A supermarket is a place where you can get essential and non-essential commodities of all kinds. The supermarket business is not a new kind of business; it’s a lucrative but expensive business to start.
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In a supermarket, you have different types of consumables, household equipment, and appliances that satisfy all kinds of clients.
Basically, it is a place where the elites, middle, and the low-class visit to shop for their needs. Aside from the beautiful and serene environment that is common with some supermarkets, you also have a variety of options and can shop for all your needs in one place without moving from one place to the other.
In a supermarket, goods are placed in a way that appeals to shoppers. Indeed, shopping from a supermarket has become a major part of billions of people in the world.
Are you interested in setting up a supermarket business? Tighten your seatbelt and come on this ride with me.
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A supermarket is a large retail shop where all kinds of groceries, household goods, and products are sold. Goods are organised into sections on shelves and aisles in a self-appealing manner for easy identification.
It is a self-service center where customers shop their choice of product, thereafter proceed to the cashier for costing and payment.
The supermarket is becoming the preferred place to shop in Nigeria because it’s seamless and you can find most of the things you need in a place at relatively affordable prices. Also, the flexible payment option is also enticing; you can pay electronically or with cash unlike in the traditional market in Nigeria.
This business is capital intensive, but profitable. The self-service style, where customers can serve themselves until they get to the counter for payment reduces the cost of labour in running the supermarket business.
Let’s take a look at the important steps you need to take to start a successful supermarket business in Nigeria.
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Steps To Starting A Supermarket Business In Nigeria
Although anyone can start a supermarket business, success is guaranteed when you follow some laid down steps. Every business has its unique peculiarities, therefore one has to be prepared and do due diligence before venturing into any kind of business.
I have highlighted the basic steps to take in starting the supermarket business to ensure success.
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Starting any business requires deliberate planning, capital and knowledge about the business. You can’t wake up from the blues and decide to start a supermarket. The chances of failing will be high.
First, conduct a feasibility study of the opportunities and threats in the business venture. This is usually done through your business plan. In the business plan, you will state the aims and objectives of the proposed business, capital required, modus operandi and the possible steps to improve profit. Also, the business plan, will give insights on the market, competitors, pricing, and help you draw up plans to beat the competition.
After conducting your feasibility study and writing your business plan, then, proceed to do a business registration with the Corporate Affairs Commission.
You can register as a sole proprietor or a limited liability company depending on your choice. This process can be a little difficult, that is why companies like ReDahlia exist. ReDahlia makes business registration seamless for businesses.
Next, is to ensure that you comply with your tax obligations. Pay tax to the appropriate authority and ensure to get the proper licenses and permits.
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A supermarket business requires a huge amount of money. For instance, renting or building your store can be quite expensive in Nigeria and can require millions of naira depending on the location.
If you don’t have the capital and you really intend to venture into the business, you can seek funding with your business plan. You can approach banks for a loan or seek out investors that will invest in your business either as debt financing or in return for equity.
There are other ways you can raise capital for your business; through your personal saving or selling of an asset, through friends and family, using crowdfunding sites or even through cooperative societies.
There are different elements in the business that requires huge capital. You have to consider rent, the cost of furnishing and setting up the store, the cost of purchasing goods, deployment, and implementation of technology, cost of buying computers and equipment, the cost of running the business like salaries, etc. All of these require money and from our estimates, you will need around N3Million naira to set up a mini standard supermarket business. Bear in mind that this amount is dependent on your location in Nigeria.
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Location determines the success and failure of a supermarket business. You can’t possibly run a standard supermarket in a rural area, it is best for urban or suburban areas.
Consider locating your supermarket in a busy road, close to a junction, filling stations, or areas that is easily accessible to people. Also, setting up in an environment with a good power supply is ideal so as to minimize fuel expenses.
In addition, ensure you choose a location where the environment is clean and odor-free.
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Build A Store
Once the location has been sorted, the next is to erect the structure or rent a space. After that, you proceed to furnish the supermarket, arrange shelves and display items in a way that they can be seen easily.
Create different sections and categories, use tags or signboards for direction. The supermarket should be spacious for easy movement to avoid customers bumping into each other.
Also, you can place different items like female goods separately, males separately, etc. Related items can be arranged together with price tags.
For comfort, the store should have cooling systems (fans and AC) in different sections. Also for security, the store should be burglary proof and fire alarms should be installed in case of fire outbreak.
The layout of the store should be planned in a way that it’s easy to connect to other adjoining rooms and points like the warehouse, cash points, checkpoint, entry point, toilet, and kitchen (if you intend to bake).
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Except you are running a small shop, a supermarket business is not a business where you have to run to the market every day to stock up finished goods. It requires buying goods in large quantities and storing them so that sold out commodities can be replaced.
