Convenience Store Business Plan
If you want to start a convenience store or expand your current business, you need a business plan.
The following sample business plan and template gives you the key elements to include in a winning business plan. It can be used to create a convenience store start up business plan or a plan to grow your existing business.
Convenience Store Business Plan Example
I. Executive Summary
Business Overview
[Company Name] is a 24-hour convenience store in [Location]. It serves nearby schools, residential communities, and commercial and business establishments with daily needs like pre-cooked meals, snacks, pastries, and beverages like coffee, milkshakes, and canned and bottled drinks. Aside from food and drinks, a limited range of household goods, groceries, over-the-counter medicine, magazines and newspapers are available at the store.
Aside from the 24-hour service, [Company Name] will offer a delivery option, in which customers can call in their orders for home delivery. They can also choose to pick-up their orders at a specific time and date. This takes the store’s ‘convenience’ to the next level.
Products Offered
These are the products that [Company name] will offer to consumers:
- Pre-cooked meals
- Bread or Bakery products
- Personal Care
- Snacks
- Beverages
- Canned or Jarred Goods
- Dairy
- Cleaners
- Over-the-counter medicines
[Company Name] convenience store also offers delivery and pick-up services for its customers.
Customer Focus
[Company Name] will primarily serve the residents who live within the city. The demographics of these customers are as follows:
- 302,154 residents
- 189,741 workers
- Average income of $51,000
- 39% married
- 40% in Mgt./Professional occupations
- Median age: 38 years
Management Team
[Company Name] is led by [Founder’s Name], whose family has run retail stores for more than 30 years. In addition to his extensive experience running convenience stores, he graduated from the University of ABC where he majored in Business Administration. [Company Name]’s management team includes an assistant manager that is also a Business Management graduate with experience in running a small business.
Success Factors
[Company Name] is uniquely qualified to succeed due to the following reasons:
- The area is in need of a 24-hour convenience store
- The location is in a high traffic with significant numbers of passersby each day.
- The management team has a track record of success running convenience stores.
- Convenience stores are highly successful in communities throughout the United States.
Financial Highlights
[Company Name] is seeking total funding of $420,000 to launch its convenience store. The capital will be used for funding location build-out, hiring initial employees, marketing expenses and working capital.
Specifically, these funds will be used as follows:
- Store design/build: $220,000
- Working capital: $200,000 to pay for Marketing, salaries, and inventory costs until [Company Name] reaches break-even
Top line projections over the next five years are as follows:
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|
| Revenue | $200,000 | $300,000 | $400,000 | $500,000 | $600,000 |
| Total Expenses | $176,390 | $230,030 | $250,431 | $261,901 | $273,920 |
| EBITDA | $23,610 | $69,970 | $149,569 | $238,099 | $326,080 |
| EBIT | $23,610 | $69,970 | $149,569 | $238,099 | $326,080 |
| Interest | $0 | $0 | $0 | $0 | $0 |
| PreTax Income | $23,610 | $69,970 | $149,569 | $238,099 | $326,080 |
| Income Tax Expense | $13,344 | $19,409 | $52,349 | $83,334 | $114,128 |
| Net Income | $10,266 | $50,561 | $97,220 | $154,764 | $211,952 |
II. Company Overview
Who is [Company Name]?
[Company Name] is a 24-hour convenience store located at the center of [Location]. It serves nearby schools, residential communities, and commercial and business establishments with pre-cooked meals, snacks, pastries, and beverages like coffee, milkshakes, and canned and bottled drinks. Aside from food and drinks, a limited range of household goods, groceries, over-the-counter medicine, magazines and newspapers are available at the store.
The store focuses on providing the daily necessities of commuters, office employees, and students. It is strategically located at the busiest street of [Location] city so it is easily accessible to its target market.
Aside from the 24-hour service, [Company Name] will offer delivery services, in which customers can place orders for home delivery via phone or on the website. Customers may also choose to schedule pick up orders. This takes the store’s ‘convenience’ to the next level.
[Company Name]’s History
[Company name] convenience store is owned and operated by [Founder’s name]. [Founder’s name]’s family has owned and operated retail stores for [x] years. This industry experience coupled with his Business Administration degree from [University], makes [Founder’s name] an expert in running convenience stores. He also has extensive knowledge of buying and selling goods, making him the ideal candidate to open a new store.
