Convenience stores often save the day when you realise you forgot to buy your colleague a birthday card on your way to work or when last-minute ingredients need to be picked up for a family dinner party. Over time, they become a valued part of the community, with their personalised customer service and ease of access. So how can you set one up and become an integral part of your community? Starting your convenience store requires a considerable amount of capital to acquire store premises and inventory to sell. If you are confident about your finances and are wondering where to start, we run through some key legal issues you should be aware of before opening your doors.

Setting Up

As there is a considerable level of competition in the convenience and general store market, it is important you set up your business correctly from the start to give yourself the best chance of success.

Do you want to operate your business in a partnership? Or is it best to set up a company so that you are not personally liable for business debts?  

How you structure your business depends on tax and accounting factors, so it is best to seek legal and financial advice before deciding on which business structure is most suitable for your circumstances.

Location, Location, Location

Having the right location is vital to the success of your convenience store. Like the name implies, your store should be situated in a convenient place. You might locate yourself in a residential area, to attract customers who do not want to travel all the way to the nearest supermarket. Or perhaps you may choose to set up near a main road or highway, to attract travellers passing through.

Think about whether there are convenient parking options available near your desired location or if it is an area with high foot traffic, like near a train station. The easier it is to access your convenience store, the more likely people will visit.

Once you find your ideal location, you will need to obtain various licences from your local council. These may include approvals to:

  • conduct commercial business on those premises;
  • carry out any development work to fit-out your store space; or
  • confirm the development and use meets council requirements, once any work is completed.

Check the Australian Business Licence and Information Service website or contact your local council to identify what business licences you may need and how to apply. A lawyer can help you with your licence applications to ensure the best chance of approval. The application process can be time-consuming and costly, so make sure you conduct careful research and allow plenty of time to acquire any consent.

Your Goods and Services Selection

Convenience stores face competition from a variety of businesses, including supermarkets and newsagencies. So it is important to think about what products and services your store will offer to draw customers in and set you apart from your competition. Convenience stores generally attract four types of customers. They include those who:

  1. routinely use your store for everyday purposes;
  2. come to your store not only to buy, but also to experience friendship and community;
  3. are last-minute shoppers and need to pick up an item here and there; and
  4. enjoy the novelty of products and brands offered by convenience stores.

You should offer products and services that cater to all these customer types. For example, think about stocking not only essentials like bread and milk, but also unusual ice-cream flavours or gift items and cards. Researching what products or brands your competitors do not sell, and meeting that gap, is another effective way of improving your profitability.

In addition to selling traditional items like snacks, toiletries, and stationery, offer a range of products tailored to your local market’s demographic. For example, if you are near a business district, perhaps offer high quality coffee and juices. If you are located near a train station, provide travel cards or phone cards. Keep in mind that the better presented your products are, the more sales you will make.

Additional Licences

You will need to obtain additional licences from your local council if you want to offer certain products or services. Depending on your local state or territory, these may include:

  • a licence to sell tobacco or alcohol products;
  • a licence to sell meat products;
  • a food licence, if you intend on serving food to customers;
  • a licence to sell poisons, such as cough medicine or pain relief tablets; or
  • licences to sell fuel, such as the Flammable and Combustible Storage Licence in Queensland.

While obtaining licences do cost money, they can be a good long-term investment, attracting customers who need these services.

Opening Hours

Part of the benefit of convenience stores is that they are usually open early in the morning, or late at night, when it is otherwise hard for customers to buy items they need. You can decide what days your store will be open, and what your trading hours will be. You may also be able to operate on otherwise ‘restricted days’, such as Easter Sunday or Christmas Day. This is possible if your store has no more than two owners and four regular employees.

Keep in mind if you are open outside ordinary hours, on weekends or on public holidays, you may have to pay penalty rates to your employees, under the General Industry Retail Award. The Award will form the basis of your contract with your employee. A lawyer can help explain the Award to you so you always remain on the right side of the law and can also draft or review your employment contracts to ensure they are fair while helping you get the best deal possible.

Key Takeaways

Starting your convenience store takes a lot of planning and work. Finding the right location and mix of goods and services to offer will go a long way in attracting customers. Make sure you get the licences you need to offer the goods and services you want. If you want help starting your convenience store, or need a lawyer to review your contracts or licence applications, get in touch with LegalVision’s business lawyers on 1300 544 755 or fill out the form on this page.

Vaishnavi Prakash
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