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For further information on individual topics identified herein, contact the Canada/Prince Edward Island Business Service Centre. Because this document is only meant as a guide, the CBSCs will not accept responsibility for business decisions made based on the information provided.
BASICS TO GETTING STARTED
Before proceeding, reference should be made to the Prince Edward Island
Démarrage d'une entreprise dans l'Île-du-Prince-Édouard for information on the steps involved in establishing a new business.
Starting a business can be a rewarding undertaking, but it comes with its challenges. Before starting a business in Canada, it is wise to do your research. You should also make sure you are suited for entrepreneurship, and understand that significant effort may be required. As such, you should thoroughly enjoy the field you are getting into, and you must believe in your product or service as it may consume much of your time, especially during the start-up phase. There are many issues to consider such as regulations, financing, taxation, managing your business, advertising, and much more. For more information, see the Listes de contrôle pour ceux qui se lancent en affaires.
1. INDUSTRY OVERVIEW
Convenience stores offer quick and friendly service, handy locations, a variety of merchandise, and extended hours of operation. This publication focuses on starting an independent convenience store. However, many convenience stores are franchise operations.
Types of Operation
Liste de contrôle à l'usage des franchisé(e)s
As a potential business owner, you may be considering buying an existing or opening a new franchised store. As a franchisee, you enjoy the benefits of "Goodwill" that the name and reputation of the franchise already possesses. You also have, in many cases, the support of the parent company in issues such as location selection, management training, free advertising and support during the start-up phase of your operation. Also you have the advantage of capitalizing on an already profitable concept. However, as a franchisee, you must pay the franchisor for the benefits provided, and these costs come off the top of your sales revenue and may add up to more than 10%. Also your freedom is somewhat restricted when you own a franchise. You must adhere to the standards set by the franchise.
Emplacement du magasin - de « petites choses » qui comptent beaucoup
Choosing a location for your store may be your single most important decision. Do your research. In particular, consider these factors:
Population - The Grocery Trade Association states that to sustain a convenience store, between 500 and 1 000 people must live within a one-mile radius. If people have to travel more than a mile, they are more likely to go to a supermarket for a major shopping trip. Also check an area's future development plans and projected growth rates.
Competition - Although a convenience store's competition is mostly from other convenience stores, it can also come from supermarkets. Study all competitors to see if the local market can support another operation.
Traffic - Impulse purchases make up a good percentage of convenience store sales, so high volumes of pedestrian and vehicle traffic passing your store is critical. Try to locate near schools, parks, sporting facilities and other businesses to increase traffic.
Layout and Design
Selecting Your Inventory
Your product mix depends on your location and your target market's needs.
For example, a convenience store in a resort area will likely stock a more complete line of goods. Wherever your location, you must be able to estimate product demand. The Convenience Store Journal suggests a typical breakdown:
Groceries | 26% | Cookies/Snacks | 7% | Ice Cream | 4% | Candy | 3% |
Soft Drinks | 12% | Frozen Snacks | 5% | Health/Beauty | 4% | Meat | 2% |
Dairy | 10% | Non-foods | 5% | Produce | 3% | Tobacco | 2% |
Deli Items | 7% | Magazines | 5% | Baked Goods | 3% | Other | 2% |
Keep ongoing, accurate inventory records in order to continually monitor the ratio between your stock and actual sales. This helps to minimize lost sales and money tied up in inventory, as well as determine the demand for different products.
For more information, see the document Profitez des services de votre grossiste.
2. LICENSES, PERMITS AND REGULATIONS
One area of rules and regulations that all new businesses must comply with is that of licenses, permits and regulations. When creating a business, the entrepreneur must contact the municipality involved, along with the provincial/territorial and federal governments.
Each municipal government has the authority to issue its own business licenses within its jurisdiction. Since there is no uniformity throughout the country regarding municipal licenses for businesses, you should consult with the appropriate local officials to determine whether your business will be affected by local regulations and licensing requirements. Businesses (including home-based businesses) must also meet the zoning by-laws that control property uses in their municipalities.
General Business Regulations:
General Licenses, Permits & Regulations pertaining to most any business can be found in the
Démarrage d'une entreprise dans l'Île-du-Prince-Édouard
This document includes information on:
Convenience Store Related Licenses
Convenience Store Related Regulations
The Guide to Canada's Personal Information Protection and Electronic Documents Act (PIPEDA) helps businesses understand their obligations and comply to the Act. On January 1, 2004, the PIPEDA will cover the collection, use or disclosure of personal information in the course of all commercial activities in Canada, except in provinces which have enacted legislation that is deemed to be substantially similar to the federal law.
For more information, call 1-800-282-1376, see the document Protection des renseignements personnels - vos responsabilités, or visit the Privacy Commissioner's Web site at http://privcom.gc.ca/information/guide_e.asp.
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3. MANAGING YOUR OPERATION
Insurance
Insurance needs for businesses vary greatly. It is best to choose an insurance agent or broker familiar with your size of business and, in particular, an agent familiar with your type of operation. If you don't have an insurance agent, it could be a wise decision to ask other business owners in your area to recommend one.