Since incorporation, the company has achieved the following milestones:
- Found store location and signed Letter of Intent to lease it
- Developed the company’s name, logo and website
- Determined equipment and inventory requirements
- Began recruiting key employees with experience in merchandising
[Company Name]’s Products/Services
These are the products [Company name] will offer:
- Pre-cooked meals: pasta, pizza, sandwiches, noodles
- Bread and Bakery products: bread, cake, bagels, dinner rolls
- Personal Care: shampoo, shaving cream, soap, hand soap
- Snacks: chips, nuts, chocolates, candy, ice cream
- Beverages: bottled water, canned drinks, coffee, tea, juice, soda, wine, beer
- Canned Goods: fruits, vegetables, sauces, condiments
- Dairy: cheese, eggs, milk, yogurt, butter
- Cleaners: all purpose, laundry detergent, dishwashing liquid and detergents
- Over-the-counter medicines
[Company Name] convenience store also offers pick-up and delivery services.
III. Industry Analysis
Over the past five years, the Convenience Stores industry has withstood fierce competition by offering convenience, value and a variety of fresh and healthy products. Industry operators have increasingly shifted product mixes to include food service products that are more profitable than items such as cigarettes, and have focused more on satisfying demand for quick and easy meal options. As a result, industry operators have benefited from consumers’ need for time-efficient and healthy food service.
Revenue for the Convenience Stores industry is forecast to increase, rising at an annualized rate of 2.5%. Consumers are expected to shop at convenience stores more frequently as more people become employed. Higher income levels will likely enable consumers to pay higher prices for convenience store accessibility. As the employment rate increases, there will likely be more foot traffic in highly populated areas, further boosting industry demand. Further, as disposable income levels rise, consumers are expected to turn to the convenience of industry establishments.
IV. Customer Analysis
Demographic Profile of Target Market
[Company Name] will serve commuters, residents, and employees around the [Location] area. The precise demographics of the town in which the company resides is as follows:
| Omaha | |
|---|---|
| Total Population | 426,835 |
| Square Miles | 6.89 |
| Population Density | 3,789.20 |
| Population Male | 48.04% |
| Population Female | 51.96% |
| Target Population by Age | |
| Age 18 to 24 | 11.87% |
| Age 25 to 34 | 14.70% |
| Age 35 to 44 | 12.15% |
| Age 45 to 54 | 13.54% |
| Age 55 to 64 | 11.82% |
| Target Population by Income | |
| Income $50,000 to $74,999 | 11.16% |
| Income $75,000 to $99,999 | 10.91% |
| Income $100,000 to $124,999 | 9.07% |
| Income $125,000 to $149,999 | 9.95% |
| Income $150,000 to $199,999 | 12.20% |
| Income $200,000 andOver | 32.48% |
Customer Segmentation
We will primarily target the following customer segments:
- Families: The town has a large population of families who need access to a convenience store to meet the immediate needs of their families.
- Morning commuters: Many local residents drive to neighboring towns or take the nearby train to work. [Company name] is conveniently located for these individuals to pick up coffee or snacks in the morning or pick up a sandwich in the evening.
- Local office workers: Approximately 4,000 individuals work in offices within a quarter mile of the store’s location and it is expected that a fair portion of these individuals will frequent the store during the morning commute and lunch hour.
- Students: There is a middle school and a high school located a half mile from the store’s location. Students from these schools are likely to frequent the store after school or during lunch.
V. Competitive Analysis
Direct & Indirect Competitors
Brightfield Travel Plaza
Hours: M-F Open 24 Hours
Brightfield Travel Plaza is a family-owned gas station and convenience store with a food court, play area, shower station, and gift shop. The plaza houses a fudge shop, a coffee shop, and a convenience store which offers fresh grab-and-go foods such as doughnuts, produce, and rotisserie chicken, as well as frozen Wyoming-produced meats.
Town Goods, Inc.
Hours: Open 24 hours
Town Goods owns and operates about a half a dozen businesses, including convenience stores, car washes, budget hotels, and casinos. In addition, Town Convenience runs travel centers, several of which operate under the Pilot Flying J brand name. As part of its business, the company provides propane services and fuel distribution services. Its portfolio of stores includes 80 independently-owned and -operated Town Goods Food Stores; they offer deli-prepared foods, jerky, nuts, and tobacco products. In recent years, the company has developed mobile-based applications and location finders to cater to its mobile customer base.
Neighborhood Store
Hours: Varied by location
The company operates some 1,300 gas stations/convenience stores in the US under the Neighborhood Store/Neighborhood Store Market moniker. Those operations also include wholesale gas supply businesses that sell fuel to the company’s retail sites. In addition, the chain sells a host of other national gas brands to independent dealers and other customers. In 2017 the company was acquired by a Canadian convenience store leader.
Competitive Advantage
[Company Name] enjoys several advantages over its competitors. These advantages include:
- Location: [Company Name]’s location is near the center of town which is accessible to train communters, local office workers, and passersby. There is adequate parking, which makes it easy for customers to patronize the store.
- Great service at an affordable price: The store offers pick-up and delivery services, further extending its market reach.
- Management: [Company Name]’s management team has years of business and marketing experience that allows it to market to and serve customers in a much more sophisticated manner than its competitors.
