How to Start a Convenience Store

Setting up a successful and profitable convenience store is a challenging undertaking. But if you are aware of the crucial steps on how to start a convenience store, the journey becomes much easier. Knowing what is essential to the success of the business, such as permits, employees, reliable suppliers, and convenience store insurance will set you up for great business.  Read this guide that provides all of the steps.

How Much to Start a Convenience Store?

To answer the question of how much to start convenience store right away, you will need around $50,000 to $100,000. However, this cost can be higher or lower depending on various factors. These may include:

  • Initial inventory–The quantity, size, and quality of the first stock

  • Equipment–This is equipment that keeps the store running such as drink dispensing machines, displays, coolers, and shelves among others

  • Deposits, rent, and purchase price–The location of the store, size, and condition will also affect the purchase or rental price

While opening a convenience store could look easy, it requires meticulous planning. Below are six costs to consider in your planning stages:

Permits and Licenses

To legally operate a store, you must have the right permits and licenses. The numbers could vary depending on where the store is, but below are some averages:

  • Business license–$60 to $220 (add annual fees)

  • Alcohol license– Costs $1,419

  • Occupancy permit– Costs $457 

  • Tobacco license–$28 to hundreds depending on the state

  • Lottery retailer license–$29 in most states


Remember, the better the location of your convenience store the higher the price. Here is a general equation to consider:

“Yearly price per sq. ft x square feet ÷ 12 months = monthly rent”

Take the average size of a store to be around 2, 425 square feet (according to a 2019 study); the monthly rent could be; $10 x 2,425 ÷ 12 months = $2,020.83 per month in rent – if the yearly price for every foot is $10. 

Equipment Costs

You also need to consider the cost of your equipment, especially the equipment used to store beverages and snacks. Think about the following equipment and their estimates:

Drink dispensers

  • Iced coffee dispenser: $2,530+

  • Juice dispensers: $683 to $3,710

  • Soft drink dispenser: $2,140 to $24,100

  • Frozen drink machine: $950 to $19,930

Open air coolers

  • Undercounter: $8,320 to $12,410

  • Horizontal: $3,720 to $30,460

  • Vertical: $1,935 to $31,315


Refrigerated display cases

  • Sliding door cases: $2,660 to $7,600+

  • Double-door swing cases: $4,400 to $8,000

  • Single-door swing cases: $3,000 to $5,700


Point of sale system

Your point of sale system is among the most important pieces of equipment you need in the convenience store. It helps with recording sales data to processing transactions, the POS system acts as the backbone of the business.

Costs involved here might include the hardware such as receipt printer, cash drawer, scanner, and touchscreen terminal. You will also need to purchase the system itself. Some organizations could offer the hardware part of the POS system as one bundle going for around $3,000. As for the software, it is usually a subscription for approximately $59-$909 monthly


One of the major startup costs is inventory. It could cost up to upwards of around $80,000 for a convenience store. However, it could fluctuate based on variables such as:

  • Product selection

  • Number of products you stock

  • Prices of the goods

  • Wholesale financing

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How to Start a Convenience Store

Convenience stores are known for their late-hours operations, making them convenient even for customers that were just passing by. Starting one does not have to feel like rocket science provided you know the steps, have the passion to set it up, and can withstand any inconveniences. Here is how to start your own convenience store:

Site Selection 

When looking at how to start a small convenience store, the first thing to consider is where you will locate the store. Ideally, you would want your store on a busy street with less competition and minimum rent translating to more profits.

It should also match the Geographic Information Systems report, to assess the feasibility of the site. Get a GIS report from the many firms that offer this kind of data service to conduct your research.

Needs of the Customer Group

Another important aspect to look at when assessing how to start a convenience store business is the customer group’s needs. Typical convenience store customers will fall under any of these four groups:

  • Neighbors–Neighbors will show up at your convenience store to experience the community and even for friendship purposes

  • Regulars–These are the daily customers to the store who are notably brand loyal

  • Last-minute shoppers–These are mostly customers heading home and had forgotten to purchase something. They will enter the store, pick up their item and be on their way home without spending too much time in the store

  • Thrill-seekers–These are customers that come looking for exciting items in the store

All these customer classes offer convenience store owners the opportunity to cater to their needs. Critically examine what each of these customers’ needs and what could be their daily pain points. You can then work on helping them by having relevant commodities that they are always looking for at the store.

Follow Relevant Business Trends

Following relevant business trends is important when learning how to start up a convenience store. Most store owners limit their profits by ignoring to follow trends that relate to their business. Avoid undermining some items and failing to avail them at the store just because of a stereotype. Follow relevant trends that resonate with last-minute shoppers and see what they require daily, then ensure you always have that commodity.

