Although it is unlikely to make you a millionaire, running a convenience store can be a lucrative business if managed well. “The income depends on the size of the business. A mathematical average would probably be a return of around £25,000. If you purchased a leasehold for £100,000, I would imagine your annual profit would be in the region of £40,000,” says Paul Williamson of business agents Ernest Wilson.
On top of the income from the business, you should also factor in the savings that can be made from living over the shop and having access to cheap food and supplies – one store owner declared that he never realised it would be so cheap. Added to this is the dubious benefit that, since the shop will invariably take up a lot of your time, you won’t have many opportunities to actually go out and spend your hard-earned money.
Convenience stores are about offering as many services as possible. Here are some ingredients to boost your appeal.
What it is: Some outlets can sell tickets for all National Lottery draws and National Lottery Instants, others can sell Instants only.
How to get one: You must have over 750 sq ft shop floor, over 750 customers per day, and be open 9am-6pm daily and until 7.30pm on draw days. The number of lottery outlets is not currently increasing, so new opportunities only arise when an existing outlet has its contract terminated - for failing to meet sales targets or breaking lottery rules for example. Camelot selects a replacement from the applicants it has on file.
What it costs: Installation and training on the machine is free and there are no ongoing expenses.
What you can make: Retailers earn 5% commission on every sale and 1% on every prize payout over £10 and below £200.
What it is: The ability to give customers instant access to cash through an ATM.
How to get one: ATMs are supplied to independent retailers by companies such as MoneyBox, CardPoint and InfoCash.
What it costs: The shop has to rent the machine from the ATM provider.
What you can make: The store makes a commission on every transaction. ATM supplier, Moneybox, also claims that the subsequent increased footfall and spending can lead to an 8-15% total increase in revenue.
What it is: Buying frozen, part-baked bread, cakes and pastries, which can be prepared quickly each morning to be sold as freshly baked items.
How to get one: Suppliers include Delice de France (who also provide a cabinet, signs, labels and training) and Le Pain Croustillant.
What it costs: You buy the part-baked bread like any other supplies. If you require a bake-off oven, however, this could cost you. What you can make: Freshly baked bread gives customers another reason to visit your store and the aroma is believed to encourage shopping, leading to an increase in general sales.
Video games rental
What it is: Renting out videos games to customers and selling ex-rental copies.
How to get one: You don't need a licence to rent video games. You can buy the games direct from a wholesaler, lease them, or buy a franchise.
What it costs: New releases cost and need to be regularly replaced. If you lease video games, they are updated regularly by the leasing company.
What you can make: Once you have made back the purchase price everything else is profit. Ex-rental video games can be sold on. If you lease, your profit is the margin between your rental costs and what you earn from your customers.