- Relationships: Having lived in the community for 20 years, [Founder’s Name] knows all of the local leaders, newspapers and other influencers. As such, it will be relatively easy for [Company Name] to build brand awareness and an initial customer base.
VI. Marketing Plan
The [Company Name] Brand
The [Company Name] brand will focus on the Company’s unique value proposition:
- Convenient location
- Significant personal attention
- Moderate price point
- Friendly, customer-focused environment
Promotions Strategy
[Company Name] expects its target market to be individuals working and/or living within a 5-mile radius of its location. [The Company’s] promotions strategy to reach these individuals includes:
Local Publications
[Company name] will announce its opening several weeks in advance through publicity pieces in multiple local newspapers and publications. Regular advertisements will run to maintain exposure in relevant markets.
Community Events/Organizations
[Company name] will promote itself by distributing marketing materials and participating in local community events, such as school fairs, local festivals, and sporting events.
Commuter Advertising
We will drive attention toward [Company name] by hiring workers to hold signs alongside [route or highway]. Advertising on heavily traveled commute routes are an opportunity to alert large numbers of working individuals of the store’s opening.
Customer Loyalty Programs
[Company name] will create a winning customer loyalty program with discount coupons and vouchers, etc. to keep its best clients coming back again and again.
Ongoing Customer Communications
[Company Name] will publish a weekly flyer promoting convenience store specials.
VII. Operations Plan
Functional Roles
[Company Name] will be open 24 hours a day. It intends to employ [x] stock personnel, [x] cashiers, [x] delivery personnel and [x] supervisors, and anticipates having [x] customers daily.
In order to execute on [Company Name]’s business model, it needs to perform several functions. It anticipates using the services of [X] employees, divided into the following roles:
Service Functions
- Stock and inventory managers
- Cashiers
- Delivery personnel
- Maintenance personnel
Administrative Functions
- General & administrative functions including marketing, bookkeeping, etc.
- Sourcing and storing products
- Hiring and training staff
Milestones
[Company name]’s long term goal is to become the go-to convenience store in the [city] area. We seek to become the standard by which other providers are judged.
The following are a series of steps that lead to the company’s vision of long-term success. [Company Name] expects to achieve the following milestones in the following [xyz] months:
| Date | Milestone |
|---|---|
| [Date 1] | Finalize lease agreement |
| [Date 2] | Design and build out [Company Name] |
| [Date 3] | Hire and train initial staff |
| [Date 4] | Kickoff of promotional campaign |
| [Date 5] | Launch [Company Name] |
| [Date 6] | Reach break-even |
VIII. Management Team
Management Team Members
[Company Name] is led by [Founder’s Name], whose family has run retail stores for more than 30 years. In addition to his extensive experience running convenience stores, he graduated from the University of ABC where he majored in Business Administration. [Company Name]’s management team includes an assistant manager, who is also a Business Management graduate with experience in running a small business.
Hiring Plan
[Founder] will serve as the store manager. In order to launch the convenience store, it needs to hire the following personnel for rotating shifts that will cover the store’s 24-hour operations:
- Stock and inventory managers: 2 full-time and 1 part-time
- Cashiers: 4 full-time or part-time
- Delivery personnel: 2 to start
- Maintenance personnel: 1 full-time to work for the day shift
IX. Financial Plan
Revenue and Cost Drivers
[Company Name]’s revenues will come primarily from the items sold.
As with most businesses, cost of goods sold and labor expenses are the key cost drivers for convenience stores. Employees are paid through a combination of salaries and bonuses, rewarding them for performance and making them an active part in business retention and development.
The major cost drivers for the company’s operation will consist of:
- Cost of goods sold
- Wages
- Lease
Ongoing marketing expenditures are also notable cost drivers for [Company Name].
Capital Requirements and Use of Funds
[Company Name] is seeking a total funding of $420,000 to launch its convenience store. The capital will be used for funding capital expenditures and location build-out, hiring initial employees, marketing expenses and working capital.
