STARTING A SUPERMARKET BUSINESS IN NIGERIA
A supermarket is a large retail shop where food items and household goods are sold. According to the Advance English Dictionary, a supermarket is a large self-service grocery store selling groceries and diary products and house hold goods.
One of the advantage of starting a supermarket is that it brings in a lot of money to the owner because self service encourages impulse buying, customers are forced to buy what they did not wish to buy as the appealing display of goods on the shelves in the supermarket will force them to buy .
STEPS TO TAKE TO START A SUPERMARKET BUSINESS
Starting a supermarket is one of the most lucrative business in Nigeria though it come with its own challenges. One of the major challenge of supermarkets in Nigeria is the poor power supply in Nigeria, supermarkets sell food items and grocery and most of them need to be refrigerated, a supermarket must make provision for generating set in order to operate effectively. Another major challenge supermarkets face is the poor standard of security in Nigeria or simply put, insecurity. There have been a lot of cases where armed robbers break into supermarkets to steal.
Who can start a supermarket business? Anyone can start this business if you have an adequate knowledge about the business and you have the capital and all what it takes to start the business.
Below are some of the steps you need to take before starting or opening supermarket;
PLAN YOUR BUSINESS
Planning is very important in a business. It is the first step to take when starting any business at all. Before opening a supermarket, you need to sit down and plan. You don’t just wake up one day and open a supermarket because you have the money. You have to think about and decide the type and size you want. There are different types of supermarkets; mini supermarkets, grocery stores e.t.c. You should focus on the one that has the largest target market. You should also make plans on how you want your supermarket to operate, methods of operation to be used, how it would be different from other supermarkets. The truth is that, there are so many supermarkets in Nigeria so you have to make strategic plans on how to make your supermarket unique and how to make it stand out from that of your competitors.
RESEARCH ABOUT THE BUSINESS
Before investing your money into any business whatsoever, you must have made the necessary research about such business and the supermarket business is no wise different. Before opening a supermarket ,you must have adequate information about everything that has to do with a supermarket; the cost of opening a supermarket, how it operates. You must make necessary research about the market, your potential customers. Research is very necessary as it gives you more insight into the business you want to embark upon. Meet with those who have done the business in time past or those who are still into the business to get information about the business, ask them questions and receive feedbacks.
WRITE A BUSINESS PLAN
One of the mistakes most business owners make is that they believe that business plan is only written for some selected business but actually it is not. A business plan is needed for any business you want to start as it keeps you focus.
What exactly is a business plan?
According to Wikipedia, a business plan is a formal written document that contains business goals, methods on how to attain the goals and the time frame in which the goal will be achieved.
In simple terms, a business plan summarize your business and its goals. A well written business plan also drive investors to invest in your business. A business plan should contain;
- Executive Summary : This is the summary of all what is in your business plan. The executive summary must be captivating enough to make people want to read your business plan. It should also contain your vision and mission statement.
- Company Overview : This should contain who you are, your business goals, how you intend to operate your restaurant , and everything about your supermarket.
3.Products and Services : This section of your business plan contains or explains a clear description of your product or service, the cost, description of your suppliers.
- Market Analysis : This describes everything about the market for your goods, your market research, your expectation on the market , how your supermarket will strive in the market, your competitors. It also contains your SWOT analysis where you list your strengths, weaknesses , opportunities and threats .
- Marketing and Sales Strategy : This section explains how you intend to market or make people know about your supermarket , how you will promote your supermarket and penetrate into the market. It should also include your selling cost , promotion and advertising costs, e.t.c.
- Business Structure : This will contain everything about your supermarket, the type of business; either sole proprietorship, partnership or limited liability company , the number of staffs you want to hire and the intended salary.
- Financial Analysis : After getting your market research, a professional accountant should be consulted to help prepare the financial analysis of your business plan. It should contain realistic financial information, which should include your cash flow statement, projected income statement and statement of financial position ( balance sheet ) for the next three or five years and other relevant information.
- Conclusion : This should highlight the key strengths of your plan, remind the reader why your business is in the best position to execute the plan , and the summary of your vision and goal.
GET THE REQUIRED CAPITAL
Starting a supermarket requires a very huge amount of money as you would need to get a spacious place, stock a lot of goods, pay your employees and do many other things. The type of supermarket you want to open will even determine the amount of capital needed to a large extent. Money is very important in starting any business, the next step to take is to source for fund. If you have the required capital to fund your restaurant business, you are good to go but if not, below are some of the ways you can raise capital for your business;
- Personal savings.
