A shop in the countryside can be a profitable business for aspiring entrepreneurs. It is cheaper to open it than in the city, and the competition here is not so high. A small store with an assortment of the most necessary goods will be the most relevant format for this type of activity.
The main conditions for the profitability of the point: a small number of competitors, good traffic and compliance of the product range with the needs of customers.
Pros and cons of doing business in the countryside
Opening a rural store has its own characteristics, which will be discussed in the article.
But first, let’s evaluate the idea by analyzing the advantages and disadvantages of such a business:
- Low rent and capital investment at the start;
- Ease of assortment formation;
- Constancy of demand;
- Quick return on investment;
- No need for an advertising campaign;
- Low average bill;
- Problems finding suitable premises.
As you can see, the disadvantages are related to the small income of the store due to the small number of people and the limited choice of accommodation options. There are practically no empty buildings of former clubs, households, municipal pharmacies and consumer cooperation stores.
THERE IS ONLY ONE WAY OUT OF THE SITUATION – TO BUILD A BUILDING FROM SCRATCH OR OPEN A POINT ON YOUR OWN EXISTING SITE.
How to open a shop in the village
First of all, you need to decide on the concept of the outlet.
A shop in a village can be opened in several formats:
- Self service point.
- Large department store
The best option for a small town would be the first and third format, or a self-service point with a wider range.
IT IS ADVISABLE TO OPEN A STORE IN THE CENTER OF THE VILLAGE, BUT THIS IS NOT ESSENTIAL, PLACEMENT IN ANY OTHER PART OF IT IS ALSO ALLOWED.
The business plan should include a step-by-step description of organizational issues with market research and assortment formation, finding suitable premises and purchasing commercial equipment, obtaining permits, hiring employees, financial calculations and risk analysis. Let’s look at each stage below.
Demand and competition analysis
At this stage, you should determine the contingent of buyers, the number of competitors, their product range and cost. If there are already a couple of shops in the village, it is unprofitable to open another one. It is important to create benefits for customers in the form of attractive prices and discounts, the constant availability of essential goods, polite staff and a pleasant design of the outlet.
It is worth asking the residents themselves what kind of goods they would like to see on the shelves of the store and select a list based on the information received.
We define the range of goods
The assortment of the store should consist of the most popular items of food, stationery and household goods, household chemicals, clothing and bedding.
An approximate list of the main groups of goods contains:
• bread and bakery products;
• groceries – tea and coffee, canned food, salt and sugar, vegetable oil, cereals, pasta, etc.;
• dairy products – cheese, milk, sour cream, cottage cheese, kefir;
• fish – frozen, smoked and salted;
• meat and meat products – sausages, sausages, semi-finished products;
• confectionery – sweets, chocolate, cookies, ice cream, etc.;
• juices and carbonated drinks;
• cigarettes and alcohol.
It is better to buy bread and milk from local producers, meat – from farms, poultry farms and meat processing plants. There are two ways to cooperate with suppliers: self-purchase at wholesale bases or order delivery to the store.
The first option requires a vehicle with a spacious trunk and the cost of its maintenance and refueling. The second one is not always available, since not all wholesalers agree to cooperate with small customers, and an additional fee is often charged for transportation, which is not very profitable.
It will be good if we manage to agree on deliveries with a calculation for sale, which will save money and set aside these funds for further development. It is necessary to allocate 150-300 thousand rubles for the purchase of the first batch of goods.
Search and repair of suitable premises
The premises for the store must comply with sanitary and fire safety requirements and have:
an area of at least 30-50 sq. m., divided into a trading floor, a warehouse for storing food and a room for staff;
• connected communications with the ventilation system or the possibility of access to fresh air and a bathroom;
• heating, optimum humidity and temperature;
• convenient access roads.
Indoors, it is necessary to carry out repair work with finishing the walls and floor, installing doors, decorating the buyer’s corner, signboards, etc., for which it will be necessary to allocate 60-100 thousand rubles, plus a rent of 30 thousand rubles. per month.
Purchase of commercial equipment
The prepared room should be equipped with appropriate equipment and furniture. It should be easy to assemble, comfortable and durable.
The retail equipment of the store will be:
- seller’s counter;
- showcases with a cooling system;
- racks and shelves made of wood and metal;
- refrigeration and freezing installations;
- electronic balance;
- cash register and terminal for cashless payments;
- security system;
- knives and cutting boards;
- packing containers, packages;
- overalls for store employees.
