You have found the perfect business idea, and now you are ready to take the next step. There is more to starting a business than just registering it with the state. We have put together this simple step guide to starting your asian grocery store. These steps will ensure that your new business is well planned out, registered properly and legally compliant.
STEP 1: Plan your Business
A clear plan is essential for success as an entrepreneur. It will help you map out the specifics of your business and discover some unknowns. A few important topics to consider are:
- What are the startup and ongoing costs?
- Who is your target market?
- How long it will take you to break even?
- What will you name your business?
Luckily we have done a lot of this research for you.
What are the costs involved in opening an asian grocery store?
Initial costs vary, depending upon location, size of the building, and the products you plan to sell. When shopping for the right location, make sure it is in a well-traveled area and has ample parking. Once you have signed a lease or purchased your building, take the time to design a floor plan that flows and allows customers to move around with ease. Renovations and updates may be required. If possible, allow yourself ample time to shop for your brick and mortar location. Investing in a space that is already set up as you need it will save both time and money. If you do take this approach, however, inquire with the previous owner to determine why the business closed or moved.
Once you have your location ready, there are a few other investments you will need to make:
- Inventory and accounting software
- Coolers, refrigerators, and shelves
- Insurance - Consult with an educated professional to ensure you purchase the proper business insurance. Many new business owners fail to realize they are underinsured until they experience a loss. The results are often devastating.
- Commercial trash service
- Materials for advertising, including a well-branded sign that is visible from the road
Successful business owners report an investment of $135,000 to $205,000. While it can be done for less, this will ensure your shelves are stocked with the necessities and that your store is set up for success from the get-go.
What are the ongoing expenses for an asian grocery store?
In addition to the standard costs that come with keeping a facility running, you will face several ongoing expenses. The bulk of your budget will go to re-stocking your shelves and payroll. Maintaining proper insurance can get expensive, but is important for ensuring your business stays afloat after a loss. When determining your budget, be sure to factor in marketing costs, including fees for booths at events and your local farmer’s market.
Who is the target market?
Primarily, you will be targeting Asian chefs and families. With the right location and marketing strategy, however, many business owners have found success catering to the needs of other local consumers. More and more consumers are beginning to realize the benefits that come with shopping in niche grocery stores. Targeting them in your advertising efforts will help increase your store’s annual sales and profits.
How does an asian grocery store make money?
Your grocery will generate revenue through product sales. Prior to opening your business, it’s important to understand market needs. Over-saturation in a community will negatively impact your business, as well as the competition’s.
How much can you charge customers?
Prices will vary from item to item. Items should be priced for maximum profits, while remaining competitive with other speciality grocers in the area.
How much profit can an asian grocery store make?
The strength of your marketing strategy, the customer service you offer, and the size of your grocery store are all factors that determine your annual profit. Store owners realizing the greatest success continuously work to ensure their shop is unique, offering items customers cannot find anywhere else. Store owners report an annual profit of $56,000 to $75,000.
How can you make your business more profitable?
While your business may be geared towards food, there are a number of non-perishable items you could stock your shelves with. Music, hats, t-shirts, and kitchen supplies are great additions to any niche market. If your space is set up for it, consider opening a small restaurant. This is an effective way to serve the locals and get the word out about your establishment. Diners will often walk off their meal in the store; this is a great time to catch them, as their recent meal is fresh on their minds and may inspire them for their next home-cooked meal.
What will you name your business?
Choosing the right name is very important. We recommend checking if the business name you choose is available as a web domain and securing it early so no one else can take it.
STEP 2: Form a legal entity
Establishing a legal business entity such as an LLC prevents you from being personally liable if your asian grocery store is sued. There are many business structures to choose from including: Corporations, LLC's, and DBA's.
You should also consider using a registered agent service to help protect your privacy and stay compliant.
For most small businesses forming an LLC is a great option, but if you still want to weigh all your options check our our article, What Structure Should I Choose for My Business?
STEP 3: Register for taxes
You will need to register for a variety of state and federal taxes before you can open for business.
In order to register for taxes you will need to apply for an EIN. It's really easy and free!
You can acquire your EIN for free through the IRS website, via fax, or by mail. If you would like to learn more about EINs and how they can benefit your LLC, read our article, What is an EIN?.
STEP 4: Open a business bank account & credit card
Using dedicated business banking and credit accounts is essential for personal asset protection.
When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your business is sued. In business law, this is referred to as piercing your corporate veil.
Open a business bank account
- This separates your personal assets from your company's assets, which is necessary for personal asset protection.
- It also makes accounting and tax filing easier.
Get a business credit card
- This helps you separate personal and business expenses by putting your business' expenses all in one place.
- It also builds your company's credit history, which can be useful to raise money and investment later on.
STEP 5: Set up business accounting
Recording your various expenses and sources of income is critical to understanding the financial performance of your business. Keeping accurate and detailed accounts also greatly simplifies your annual tax filing.
STEP 6: Obtain necessary permits and licenses
Failure to acquire necessary permits and licenses can result in hefty fines, or even cause your business to be shut down.
Federal Business Licensing Requirements
There are federal regulations regarding what can and cannot be added to, sold as, and processed with food. Attached is a resource from the Food and Drug Administration detailing the process of starting a food business: How to Start a Food Business
State & Local Business Licensing Requirements
Certain state permits and licenses may be needed to operate an Asian grocery store business. Learn more about licensing requirements in your state by visiting SBA’s reference to state licenses and permits.