The following list is included to remind you not to overlook the complex areas of business insurance. It is best, however, to discuss your specific requirements with your insurance agent.
Basic insurance:
Marketing/Advertising
Word-of-mouth advertising and good
public relations are often the best ways of promoting a convenience store. Depending on your market and its size, also consider flyers, newspapers (especially for holiday promotions), radio, TV, the yellow section of your phone book, and the Internet. Also bear in mind that a satisfied customer is good advertising.
For more information regarding advertising and marketing, see the following documents:
Les enseignes et votre entreprise
Planifier votre budget de publicité
À faire et à ne pas faire en publicité
Promotion des produits ou des services
Info-Guide - Affaires électronique
The Online Small Business Workshop - Marketing Basics covers the basics from developing your customer profile to promoting your business.
The federal Competition Act governs misleading advertising and deceptive marketing practices for all businesses in Canada. The Act defines which marketing practices are illegal and the process of complaint investigation.
For more information, consult the Loi sur la concurrence - Publicité trompeuse et pratiques commerciales déloyales, administered by Industry Canada or visit the Competition Bureau Web site.
Guide pour l'étude de marché
Successful businesses have extensive knowledge about their customers and their competitors. Acquiring accurate and specific information about your customers and competitors is a critical first step in market investigation and development of a marketing plan.
In developing a market plan, your primary functions are to understand the needs and desires of your customer, select or develop a product or service that will meet customer needs, develop promotional material that will make the customer aware and ensure product or service delivery.
Tenue des livres de base
A good record keeping system should be simple to use, easy to understand, reliable, accurate, consistent and designed to provide information on a timely basis.
Note: All staff working with cash should be trained to recognize counterfeit currency.
The legal requirement concerning financial records specify only that they be a permanent, accurate and complete record of your daily income and expenses. There are many types of record books and bookkeeping systems available. For example:
Choix de services professionnels
The use of professional services is essential to the success of a small business. Professionals can provide knowledge and expertise in the areas where you may have little. They can round out your management team to ensure your business is operating efficiently.
As an entrepreneur, there are four main areas of professional services with which you may consult:
Furnishings and Equipment
There will be certain equipment and furniture you will need in your place of business which will allow you to perform your services. List that equipment and its cost to you. An important factor to consider, when choosing equipment, is the after-sales service and repair, and their affordability.
Used Equipment - Consider buying used equipment as a cost-saving measure. Sources of used equipment could be a convenience store that is closing or dealers in second-hand equipment. The drawback to this approach is that, often, there are no guarantees with the purchase.
Leasing Equipment - Another alternative is to lease equipment to help keep start-up costs down. To obtain financing for capital leasing for new or used equipment for the creation of your business, see the document ARCHIVE - Projet pilote de location-acquisition.
For more information on parts and materials, overhead, stock control and pricing, see the document Plan d'affaires pour les petites entreprises de service .
Établir un système de rémunération
Pay administration is a management tool that enables you to control personnel cost, increase employee morale, and reduce work force turnover.
Détermination du prix juste
Setting the right price can influence the quantities of various items that consumers will buy, which in turn affects the total revenue and the profit in the store. In the end, the right price for the product is the price that the consumer is willing to pay for it. Hence, correct pricing decisions are a key to successful retail management.
Prices should allow for sufficient gross profit to cover overhead expenses and a reasonable net profit. Choose one of two pricing methods:
Traditionally, convenience stores have had markups of approximately 33% to 67%, margins of 25% to 40%. Convenience stores simply cannot buy in large volumes like superstores, so do not attempt to offer lower prices. Instead, stress service and convenience.
Cost Control
You must have procedures for controlling inventory and costs. Ask people in your industry for information about procedures for:
Liste de contrôle pour suivre l'évolution des profits
Making a profit is the most important -- some might say the only objective of a business. Profit measures success. It can be defined simply: revenues - expenses = profit. So, to increase profits you must raise revenues, lower expenses, or both. To make improvements you must know what's really going on financially at all times.
You can find additional information on managing your operations, by viewing our index of popular business topics.
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4. ASSOCIATIONS
There are many associations that may be of use to convenience store owners. Although it is not necessary to join a convenience store association, there can be advantages in becoming a member because they
Examples of associations include, but are not limited to:
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5. RESOURCES
Additional resources which may help convenience store owners include, but are not limited to:
Publications
You may find books, magazines and other relevant print material at the CBSC and/or business service organizations in your community that provide CBSC information. Contact the CBSC in your region for the location nearest you.
Statistics
Magazines
Related Web Sites
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6. ADDITIONAL INFORMATION
When seeking business information, feel free to visit the Web sites for the
Business Start-Up Assistant
and the Online Small Business Workshop. You may also want to check with your local library, the major chartered banks, your local Chamber of Commerce, educational institutions and business development organizations -- some of which offer courses, seminars and workshops.
For general business information, you may contact your local CBSC by:
DISCLAIMER
Information contained in this document is of a general nature only and is not intended to constitute advice for any specific fact situation. Users concerned about the reliability of the information should consult directly with the source, or seek legal counsel.
Links Policy
Some of the hypertext links lead to non-federal government sites which are not subject to the Official Languages Act and the material is available in one language only.