Form a Legal Entity

Common business structure types include partnerships, corporations, limited liability companies, and sole proprietorships. Establishing a corporation or an LLC will protect you from the liabilities of the business in case it is sued. You could choose to form an LLC for the convenience store to avoid being held responsible for the business liabilities.

Register for Taxes

Before opening the convenience store, you have to register for different federal and state taxes. Apply for the EIN to register for taxes as it is free. You could go through the state sale taxes in your state and learn what more applies to you in terms of taxes since some states have specific business taxes.

Open a Business Credit Card and Business Bank Account

For personal asset protection, always use dedicated business banking and credit accounts. Avoid mixing your business and personal accounts, as this is dreadful when the business is sued. 

Opening a business bank account is essential and is a requirement when looking to apply for a business loan. It also makes tax filing and accounting quite easy for the convenience store. A business credit card will help separate business and personal expenses and also help build the store’s credit history.

Set Up Business Accounting

Keeping records in business is one of the most important things you can do to maintain a high-profit line. Recording your sources of income and expenses will help you understand how your business is doing financially. Detailed and accurate accounts will also simplify the tax filing process.

Obtain Necessary Licenses and Permits

Ensure you get all the required licenses and permits before you start business operations. Failure to do so will result in hefty fines. Some of the important licenses may include:

  • Liquor license –For establishments that offer alcoholic beverages

  • Tobacco vendors’ license–To be renewed annually for every business selling tobacco products

  • Lottery retailer’s license–For convenience stores that sell lottery tickets to customers. They are given by state lottery agencies

You can obtain more information on the required licenses from the state’s local website. Most states will ask business owners to have a seller’s permit. It helps record and collect taxes from commodities.

Any business that operates in a given physical location must have a certificate of occupancy. This certificate validates that all zoning laws, government regulations, and building codes have been met. Typically, the landlord will get the CO and so before signing the lease agreement, ask whether they already have the CO. The certificate should also be issued after any major renovations.

Get Business Insurance

Most businesses require insurance to operate lawfully and safely. The insurance protects the business’ financial well-being in the event of a loss. There are different insurance policies for various businesses with different risks. Look for the insurance policy that covers the risks your business may face. If you are unsure, you can go for general liability insurance.

After working for some months, you will now be sure of the risks your business faces and take the appropriate insurance coverage. Another popular insurance cover is Worker’s compensation insurance. This will also be a requirement if the business will have employees.

Define the Brand

Your brand will dictate how the public sees your business. It is what your business stands for. That means a strong brand will stand out and attract more customers over competitor brands. Endeavor to promote your brand even if not via direct marketing. You can leverage social media and attract customers from social sites and even create loyalty programs where you could offer free food or coffee.

Create a Business Website

The next step after defining the brand is creating a website for the business. Why does your business need a website? All businesses today have a website whether it is a big or small business. Creating a basic website for a business is very easy today, thanks to website builder tools such as WordPress and Shopify.

Have a Business Phone System

Having a business phone system will separate business matters from personal matters. Your convenience store will also be more automated and will feel legitimate. A working business system will help customers contact you easily in case of anything.

How to Run a Convenience Store Successfully

This section covers how to run a convenience store successfully. A convenience store can be equated to an oasis in the highway’s arid region. As much as it offers customers some convenience in terms of snacks and other services, it also allows them to stretch and regain focus on their journey.

Even though customers do not spend hours here, there are several things you can do to make them enjoy a memorable and enjoyable experience in your store. Below are tips to run a convenience store:

Have a Simple Checkout

In addition to product accessibility and layout, streamline the checkout process to give your customers an easy time. Have several checkout points if your store is extra busy to avoid long queues at the checkout point.

Track Your Inventory

Nothing is as frustrating as walking into a store and not finding what you want, especially if you have come a long way looking for it. Every customer expects to find a wide assortment of commodities in a convenience store. That is why it is advisable to replenish the store as needed and track the inventory. Never allow the convenience store to run out of stock since short-stocked items mean lost customers.

Practice perfect inventory management practices to avoid having dead stock or excess inventory. Make sure you use the right inventory management software for that job.

Keep Bathrooms Tidy

A cluttered washroom could paint a tainted image of the business in the eyes of the customer. If you want your customers to leave your store with all smiles and come back regularly, maintain top hygiene in the bathroom. Ensure they are always clean, tidy, and smelling fresh. They should be cleaned daily if not after every few hours.

Boost Visibility

Another brilliant way to run your convenience store successful is by giving the cashier a clear opportunity to sweep their eyes across the entire store. Install see-through shelves that enable the cashier to see what a customer is doing wherever they are in the store. Tiny items should be displayed closer to the cashier to prevent shoplifting.