For the staff room, you will need a wardrobe, a table and chairs, a kettle, and for visitors to relax, several banquettes or a bench. 150-200 thousand rubles should be allocated for the purchase of equipment. You can also buy used equipment, and then gradually replace it with a new one.
Additional savings on equipment will be brought by cooperation with well-known brands such as Fanta, Coca-Cola, Pepsi. These manufacturers provide the opportunity to use their refrigerators for free as a sign of advertising their products. Other grocery companies offer similar services.
Registration of permits
To conduct business, you need to register as an individual entrepreneur by submitting an appropriate application, passport, TIN and a receipt for payment of the state fee to the tax office. If there are several owners, it is better to form an LLC.
A suitable OKVED classifier code is 47.11 “Retail sale of mainly food products, including drinks, and tobacco products in non-specialized stores”, 47.19 – “Other retail trade in non-specialized stores”. The taxable base is UTII or STS with a deduction of 6% from income or 15% from the difference between income and expenses.
In addition, you will have to provide documents on the ownership of the building or a lease agreement, an agreement on garbage collection, as well as on carrying out measures for deratization and disinfestation, obtain quality certificates for all products, the conclusion of the Sanitary and Epidemiological Station and fire supervision. When selling strong alcoholic products, a license is required, the purchase of which costs 65 thousand rubles. Personnel must have medical books on hand with timely medical examinations.
The staff of the store in the village will be sellers: one with an eight-hour working day or two with a shift work schedule. It is advisable to hire people with experience in the field of trade, friendly and responsible, who will help form the assortment and adjust it in time. For a surcharge, sellers can do the work of a cleaner. You can not hire an accountant, but outsource it, carry out management functions independently.
In order to motivate staff, it is advisable to pay wages not from one salary, but from two parts: a small salary and a percentage of revenue. At first, it is better to trade on your own in order to assess the purchasing power and demand for a particular product, the average bill and daily revenue.
How much to invest at the start
At this stage, it is necessary to determine the amount of costs for starting a business. The initial investment depends on the range and size of the store. The average initial investment will be 500-800 thousand rubles.
Let’s designate the main items of expenditure:
- Preparation of a retail outlet and payment of its rent – 90 thousand rubles;
- Purchase of equipment and furniture – 200 thousand rubles;
- Formation of the product range – 200 thousand rubles;
- Registration of a business and registration of permits, unforeseen expenses – 100 thousand rubles.
We get the total amount of 590 thousand rubles. If the store is being built from scratch, from five hundred to one and a half million rubles will have to be added to the indicated figure. Moreover, after the opening of the store, monthly expenses for the purchase of goods, payment of rent, tax deductions and payroll, utility bills – 160 thousand rubles will also begin.
The margin of a store in the countryside is not very high – the margin varies between 30-40% for food and 30-50% for household chemicals. The main income just comes from the sale of the latter. When calculating profits, we will start from a customer traffic of three dozen people a day with an average check of 400 rubles.
With these indicators, we get a daily revenue of 12 thousand rubles. and per month – 360 thousand rubles. when working seven days a week, and with days off – 264 thousand rubles. Then the net profit will be 360,000 – 160,000 = 200 thousand rubles. and 264,000 – 160,000 \u003d 104 thousand rubles. respectively. Profitability will reach 30%, payback will occur after a few months of work.
TO GENERATE ADDITIONAL INCOME, YOU CAN ORGANIZE TRADE WITH TRAVEL TO REMOTE VILLAGES OR SETTLEMENTS THAT DO NOT HAVE RETAIL OUTLETS.
It is impossible not to point out the possible risks of the shop business in the village. Firstly, these are unsold remnants of products, including those with an expired shelf life. The cost of writing it off negatively affects profit. Therefore, you should not buy large volumes of goods, especially perishable ones, and shortly before the expiration date, mark them down.
Secondly, shortages due to theft of staff and customers, errors in the acceptance of goods and the work of the seller-cashier. The system of material responsibility of employees and control over commodity values will allow leveling the risk.
Thirdly, frequent interaction with regulatory authorities and the payment of fines in case of identified violations of the sale of food and alcoholic beverages.
These negative aspects must be taken into account and, if possible, measures should be taken in advance to prevent them. In general, keeping a store in a rural area is a profitable undertaking with a development perspective.