Start a mexican grocery store by following these 10 steps:
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 guide to starting your mexican grocery store. These steps will ensure that your new business is well planned out, registered properly and legally compliant.
Check out our How to Start a Business page.
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 much can you charge customers?
- What will you name your business?
Luckily we have done a lot of this research for you.
What are the costs involved in opening a mexican grocery store?
Initial costs will mainly be focused on your brick and mortar location, as you have to rent or buy a store location. Following this investment, you will need to earmark a substantial amount of money on renovating, updating, and creating a functioning grocery store floor plan. It may be possible to purchase a grocery store location as a turnkey space, ready for customers in a short amount of time, but be cautious as to why the previous owner is selling the business. From here, you will need;
- Business and employee insurance
- Utilities and internet service
- Commercial trash and recycling services
- Advertising and marketing
- Stocking your shelves
What are the ongoing expenses for a mexican grocery store?
Other than rent or mortgage payments, phone, internet, and utilities, the majority of your ongoing costs will be restocking your shelves. It is advisable to continue to work heavily with a few select distributors or suppliers to help create opportunities for deals on quantity or repeat orders. Many of your product suppliers will be understanding of your specialty status, as they are often in the same position of offering specialty items to a limited customer base. Use your communication and persuasion skills wisely.
Who is the target market?
Primarily, you will be targeting Mexican families and restaurants, while customers who crave authentic culinary recipes may also be a subset of your customer base who will spread the word about your business to seemingly unrelated potential customers, only to see your business branch out in new and profitable directions.
How does a mexican grocery store make money?
Money for your business will be generated through the sales of your products.
How much can you charge customers?
Pricing should be relative to the other specialty stores or "ethnic" sections in larger chain stores. Your pricing should be competitive, yet profitable.
How much profit can a mexican grocery store make?
The earnings are varied, depending on the strength of the customer base you attract. Clearing $75,000 annually would be considered a good profit margin, but beware of large chain supermarkets who can cut into your profit via bulk buys and pre-determined supply chains. work to make your store unique.
How can you make your business more profitable?
Many successful Mexican grocery stores find that offering non-perishable, yet traditional Mexican or Hispanic items, such as clothing, music and media, and party/celebration supplies help offset some of the grocery costs. Additionally, many stores are coupled with restaurants, where the same items sold in the store are used in the menu items. This form of on the spot marketing is often very successful in attracting and retaining customers.
What will you name your business?
Choosing the right name is important and challenging. If you don’t already have a name in mind, visit our How to Name a Business guide or get help brainstorming a name with our Mexican Grocery Store Name Generator
When registering a business name, we recommend researching your business name by checking:
- Your state's business records
- Federal and state trademark records
- Social media platforms
- Web domain availability.
It's very important to secure your domain name before someone else does.
STEP 2: Form a legal entity
Establishing a legal business entity such as an LLC or corporation protects you from being held personally liable if your mexican grocery store is sued.
Form Your LLC
Read our Guide to Form Your Own LLC
Recommended: You will need to elect a registered agent for your LLC. LLC formation packages usually include a free year of registered agent services. You can choose to hire a registered agent or act as your own.
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?.
Small Business Taxes
Depending on which business structure you choose, you might have different options for how your business will be taxed. For example, some LLCs could benefit from being taxed as an S corporation (S corp).
You can learn more about small business taxes in these guides:
There are specific state taxes that might apply to your business. Learn more about state sales tax and franchise taxes in our state sales tax guides.
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.
Additionally, learning how to build business credit can help you get credit cards and other financing in your business's name (instead of yours), better interest rates, higher lines of credit, and more.
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.
Recommended: Read our Best Banks for Small Business review to find the best national bank, credit union, business-loan friendly banks, one with many brick-and-mortar locations, and more.
Open net-30 accounts
When it comes to establishing your business credit, net-30 vendors are considered the way to go. The term "net-30," which is popular among vendors, refers to a business credit arrangement where the company pays the vendor within 30 days of receiving goods or services.
Net-30 credit terms are often used for businesses that need to obtain inventory quickly but do not have the cash on hand.
Besides establishing business relationships with vendors, net-30 credit accounts get reported to the major business credit bureaus (Dun & Bradstreet, Experian Business, and Equifax Business Credit). This is how businesses build business credit so they can qualify for credit cards and other lines of credit.
Recommended: Read our guide on the best net-30 vendors so you can start building business credit now, so you never have to worry about cash flow in the future. Keep in mind that poor cash flow is the #1 reason businesses fail!
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 a Mexican 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
A Mexican grocery store business is generally run out of a storefront. 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 a Mexican 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 Mexican 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
Just as with licenses and permits, your business needs insurance in order to operate safely and lawfully. Business Insurance protects your company’s financial wellbeing in the event of a covered loss.
There are several types of insurance policies created for different types of businesses with different risks. If you’re unsure of the types of risks that your business may face, begin with General Liability Insurance. This is the most common coverage that small businesses need, so it’s a great place to start for your business.
Learn more about General Liability Insurance.
Another notable insurance policy that many businesses need is Workers’ Compensation Insurance. If your business will have employees, it’s a good chance that your state will require you to carry Workers' Compensation Coverage.
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.
If you aren't feeling confident about designing your small business logo, then check out our Design Guides for Beginners, we'll give you helpful tips and advice for creating the best unique logo for your business.