An image of a woman buying groceries in a convenience store.

How to Start a Drive Thru Convenience Store

Are you looking for impressive tips on how to start a drive thru convenience store? Understand that starting a drive-through store business requires effort, commitment, and dedication. Remember just like any other convenience store, the drive thru should also be at a prime location. Here are the steps to follow to start a drive thru convenience store:

Conduct Market Research

Market research is crucial for any business. It will enable you to understand who are your target audience, how competitive the market is, and other information about the industry. With proper market research, you will easily cater to the needs of your target audience and adjust accordingly to gain their loyalty. Here is a list of critical questions to ask yourself during market research:

  • Who are the target customers for a drive thru convenience store?

  • Are there niches in the drive thru convenience store industry?

  • Who are the key competitors?

  • Is this a profitable business?

  • What are the state or county regulations for this type of business?

  • What do I need to get started?

  • Are there franchise opportunities for drive thru convenience stores?

Select a Memorable Name

Come up with a recognizable business name. It should be memorable and unique. Make it catchy and fancy so that customers enjoy mentioning the place.

Register the Business

The next step is to register the drive thru. Creating an LLC for the business is the best business structure for this type of business. That is because the business will be a separate legal entity from you, the owner. From registering the business, you will need to get the right licenses and permits to run the business. These licenses and permits include:

  • Signage permit

  • Zonal permits

  • General business license

  • Operational state facility inspections

  • Health and safety permit

  • Valet parking permit

  • Dumpster placement permit

  • Food and drinks handler license

You will also need the following documentation to run a drive thru convenience store:

  • The operating agreement for the LLC

  • Federal tax payer’s ID

  • DBA

  • Certificate of incorporation

  • EIN

  • State permit and building approval

  • Insurance policy

  • Business plan

  • Business license

  • Memorandum of understanding

Cost Analysis and Budgeting

Running a drive thru convenience store could cost from around $50,000 to an excess of $250,000. There are several costs involved in setting up the business such as:

Marketing promotion expenses  $85
Registration costs  $755
Licenses and permits  $1,220
Hiring a business consultant  $2,560
Insurance coverage $125,610
CRM software, payroll software, and accounting software  $1,530
Facility remodeling  $25,400
Phone and utility deposits  $2,200
Start-up inventory $76,127
Startup expenses on stationary $530
Storage hardware (glasses case, utensil rack, bins, shelves)  $3,726
Launching website cost $640
Counter equipment cost (ice machine, sink, countertop)  $6,500
Grand opening party $3,500
Store equipment costs (security, signage, cash register)  $3,153
Miscellaneous $2,530

Different factors could determine what your startup cost could be. These may include:

  • Cost of insurance cover

  • Type of facility

  • Choice of location

  • Cost of hiring a consultant

  • Size of the store

  • Registration costs

  • Required permits and licenses

  • Types of products available

  • Training and recruitment costs

  • How big will your grand opening be?

Create a Business Plan

A business plan will serve as the roadmap of your business operations. This will also characterize your business. Your business plan ought to include:

  • Executive summary–Where the business will be, what you will be offering, and maybe how you will run the business while taking care of customer needs

  • Products and services for sale–Eggs, canned and dry goods, lottery tickets, non-alcoholic beverages, packaged candy and snacks, beer, wine, etc

  • Mission and vision statement–What your business stands for and how it sees itself

  • Goals and objectives–What are the goals of your drive thru convenience store

  • Organizational structure–The shop manager, sales boys, and girls, accounting clerk, security guards, and cleaners

Marketing Plan

A marketing plan will serve your roadmap when selling items. Here are the key parts of your marketing plan:

  • SWOT Analysis–These include the strength, weaknesses, opportunities, and threats to your business

  • Payment options for customers–Pay via cash, bank transfer, credit cards, check, or mobile money transfer

  • Advertising and sales strategies–How will you advertise and market the drive thru? It can be by sending letters, advertising on social media and other internet forums, creating an online presence for the business

Set Up Shop

This is where the tarmac hits the road. You are now ready to set up your drive thru. First, you will need to consider the rules and regulations, the parking spot for your customers, purchasing power or residents around a given area, and accessibility to the area.

You will also have to look for the equipment needed to set up the shop. These include countertop equipment, storage hardware, receipt issuing machines, deep freezers, countertop, blenders, DVD players, TVs, ventilation, signage, and cash register among others. 

Hire Employees

Look for competent shop managers or maybe you could take that position and hire a security guard, account clerk, and the sales girls/boys.

Launch the Drive Thru

Organize an opening party after everything is set to start the business. A grand opening is a brilliant way to market your drive-thru and notify residents and locals that there is a convenience store near them, they can come and shop.

