There is a lot involved with running your own business. Some are more challenging than others. One business that is often considered is the little local grocery store. They can be a great avenue for those not particularly advanced in their business knowledge but are willing to put in the hard work it takes to get up and running. This can be a great family business.
I stumbled upon an article that I thought pointed out some of the basics to look for when considering a grocery store purchase.The financial criteria used to evaluate a prospective purchase in this business should include the industry's standard cost factors. If the cost of goods, for example, is below 70% of the gross revenue figure, the store owner is either very smart about purchasing, is able to collect above-average markups, or both. Another reason for a gross profit above 30% might be that some of the revenue represents sales of, for example, sandwiches and soups made to order, with cost of goods factors in the 30% to 40% range.
Occupancy cost--rent, utilities, maintenance, and insurance--should not exceed 7% of gross sales, if the company is to be profitable. And if payroll costs are more than 20% of gross revenues, it may be a sign the owner is not putting in the long hours commonly worked by most operators in this business. That also might suggest that he, or she is not collecting earnings of 10% or more--the minimum figure that many operators hope to achieve. For more detailed information click on buying a grocery store.
If you are considering a grocery store purchase you can contact Dinah at TheNorthwestLife.com we have opportunities available. Please remember that when considering a Business purchase it is important to keep it low key. Many owners do not want the general public aware that they are selling. Contact your Agent for more specifics.