Specifically, these funds will be used as follows:
- Store design/build: $220,000
- Working capital: $200,000 to pay for Marketing, salaries, and lease costs until [Company Name] reaches break-even
Key Assumptions
The following table reflects the key revenue and cost assumptions made in the financial model:
| Product Type | Percentage |
|---|---|
| Wine, Liquor and Beer | 23% |
| Food | 26% |
| Tobacco | 19% |
| Households items | 20% |
| Other | 12% |
5 Year Annual Income Statement
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | ||
|---|---|---|---|---|---|---|
| Revenues | ||||||
| Product/Service A | $151,200 | $333,396 | $367,569 | $405,245 | $446,783 | |
| Product/Service B | $100,800 | $222,264 | $245,046 | $270,163 | $297,855 | |
| Total Revenues | $252,000 | $555,660 | $612,615 | $675,408 | $744,638 | |
| Expenses & Costs | ||||||
| Cost of goods sold | $57,960 | $122,245 | $122,523 | $128,328 | $134,035 | |
| Lease | $60,000 | $61,500 | $63,038 | $64,613 | $66,229 | |
| Marketing | $20,000 | $25,000 | $25,000 | $25,000 | $25,000 | |
| Salaries | $133,890 | $204,030 | $224,943 | $236,190 | $248,000 | |
| Other Expenses | $3,500 | $4,000 | $4,500 | $5,000 | $5,500 | |
| Total Expenses & Costs | $271,850 | $412,775 | $435,504 | $454,131 | $473,263 | |
| EBITDA | ($19,850) | $142,885 | $177,112 | $221,277 | $271,374 | |
| Depreciation | $36,960 | $36,960 | $36,960 | $36,960 | $36,960 | |
| EBIT | ($56,810) | $105,925 | $140,152 | $184,317 | $234,414 | |
| Interest | $23,621 | $20,668 | $17,716 | $14,763 | $11,810 | |
| PRETAX INCOME | ($80,431) | $85,257 | $122,436 | $169,554 | $222,604 | |
| Net Operating Loss | ($80,431) | ($80,431) | $0 | $0 | $0 | |
| Income Tax Expense | $0 | $1,689 | $42,853 | $59,344 | $77,911 | |
| NET INCOME | ($80,431) | $83,568 | $79,583 | $110,210 | $144,693 | |
| Net Profit Margin (%) | - | 15.00% | 13.00% | 16.30% | 19.40% |
5 Year Annual Balance Sheet
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | ||
|---|---|---|---|---|---|---|
| ASSETS | ||||||
| Cash | $16,710 | $90,188 | $158,957 | $258,570 | $392,389 | |
| Accounts receivable | $0 | $0 | $0 | $0 | $0 | |
| Inventory | $21,000 | $23,153 | $25,526 | $28,142 | $31,027 | |
| Total Current Assets | $37,710 | $113,340 | $184,482 | $286,712 | $423,416 | |
| Fixed assets | $246,450 | $246,450 | $246,450 | $246,450 | $246,450 | |
| Depreciation | $36,960 | $73,920 | $110,880 | $147,840 | $184,800 | |
| Net fixed assets | $209,490 | $172,530 | $135,570 | $98,610 | $61,650 | |
| TOTAL ASSETS | $247,200 | $285,870 | $320,052 | $385,322 | $485,066 | |
| LIABILITIES & EQUITY | ||||||
| Debt | $317,971 | $272,546 | $227,122 | $181,698 | $136,273 | |
| Accounts payable | $9,660 | $10,187 | $10,210 | $10,694 | $11,170 | |
| Total Liabilities | $327,631 | $282,733 | $237,332 | $192,391 | $147,443 | |
| Share Capital | $0 | $0 | $0 | $0 | $0 | |
| Retained earnings | ($80,431) | $3,137 | $82,720 | $192,930 | $337,623 | |
| Total Equity | ($80,431) | $3,137 | $82,720 | $192,930 | $337,623 | |
| TOTAL LIABILITIES & EQUITY | $247,200 | $285,870 | $320,052 | $385,322 | $485,066 |
5 Year Annual Cash Flow Statement
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|
| CASH FLOW FROM OPERATIONS | |||||
| Net Income (Loss) | ($80,431) | $83,568 | $79,583 | $110,210 | $144,693 |
| Change in working capital | ($11,340) | ($1,625) | ($2,350) | ($2,133) | ($2,409) |
| Depreciation | $36,960 | $36,960 | $36,960 | $36,960 | $36,960 |
| Net Cash Flow from Operations | ($54,811) | $118,902 | $114,193 | $145,037 | $179,244 |
| CASH FLOW FROM INVESTMENTS | |||||
| Investment | ($246,450) | $0 | $0 | $0 | $0 |
| Net Cash Flow from Investments | ($246,450) | $0 | $0 | $0 | $0 |
| CASH FLOW FROM FINANCING | |||||
| Cash from equity | $0 | $0 | $0 | $0 | $0 |
| Cash from debt | $317,971 | ($45,424) | ($45,424) | ($45,424) | ($45,424) |
| Net Cash Flow from Financing | $317,971 | ($45,424) | ($45,424) | ($45,424) | ($45,424) |
| SUMMARY | |||||
| Net Cash Flow | $16,710 | $73,478 | $68,769 | $99,613 | $133,819 |
| Cash at Beginning of Period | $0 | $16,710 | $90,188 | $158,957 | $258,570 |
| Cash at End of Period | $16,710 | $90,188 | $158,957 | $258,570 | $392,389 |