How to Start a Mobile Convenience Store

If you are searching for the ultimate silver bullet on how to start a mobile convenience store, here it is. A mobile convenience store is a mobile store with goods and products for customers. Most owners will convert a van, truck, or bus to a convenience store. The type of vehicle you choose to convert to a store could determine the size of the inventory and possibly your income. Here are the steps to start a mobile convenience store:


Like any other business, you have to research the business and find out the level of competition and what are the legal requirements in your state to run such a convenience store. Here are some considerations:

  • Market research–To understand the services and products in high demand around that you want to operate. Survey the businesses in the area and talk to potential customers as they stroll the streets

  • Competition research–You must understand what your competitors offer by looking at their websites or reading reviews about them

  • Legal requirements–These are the required permits and licenses in your state to run a mobile convenience store. Some licenses and permits to look for include a food handler’s permit, business license, vending license, and seller’s permit.

Get the Necessary Permits

As mentioned earlier, you need to acquire the right licenses for the business. Remember that different states and localities could have different legal requirements to run a mobile convenience store. That is why it is advisable to first find out the legal requirements in the area and then start the application process for each permit and license.

Set Up the Mobile Convenience Store

This is almost the last step where you purchase the ideal vehicle for your business, install the shelves for placing the goods, and stock inventory. You could look for a much larger truck that will accommodate more inventory and still leave some space for you to operate on. Get a vehicle that has a generator, it will come in handy.

Stock the store with inventory that is in demand around that area. Common products you can sell include drinks, cigarettes, lottery tickets, and snacks. Many people love these almost everywhere. In connection, here is a breakdown of the startup costs:

Expense Amount
Permits and licenses  $1,000
Business plan  $50
Vehicle $15,000
Inventory $5,000
Shelving $500
Marketing $1,000
Miscellaneous $1,000

Market the Mobile Store

Marketing your business is crucial, especially in the incubation stages. Look for ways to effectively market the convenience store such as social media use, word of mouth from customers, and placing banners on the truck. You could also embrace online advertising targeting people around that area.

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Insurance Requirements for Boosting Income

Products offered by convenience stores, such as daily essentials and snacks, make these businesses challenging to operate even though rewardInsuranceing. Convenience stores could be potential targets for crime, or accidents could happen there. That is why it is prudent to seek the necessary insurance coverage, as it is also a requirement by law.

Business Owner Policy

BOP is your convenience store’s most comprehensive and cost-effective insurance policy. This policy will cover third-party claims, property damage, and lost income. A BOP offers a great insurance backup for convenience stores with low risks. For better coverage, you can also include supplementary endorsements such as cyber liability or liquor liability insurance. 

Consider NEXT as the most ideal insurance company to get BOP. Whether you run a drive-thru or a mobile convenience store, NEXT has you covered. With this company, there are no delays on claims as long as they are legitimate and authentic.

General Liability Insurance

This insurance protects the business from property damage or accidental third-party bodily injuries in the store. Since the business experiences heavy traffic, injuries and accidents are prone to happen. General liability covers these types of accidents on third parties and any property damage in the business. This insurance also covers personal indictments such as invasion of privacy, false arrest, and discrimination. It is essential to have this insurance cover since you will deal with several cases of shoplifting in the convenience store. Consider working with Thimble for short-term general liability insurance.

Professional Liability Insurance

Professional liability is crucial since it covers the negligence, inaccurate advice, or work errors of your employees. In case they do any of these, your business will be held to account. This cover protects companies and individuals from incompetence and negligence allegations. Consider working with Hiscox

Commercial Property Insurance

CoverWallet is the ideal insurance company for this insurance coverage. Commercial property insurance will cover your inventory, computers, refrigerators, and the building. This insurance coverage also encompasses repairs and replacements that could otherwise be costly to the owner of the business. The damage should, however, be a result of a covered peril such as hail, fire, vandalism, or windstorms.

Commercial Auto Insurance

Commercial auto insurance covers damages or injuries to employees and owners when driving the company vehicle. This insurance will cover the other vehicle’s damages and injury claims from the occupants. Commercial auto insurance will also cover company vehicles for collisions, vandalism, or theft. One such company that offers this insurance cover is Tivly.

Workers’ Compensation Insurance

The insurance covers employees in case they fall ill or are injured at the work premises. Any employee could suffer injuries when restocking or heavy lifting inventory. This cover protects them from such. The Hartford offers this cover to convenience store owners covering the financial and medical issues of employees.

The benefits of this cover could include medical expenses, rehabilitation costs, and lost wages. In case of employee death, the cover will offer benefits to the surviving dependents of the employee. Almost every state has worker’s compensation insurance as a requirement for every convenience store. 

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