If you’re thinking of starting a grocery store, one of the first things you’ll need to know is how much it will cost. This article will break down the expenses involved in setting up a grocery store, from construction and inventory costs to employee salaries and marketing expenses. So, if you’re interested in starting a small grocery, keep reading!
The cost of setting up a grocery store can start from $450,000. This includes the cost of equipment, which averages around $100,000, and the cost of inventory, which averages around $160,000. Additionally, you’ll need to factor in employee salaries, benefits, and marketing expenses.
Before diving into the cost of setting up a grocery store, let’s talk about the factors that will affect your overall budget.
Are you buying a franchise? – The benefit of buying a franchise is that you’ll have access to an already-established business model, which can make your start-up process simpler and less expensive. However, remember that you’ll also have to pay additional fees like franchise fees, marketing fees, and royalties.
Location – The cost of renting or purchasing the premises for your grocery store will depend on the location. If you’re opening a store in a major city, you can expect to pay higher rent than if you were opening in a smaller town.
Now that we’ve covered the factors influencing the cost of setting up a grocery store let’s dive into some specific expenses you’ll need.
Business Registration Fee
Every business, including grocery stores, must be registered with the government. This process varies from state to state, but it typically costs around $750.
Business Permits And Licenses
Depending on the products you’ll be selling and the state you’re in, you may need to acquire additional permits and licenses. For example, if you’re selling alcohol, you’ll need to apply for a liquor license. On average, you should budget around $4,000 for permits and licenses.
Once you have identified a suitable location for your grocery store, you’ll need to negotiate a lease with the landlord. The cost of leasing a commercial space varies depending on the size and location of the property. However, you should budget around $1 per square foot for the lease, plus an additional $1 per square foot for CAM (common area maintenance) charges. So, if you’re leasing a 6,000-square-foot space, you can expect to pay around $12,000 per month in lease payments.
Remodeling Costs For A Store
If you’re leasing a space already set up as a grocery store, you may not need to do much in remodeling. However, if you are starting from scratch, you’ll need to factor in the cost of gutting the space and creating a new layout. This could include anything from painting the walls to constructing new shelving. The cost of remodeling a grocery store varies depending on the scope of work, but you can expect to pay around $20,000 on average.
Of course, inventory is one of the biggest expenses for any grocery store. You’ll need to purchase different foods, beverages, and other grocery items to stock your shelves. The inventory cost will vary depending on the products you choose to sell, but you should budget around $160,000.
First Three-Month Operating Costs
Before getting your footing in the business, you’ll need to factor in the cost of operations for the first three months. This includes expenses like employee salaries and utility bills. You should budget around $60,000 for the first three months of operation.
To run a grocery store, you’ll need to purchase essential equipment, such as commercial refrigerators, freezers, cash registers, and security systems. The equipment cost will vary depending on the brands you choose and the features you need, but you should budget around $100,000.
As with any business, having the proper insurance coverage for your grocery store is important. A good insurance policy will protect you from accidents and thefts. The insurance cost varies depending on your coverage, but you should budget around $2,500 per year.
You’ll need to invest in some marketing to get the word out about your new business. This could include anything from print ads to online marketing. The marketing cost will vary depending on your chosen strategies, but you should budget around $3,000 per month.
The cost of setting up a grocery store can vary depending on several factors, but you should expect to spend around $450,000. This includes expenses like inventory, equipment, and marketing. With proper planning and execution, you can open a successful grocery store that will serve your community for years.