Business Planning
Essentials Of A Supermarket Business Plan

Essentials Of A Supermarket Business Plan

A supermarket is a necessity in today’s busy life as it is a one-stop shop where we can buy all our daily essentials. Imagine shopping for various household and food essentials by going to separate shops for each item – milk from the dairy, bread from the bakery, vegetables from the green grocer, pulses from a particular kirana store located far away, kitchen utensils like cutlery from another shop, washcloth and napkins from a separate store, soaps and detergents from a third shop. Imagine the time and resources that must have gone into getting just the basic necessities for the house in the days before a supermarket. And given the present-day traffic situation and hectic lifestyle, traveling to so many different shops for individual items will definitely be a big task. And this is the reason why everyone is thankful for the supermarkets. 

A supermarket is defined as a self-service shop that offers a wide variety of food, beverages and household products, which are organized into sections. The supermarket is larger and has a wider selection as compared to the grocery store, but is smaller and more limited in its range of merchandise than a hypermarket or big-box market. Owing to the wide range of products available under one roof, a supermarket is a popular business choice. Entrepreneurs looking for a rewarding business opportunity that is in demand too, can consider a supermarket.

However, often the terms supermarket and grocery store are used interchangeably, creating confusion in the mind of the entrepreneur regarding both the businesses. A grocery store is a comparatively smaller store that has a limited range of products, such as food and drinks items and if it does store household items then they are limited in stock and not all household essentials are kept in the store. Also in the olden times, a grocery store would be one where the grocer would get the items to the customers’ door (from his shop) and even today goods are sold over the counter in a grocery store. A supermarket, on the other hand, is a large place that sells a wide variety of products, other than food and drink items, right from clothing, baby items, and medications to other daily essential items required in a household. And supermarkets are places where people go to buy their groceries and household essential items instead of the goods being delivered to them. Also, supermarkets are usually chain stores while grocery stores are standalone stores with individual owners. These are just some basic differences between a supermarket and a grocery store, and the terms can still be used interchangeably, but an entrepreneur must know the difference between the two when conceptualizing the business and making a plan for the business, as the details of the supermarket business plan will differ in some aspects, such as the capital investment required, space, equipment and stock required, from that of the business plan for a grocery store. 

Before learning about the essentials to be included within the business plan, whether preparing a plan for a large sized store or a mini supermarket business plan, it is important for entrepreneurs to be aware of the advantages of the supermarket business. The benefits of a supermarket business include-

  • Supermarkets provide goods at a comparatively lower price. This is because supermarkets obtain goods in bulk at a discounted rate from wholesalers or from manufacturers. The lower price means that more people opt for the products, thus benefiting the customers and in turn the entrepreneurs too.
  • Supermarkets provide a lot of choices. Customers, therefore, prefer going to the supermarket because they can choose from a number of options for the products needed and buy all the things needed at the same time, all in one place. 
  • The products sold at a supermarket are high-quality products that pass through stringent checks and are hygienic thus ensuring that customers get to purchase only standard, genuine and high-quality products.

These are some of the benefits because of which supermarkets are popular with the customers and are a great business opportunity for aspiring entrepreneurs. 

Entrepreneurs must, therefore, before starting this popular business, a business plan in place to ensure that all aspects of the supermarket business are considered and analysed and implemented. 

Essentials Of A Supermarket Business Plan

The supermarket business plan is an important document that needs to be written carefully, keeping all the details of the business in mind. This plan needs to cover all the expenses that will be required for performing the actions and how to earn profits from it. Starting a supermarket is a big deal, and for this task, one needs to make a proper plan for the overall functioning of the same and the same can be achieved via business planning services to ensure that none of the essential factors are skipped and the business plan is comprehensive and detailed.

Supermarket Business Plan

Some of the essential information to be included in the supermarket business plan is- 

Registration Of The Business

The business needs to have an identity of its own and also comply with certain requisites for a business organisation, which can be achieved via business registration. By opting for a particular business entity, whether a sole proprietorship or a partnership or a one person company or a limited liability partnership, the supermarket has its own identity separate from that of the owners and this endows the business with several benefits. The business registration is recommended and it’s information, including the type of registration the business owner opts for must be mentioned in the supermarket business plan.

Location, Layout And Management Of The Supermarket

The location is another important information that must be included in the supermarket business plan. The location of the supermarket needs to be selected with care and after conducting a thorough research. A supermarket in a busy area that has a lot of customers walking in is always a good option. The market trends and conditions, as well as the competitors in the area, must be researched before choosing the area. An area which has few or no supermarkets in the surrounding is profitable for the business. An area with affluent or high middle class residents means the supermarket can sell higher priced goods too and earn a decent profit. Also, choosing a location with ample parking and one that has storage space for keeping the stock is recommended. The rent or purchase price of the shop space must also be taken into consideration while choosing the location of the supermarket. 

The market trends such as, what products are in demand, what price range products sell out fast, is attractive packaging a deciding factor, etc are factors that must be considered while starting the business and selecting a location for the supermarket.

The layout of the supermarket is a vital consideration which must be included in the business plan too. The layout ensures that all the products are displayed well and can be viewed by the customers. The layout must be precise and clear cut, showcasing all the available products according to their category and level of importance, without causing confusion. The aisles must also have ample space for trolleys and customers with baskets to walk freely. These details must be included in the supermarket business plan.

The operation and management is also an important aspect that needs to be included in the business plan. It includes information on where the stock will be purchased from, the details of the vendors, the hiring of staff, who will handle the cash register, who will manage the aisles and attend the customers, who will manage the employees, the salary details of the staff, the stock management plan and the employees who will manage the stock. All this information is to be included in the supermarket business plan.

Licences Required

The supermarket business requires certain licences and registrations which are mandatory for the store to operate. These include –

  • Shop Act- this licence is for commercial establishments that are located within municipal limits. The licence helps regulate the payment of wages, hours of work, leave, holidays, terms of service and other work conditions of people employed in the supermarket.
  • FSSAI Licence- this licence is responsible for protecting and promoting public health through the regulation and supervision of food safety. FSSAI is a mandatory registration/ licence for business entities that engage in food and related activities, such as the supermarket.
  • GST Registration- the Goods and Services Tax is an indirect tax that is levied on goods as well as services and is applicable uniformly throughout the country. This means that under the GST system, a single product is taxed at the same rate in every corner of the country.

These are some of the mandatory registrations that need to be applied for and included in the supermarket business plan.

Capital Requirement

The supermarket business requires a significant investment for setting up the store and running the business. Capital requirements for the business include-

  • The cost of leasing or renting a shop in a proper location.
  • The setup cost of the supermarket such as interior design and purchasing equipment such as number of racks.
  • The purchase of products to display and stock from the vendors.
  • The business setup cost like obtaining licenses from required authorities.
  • The technological investment such as CCTV, billing counter, billing software, etc.
  • The marketing of the business via print advertisements, signboards, flyers with special offers, participation in promotional events, etc.

The capital for all of these expenses is usually obtained via loans and the investors and loan officials require a detailed description of the business, where the business plan plays a significant role. These are some of the essential factors that need to be included in a business plan, irrespective of its size, and foundations such as deAsra can help design the perfect supermarket business plan.

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