Starting a Grocery Store: Key Expenses and Considerations

Jun 22, 2024

Starting a Grocery Store: Key Expenses and Considerations

Introduction

  • Presenter: Vitu
  • Topic: Costs of starting a grocery/convenience store
  • Location Focus: Montreal, Canada
  • Video Reference: Link to journey of starting a grocery store
  • Comparison to opening a coffee shop: Very similar except for some permits and inventory

Initial Steps

  1. Business Registration Fees
    • Essential before settling on a location
    • Cost Example: $1200 (includes government fees and accountant)
    • Varies by location, likely to be at least $1000

Leasing Considerations

  1. Security Deposit and Rent

    • Expect to pay first and last month’s rent upfront
    • Tip: Save for 6 months of rent + 2 months security deposit = 8 months total
    • Additional Tips: Budget for renovation time; negotiate with landlord for possible free months
    • Personal Advice: Have at least 6 months' rent saved before signing lease

  2. Legal Review

    • Hire a lawyer to review the lease ($500/hour; typically 3 hours = $1500)
    • Alternatively, consult agent or accountant for red flags

  3. Permits

    • Example permits: occupancy, selling food, tobacco, alcohol
    • Cost Example: ~$400
    • Some permits require annual renewal (e.g., alcohol permit ~$300/year)

Equipment and Furnishings

  1. Shelves

    • Invest in high-quality Gondola shelves (adjustable, durable)
    • Tip: Consider second-hand shelves from closing stores or auctions to save costs

  2. Fridges and Freezers

    • Used equipment is often more efficient and less costly
    • Professional inspection recommended
    • Example: Custom-made cold room: ~$10,000 + labor

  3. Cash Desk and Scanner

    • Cash desk: personalized based on preferences
    • Cost Examples: Cash and scanner ~$1500; scanner alone ~$700

Inventory and Operational Costs

  1. Inventory

    • Depends on store size; example given for 1500 sq ft store: $40,000
    • Combination of low and high ticket items
    • Tip: Contact suppliers for cost estimates

  2. Insurance

    • Commercial and property insurance required
    • Costs vary by location: ~ $250/month in Montreal; $500+ in the US
    • Advice: Shop around or use a broker

  3. Security

    • Installation of cameras and alarm systems: ~$2500
    • Monthly maintenance fee: ~$20

  4. Signage

    • Example cost for 2 signs: $2000
    • Note: Including lighting can increase costs significantly

Additional Costs

  1. Labor

    • Manual labor required for setup
    • Options: Hire people or use friends/family for help

  2. Phone and Internet

    • Costs vary by location
    • Advice: Shop around for best rates

Conclusion

  • Recap of major expenses
  • Invite for further questions or comments
  • Encouragement to like and subscribe if the content was helpful