Financing a Grocery Store
Financing a Grocery Store
Financing a grocery store opening would probably be the most difficult task. Most grocery stores need $500,000 – $1,000,000 to start up. They need it for building renovation and equipment, employees and the food. Before you can start renovating a space you need to have a space. The location for the “Mark-et” would be on the Northeast corner of 17th and Wells. This space is 7,200 square feet. Marquette charges $11 per square foot for rent. Marquette also adds a $3-4 per square foot for Commonary Maintenance fees (Whittow). Rent would be between 100,800 and 108,000. Renovation and equipment is where the majority of the start up costs would be spent. Renovation and equipment can cost anywhere from $500,000 to $1,000,000. For the location on 17th and Wells, the estimate would be around $500,000 or less since it is going to be a small grocery store. Most of the money would go into renovating the space such as putting in new floors and lighting. The rest would be spent on equipment like cash registers and computers. The owner of the store would need to take out a business loan from the bank and pay it off over time. The store would be listed as collateral
Once the store is renovated and equipped the next thing it would need is employees. The store would need a total of 140 working hours per week. Even though it will only be open for 16 hours on most days it would need employees there after and before it is open to stock and clean up the store. The store would need at least 5 student employees at a time. That would be a total of 700 work hours for the week. Student employees would get paid $6 per hour at first. The other thing the store would need is managers. There would be four total managers to split up the 14 shifts. Only one manager would nee to be present at a time. Managers would get a salary of $1,000 per week to start. This means that employees’ wages would be $32,800 per month.
Since this store is rather small it would not be a chain. This also means that it would most likely not have a distribution company in change of food items since most distribution companies do not deliver to non-chain stores. This is fine. The store would be stocked by vendors. Vendors are people who sell items to the store and keep it stocked with their items. They get paid from the company they work for which gets paid from the store. Vendors usually only receive a commission from what they sell so the store would basically have free employees for every item that it would sell. Over-stocking would seem to be a concern. It is not, however. Grocery stores do not have to pay for stale items from vendors. Vendors would lose money from stale items so they would make sure the store is stocked as accurately as possible.
This is all