- Get a bank loan : This is one of the most common way people finance their business, by obtaining loan from bank.
- Crowd funding : It is the act of funding a project by raising small amount of money from a large number of people.
- Loans from family and friends.
- Apply an Angel Investor: An angel investor is a high net worth individual who provide financial backings for small start-ups or entrepreneurs, typically for ownership equity in the company. They are also known as private investor or seed investor.
- Cooperative Societies : They also give people loans at a particular interest rate which they must pay at an agreed period of time.
SECURE A GOOD LOCATION
Location is a very important factor in setting up a supermarket. Supermarkets should be located in the urban or sun urban areas because majority of people who patronize supermarkets are city dwellers who consume more than those in the rural areas, it should be located in a busy area where people pass through everyday to drive more sales. Imagine someone wants to start a supermarket and he or she now went to a very remote area which look more or less like a village, trust me, that person will have to shut down the supermarket in some months. To make sales more feasible and realistic, you should get a location close to your target market. Apart from the nearness to potential customers, other things to look out for when securing a location are;
- Competitors : Another thing to look out for when determining the location of your business is the nearness to other restaurants. For a start up, if you have two or more supermarkets around your vicinity, it might not be good enough as you may not be able to compete with them.
- Costs : You must also consider the cost of setting up a supermarket in a particular location.
3.Environmental factors : This is also important in determining the location of your supermarket. Your supermarket should be located in a neat environment.
- Power supply: You should locate your supermarket where the power supply is stable to some extent to avoid buying fuel at all times.
PURCHASE THE NECESSARY EQUIPMENTS
After getting money and a good location, you need to get the necessary equipments needed in a supermarket. You will need to get carpenter to build shelves in the supermarket, get an electrician to do the electrical work, you will need to get a generating set ,desktop or laptop trolleys, baskets, Cctv camera ( optional) e.t.c
SET UP A WAREHOUSE
A warehouse is a place where goods or products are stored before they are been taken to the shelves. The supermarket business is not a type of business that needs you to go to market two or three times a week. It requires buying goods in large quantities and storing them, then when the goods on the shelves are exhausted ,or sold out, we replace them. A warehouse should be located close to the supermarket because of the ease of transferring goods from the warehouse to the supermarket. Another reason goods are stored in the warehouse is the problem of delivery lag, that is the time it takes between when you order and when the goods are delivered to you. Warehouse helps to solve this problem by storing large quantities of goods so that customers are not disappointed when they want to buy a particular good.
Care should be taken when arranging goods in the warehouse, fragile or light goods should be handled with great care. The warehouse should be properly managed and taken care of.
STOCK YOUR SUPERMARKET
This is the next step to take after the supermarket has been set. You will have to call your suppliers to stock the supermarkets with different goods but you have to be very sure the goods are of good quality.
LEGALISE YOUR SUPERMARKET
It is very advisable to hire a lawyer to assist you in this legal process . To make your supermarket legal, you must do the following;
- Have a Business Structure : supermarket should have a structure, maybe it’s going to be a sole proprietorship, partnership, joint company e.t.c
- Have a Business name : One should start thinking of the name you want to give your supermarket, this is very important. Do your research to know if the name you have chosen can be legally used by your business, that is, if no one has registered that name.
- Register your business : After deciding on a business structure and a business name, the next step is to register your business name and your business with the Corporate Affairs Commission ( C.A.C).
- Get your federal and state Tax ID
- Permits and License: Get the necessary permits and license.
- Get necessary bank account : As a business, you need an official bank account to run your business.
HIRE COMPETENT PEOPLE
You will need people to help you in the supermarket, you will need to hire people who are experienced, willing to work, teachable, trust worthy and customer-friendly. Some of the staffs needed in a supermarket are at least two sales person at the counter who should have experience and know how to operate a computer, how to operate printers e.t.c., people who would move goods from one place to another, security personnel e.t.c.
Oh yeah!!! Now you can start selling your goods after every necessary thing have been put in place.
PROMOTE YOUR SUPERMARKET
Participate in many promotions as possible, make people know about your supermarket and build a name for yourself. By doing this, you are also helping brands spread awareness of their products.
Supermarket business is a very lucrative business and it also creates job employment. It is not as difficult as you think it is, just follow the steps listed above and you would be glad you did.
NOTE: This article was first published https://www.bullscapitalltd.com
ABOUT THE AUTHOR
Damilola Babatunde has a great passion for writing. She write articles on starting a business, how small business owners can grow their business e.t.c and many small business owners have really benefitted from her write ups.