Most businesses are required to collect sales tax on the goods or services they provide. To learn more about how sales tax will affect your business, read our article, Sales Tax for Small Businesses.
For information about local licenses and permits:
- Check with your town, city or county clerk’s office
- Get assistance from one of the local associations listed in US Small Business Associations directory of local business resources.
Certificate of Occupancy
An Asian grocery store business is generally run out of a storefront or standalone building. Businesses operating out of a physical location typically require a Certificate of Occupancy (CO). A CO confirms that all building codes, zoning laws and government regulations have been met.
- If you plan to lease a location:
- It is generally the landlord’s responsibility to obtain a CO.
- Before leasing, confirm that your landlord has or can obtain a valid CO that is applicable to an Asian grocery store business.
- After a major renovation, a new CO often needs to be issued. If your place of business will be renovated before opening, it is recommended to include language in your lease agreement stating that lease payments will not commence until a valid CO is issued.
- If you plan to purchase or build a location:
- You will be responsible for obtaining a valid CO from a local government authority.
- Review all building codes and zoning requirements for your business’ location to ensure your Asian grocery store business will be in compliance and able to obtain a CO.
When selling food, you will need licensing from a local health department; all establishments serving food are required to pass a health inspection. Tips for faring well on a health inspections
STEP 7: Get Business Insurance
Insurance is highly recommended for all business owners. If you hire employees, workers compensation insurance may be a legal requirement in your state.
STEP 8: Define your brand
Your brand is what your company stands for, as well as how your business is perceived by the public. A strong brand will help your business stand out from competitors.
How to promote & market an asian grocery store
As a niche business, it’s important that you identify your target market and gear your marketing campaign towards them. Seek out opportunities to cater to the Asian community through cultural and culinary events. In doing so, you connect with them on a deeper level. You gain an understanding of their needs and, in the process, prove that you care about them.
While your primary efforts should be geared towards the Asian community, you should seize every opportunity to get the word out to others who may be unaware of the existence. Many store owners have found success attending farmer’s markets, festivals, and arts and crafts fairs. Small billboards, community newspapers, and social media should also be an integral part of your marketing strategy.
Recommended: Get started with local advertising for your business with a $300 credit from Yelp.
How to keep customers coming back
As mentioned, providing clients with stellar customer service is critical to your success. When customers have access to quality products at an affordable price, they will be more apt to return. Taking the time to offer personal service will help your staff develop relationships and prove to the community that you care about their needs. Word of mouth can take you a long way in building a profitable business.
STEP 9: Establish your Web Presence
A business website allows customers to learn more about your company and the products or services you offer. You can also use social media to attract new clients or customers.
Start An Asian Grocery Store In Your State
Select your state below for an in-depth guide on completing each of these steps in your home state.
If you are familiar with Asian dishes and have a passion for helping consumers create these authentic flavors, an Asian grocery store may be the perfect endeavor. Since interacting with the public will be critical to your business’ success, a passion for helping others would also prove beneficial.
What happens during a typical day at an asian grocery store?
Your team’s primary duty is to provide quality customer service. As an independent food store, your interaction with customers and the service you provide will define the business’ long-term success. When a client has a question or concern, address these issues with speed and respect.
Additionally, you will need to;
- Manage inventory, reordering supplies whenever necessary
- Price products and stock shelves
- Keep the establishment clean and orderly at all times
- Advertise and network to ensure your business grows
- Develop and nurture relationships with regular customers, as well as distributors
- Remain abreast of new trends in Asian cuisine
Additionally, you or a member of your staff will need to closely track inventory, manage the business’ finances, and handle tasks associated with payroll.
What are some skills and experiences that will help you build a successful asian grocery store?
Since the success of your business is heavily reliant on strong customer service, it is critical that you possess strong interpersonal skills. To lessen the language barrier gap, some specialty food stores have a staff member who is able to speak related languages. As part of your customer service strategy, maintain an open line of communication with your regular customers, asking for feedback and product requests.
Managing a grocery store is a very detail-oriented business. Previous experience in the retail and/or grocery industry would prove beneficial. This hands-on experience will provide insight into how inventory should be managed and priced and will help develop the skills necessary to build profitable relationships with distributors. While not required, experience in an Asian restaurant would prove advantageous. Knowledge regarding which flavors complement which foods will assist you in educating clients new to Asian fare.
What is the growth potential for an asian grocery store?
As previously mentioned, market demand in your area will define your grocery’s success. With a well thought-out business plan, and investment in the right location, this niche business has the potential to thrive. Many Asian food store owners have realized such success that they were able to open multiple locations throughout the community.
TRUiC's YouTube Channel
For fun informative videos about starting a busines visit the TRUiC YouTube Channel or subscribe below to view later.
One of the greatest resources an entrepreneur can have is quality mentorship. As you start planning your business, connect with a free business resource near you to get the help you need.
Having a support network in place to turn to during tough times is a major factor of success for new business owners.
What are some insider tips for jump starting an asian grocery store?
It’s important to remember why consumers shop at specialty stores. They are looking for unique food items and enjoy the variety that comes with shopping at a niche market. For the right price, many are willing to sacrifice and purchase a little lower quality.
How and when to build a team
While many are tempted to manage their startup business alone, this is not advisable. The first four to six months are a critical time. If you are too busy stocking shelves and answering the phone, other aspects of the business will suffer. When hiring staff members, carefully consider each applicant. They will be an integral part of your business’ success. Choose individuals that are knowledgeable and take pride in their work, as well as your business’ long-term success.