The warehouse houses reserve supply and can be at the back or side of the supermarket or in another corner of the building. It should be off bounds to non-staff members. And, it should be easily accessible for restocking goods.
The warehouse manager should take extra precaution in stacking the goods. Every item should be labeled and tagged. Fragile goods should be kept far from heavy items, eatables from non-eatables, non-perishable from perishable. The warehouse should be secured at all times.
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Supermarket business is different from a local store where one person operates the day-to-day activities. Due to the sensitivity of the business, you need to hire experienced staff who are customer-centric and trustworthy. You can organise training and seminars for proper integration.
Some of the personnel you need to run a supermarket are;
General Managers – They oversee the smooth running of operations of the entire business, such as staff coordination and managing the facility.
Cashiers/Accountant– These people are always at the counter ready to process sales and receive payment. They must be tech-savvy, smart, and proactive.
Sales Personnel – They move goods from the warehouse, arrange them on the shelves for shoppers. Also, they guide buyers on where to locate items of different kinds.
Security Personnel – Security personnel ensures the safety of lives and property. They direct drivers where to park their cars and guide incoming customers on how to keep their properties.
Warehouse Manager – He/she managers the warehouse and ensure stocks are well taken.
Cleaners – Ensure the cleanliness of the entire buildings at all times
Drivers – Transport goods and services relating to the business.
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Some Equipment Needed In The Supermarket Business
Generator: Air conditioner, counting machine, refrigerators, and bulbs need to be constantly working. Hence, standby gen is needed in case of a power outage.
Computer and automated cash register: It gives room for proper accounting and quick issuance of receipt.
Refrigerators: Can be as many as you can afford. It is for storing perishable items, drinks, yoghurt, chocolate, ice- cream e.t.c
Cart/Trolley/ shopping basket: To convey purchased items to the counter for payment.
Surveillance Camera: Depending on the size of your market, you might need to install a surveillance camera in every area. This will reduce the rate of pilfering rampant in stores and shops today
Also, install a good burglary system, to avoid burgling at noon and night.
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The supermarket owner should have different reliable sources for the products it sells. As long as you are not selling one particular item, it is important to create links with manufacturers, distributors, wholesalers, importers, and marketers of all kinds of goods.
It is also important to know when to restock, quantity to restock, and how to negotiate and get the best price. You can sell all kinds of product ranging from fresh, frozen, baked, cooked, home utensils, toys, home appliances, etc.
Some of the items you can sell include: cosmetics, biscuit/candies, stationaries, clothes, shoes, phones and accessories, pieces of jewelry, beverage, pharmaceutical items, cream, toiletries, flowers, decoration products, books, baby care products, e.t.c.
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Tools for Inventory
Using software that tracks your inventory will help you discover the fast selling goods, monitor every item that is sold, and the items that needs to be replaced. There are different tools that you can use to track your inventory like Inflow, Odoo etc.
You can use a computer fitted with a barcode scanner and inventory software to monitor your inventory. This way, items are automatically registered into the system just by scanning. Manually tracking your inventory can be tedious but it can be an alternative in case there is downtime with your software.
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Payment for all items are made at the counter. The counter is where people pay for items and receive a receipt. Each item sold must be scanned by the barcode scanner for the computer to process the transaction and update the inventory list.
At the counter, you can employ some marketing gimmicks by placing some irresistible offers at the checkpoint to boost sales. You can place cookies, chocolates, toys, etc, at the counter. This type of strategy works all the time; while a customer is waiting in the queue, they find themselves adding these items to their carts.
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Owing to the number of different supermarkets existing today, you can only stand out if you have a solid marketing and advertising strategy. Start your brand awareness within your vicinity. The people in your locality should know about the existence of your business.
Also, create customized cellophane bags to pack purchased goods with your business name, logo, and contact address visibly printed.
Design, print, and distribute flyers around your locality. Also, invest in billboard advertisements. Offer coupons, bonuses, and discounts. Additionally, it will help you stand out if you have an online department where people can shop online and their goods delivered to their doorstep.
Most importantly, ensure that you offer quality customer service and sell quality goods that are not spoilt or expired. If you sell expired goods, bad word of mouth will spread and customers will not return.
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We have established that the supermarket business is a highly competitive but profitable if done right.
As with every business idea we discuss on this platform, success is not guaranteed by just starting the business. You need to put in the work, be determined, and run a structured business.
Success will not come in a flash, you have to persevere and tweak the business continuously. Also, you need a workable business model that we can help you prepare.
Goodluck. You are on your way to starting your supermarket business.
Do you run a supermarket business, we will like to read your insights in the comments.
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The post How To Start A Successful Supermarket Business In Nigeria appeared first on Entrepreneurs In Nigeria.