How to promote & market a mexican grocery store
Small billboards, local papers, community events and groups, online forums and social media, and business cards and flyers, strategically placed regionally will begin to draw customers in, with secondary growth derived from word of mouth customer reviews and recommendations.
How to keep customers coming back
Be personable. Talk to your customers and ask what they would desire in a grocery store. Some products may need to be imported from out of the U.S., but they will add to the authentic nature of your store. Get to know your return customers more personally and give them a sense of community within your local grocery store.
Still unsure about what kind of business you want to start? Check out the latest Small Business Trends to help inspire you.
STEP 9: Create your business website
After defining your brand and creating your logo the next step is to create a website for your business.
While creating a website is an essential step, some may fear that it’s out of their reach because they don’t have any website-building experience. While this may have been a reasonable fear back in 2015, web technology has seen huge advancements in the past few years that makes the lives of small business owners much simpler.
Here are the main reasons why you shouldn’t delay building your website:
- All legitimate businesses have websites - full stop. The size or industry of your business does not matter when it comes to getting your business online.
- Social media accounts like Facebook pages or LinkedIn business profiles are not a replacement for a business website that you own.
- Website builder tools like the GoDaddy Website Builder have made creating a basic website extremely simple. You don’t need to hire a web developer or designer to create a website that you can be proud of.
Using our website building guides, the process will be simple and painless and shouldn’t take you any longer than 2-3 hours to complete.
STEP 10: Set up your business phone system
Getting a phone set up for your business is one of the best ways to help keep your personal life and business life separate and private. That’s not the only benefit; it also helps you make your business more automated, gives your business legitimacy, and makes it easier for potential customers to find and contact you.
There are many services available to entrepreneurs who want to set up a business phone system. We’ve reviewed the top companies and rated them based on price, features, and ease of use.
Recommended: Find the best phone system for your business; check out our review of the Best Business Phone Systems 2021.
Start A Mexican Grocery Store In Your State
Select your state below for an in-depth guide on completing each of these steps in your home state.
Is this Business Right For You?
If your background includes time spent working for grocery or convenience store, have managerial experience or even extensive retail experience, as well as a shared love for traditional and authentic Mexican flavors, this may be the perfect endeavor.
Want to know if you are cut out to be an entrepreneur?
Take our Entrepreneurship Quiz to find out!
What happens during a typical day at a mexican grocery store?
Your biggest concern, day to day will be servicing your customers and making sure your shelves stay stocked and prepared for new and existing customers. Interaction with your patrons is quite critical, as you are often an independent store, unable to lean on the strength of a chain store's reputation and advertising. Therefore, you must promote your business through positive word of mouth and store interactions. Additionally, you will need to;
- Conduct inventories and re-order products
- Advertise and market through various outlets, both free and paid
- Create relationships with your distributors and cultivate new contacts for products and supplies
- Study trends in authentic and new traditional Mexican and Hispanic cuisine
What are some skills and experiences that will help you build a successful mexican grocery store?
Since this type of business relies heavily on capturing and retaining customer business and loyalty, it is critical that you can communicate clearly and effectively, including the ability to speak related languages. Interact with your customers to keep a pulse of what they want. And, as mentioned previously, experience in retail or grocery stores will be quite beneficial in understanding the supply side of the business. Creating positive relations with your suppliers and distributors will help streamline much of your business, as well as drive down overhead costs. Finally, experience as a restaurateur or chef may also give great insight into the needs or flavors which will be the best draws for customers.
What is the growth potential for a mexican grocery store?
Depending on the area in which you are located, you can create a thriving and profitable store, capable of becoming a niche location for customers looking for authentic and traditional Mexican cuisine options. Before deciding to open this type of store, make sure you've researched the location and the prevalence of other similar stores in your area. Since this is a business which could be classified as specialty, you will want to make sure there isn't over-saturation, which will fracture the business you may receive.
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Take the Next Step
Find a business mentor
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.
Learn from other business owners
Want to learn more about starting a business from entrepreneurs themselves? Visit Startup Savant’s startup founder series to gain entrepreneurial insights, lessons, and advice from founders themselves.
Resources to Help Women in Business
There are many resources out there specifically for women entrepreneurs. We’ve gathered necessary and useful information to help you succeed both professionally and personally:
If you’re a woman looking for some guidance in entrepreneurship, check out this great new series Women in Business created by the women of our partner Startup Savant.
What are some insider tips for jump starting a mexican grocery store?
Since your store will be considered a specialty or niche business, you'll need to tap into the local communities which will most likely support your business. Look for opportunities to present your store through Mexican and Hispanic community or cultural events, culinary exhibitions, and other related groups. You should aim your marketing efforts at those in the community who would be most interested in the authentic foods and flavors your business will sell. At the same time, you also want to market to other members of your local community who may be unaware of the existence of your type of business. Look for opportunities locally to introduce a Mexican grocery store to a non-Mexican or Hispanic group who appreciates authentic flavors and products. Farmer's markets and arts and crafts fairs may be worthwhile events to target for advertising or even a booth to present your wares.
How and when to build a team
From the beginning, you will need at least a few other employees on hand to help with retail sales and customer service, stocking shelves and store maintenance, as well as an accountant or bookkeeper, if you are not willing or able to tackle that job yourself. Keep in mind that the startup and initial 4-6 months of being open will be a critical time to create a foothold for your business. You will need a capable and multi-faceted staff on board to help you manage the multitude of tasks you’ll be handling during this period of time. Choose wisely.