any changes / modifications as required.
8. Grocery Store Management Software / ERP System
An ERP system designed for a mini supermarket has many advantages. First and major advantage is it is time saving. As daily functions are automated by the software you have time to look into other critical areas of business and do not require your attention for daily tasks. An ERP system automatically stores and tracks your financial transactions and help you in analyzing the profitability matrix. Accurate inventory management is another plus point of an ERP system as it tracks the inflow and outflow of goods purchased and sold. Lastly it helps you give better customer experience. ERP software captures customer data during each purchase and basis the same helps you identify your loyal customers. This enables you to help them earn redeemable points. Few ERP software also have bulk sms / email facility which allows you to share sms / emails regarding any special offer or sale event in the supermarket.
9. Marketing Planning for next 3 months
Along with planning for immediate time period it is essential for every entrepreneur to create a marketing strategy for next 3 months. This approach helps you to visualize long term profit goals and the steps which are required to be taken today to reach that goal. This 3 months planning will give you clarity regarding the financial, sales and profit strategies which you need to adopt to boost your brand value.
10. Launch Preparation
While creating the launch plan check for below points
a. Store interiors are complete and products to be offered are purchased and displayed on shelves.
b. Staff is hired and trained for the launch day
c. ERP systems (store operations, accounts, sales, inventory) are installed, checked and ready for operations
d. Identify the marketing mode (social media, print media, flyers)
e. Most important signage of your mini supermarket and entry façade must be ready to attract customers.
All the above points need to be considered as it will ensure the mini supermarket launches its operations successfully!
Why Your Retail Coach (YRC)?
YRC is a retail consulting firm offering a wide range of services to varied industries. As a consultant we help you set up your mini supermarket by providing advisory expertise in business operations, inventory management, marketing strategy, SOP creation, launch activities and IT / ERP integration.