Start an olive oil store by following these 9 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 step guide to starting your olive oil 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 olive oil store?
Opening an olive oil store is a significant investment. While it is possible to attempt to open an olive oil store on the cheap, starting with a proper budget provides a better chance of success.
Most of the startup capital will go toward securing a location, fitting out the store, staffing, and training.
Location - Although it is unnecessary to rent a large space to have a successful store, most stores in this industry are under 1000 square feet, a good location is critical. The best locations have a large amount of targeted foot traffic. It does no good to have lots of people walking by a store if they are not the kind of people who have an interest in specialty foods.
Two of the best areas to set up a shop are close to other high-end food shops or in an area popular with tourists. Both locations attract the right sort of shoppers who have both the time to shop and the money to buy premium products. Rents in these popular areas are regularly higher than in other locations.
Fitting the Store - Furnishing and stocking a store costs money. While it is easy to go overboard on either decorations or products, there is no need. A small well-chosen and rotating stock ensures freshness and keeps costs down.
Labor and training - Well-trained employees are the cornerstone of a successful olive oil store. Skimping on training is a mistake. Don’t do it.
What are the ongoing expenses for an olive oil store?
Ongoing expenses include rent, stock, training, utilities, and labor.
Who is the target market?
Customers who shop in olive oil stores are normally older, well-off, and looking for something different from what is available at the local specialty grocery stores. The best customers are those who are willing to pay a higher price for a natural and unique product once they understand why that product is superior to all others. Customers at olive oil stores often consider themselves gourmands and appreciate the ability to learn about the products they use.
How does an olive oil store make money?
Olive oil stores make the majority of their income through in-person sales of products at their retail locations. A few stores offer online sales. Many stores do charge for tastings and classes and this income can account for a moderate percentage of a shop's revenue.
How much can you charge customers?
Premium olive oil can cost much more than you think, but the price olive oil stores can get away with charging their customers depends on the market. Generally, olive oil shops charge more for olive oil than other specialty stores do — and customers will pay when a store provides a good experience.
How much profit can an olive oil store make?
Most olive oil stores make between 10 to 15 percent profit based on total product sales. The profit margin for workshops and classes are much greater.
How can you make your business more profitable?
Most olive oil stores increase their profitability by selling balsamic vinegar, olive oil soap, containers, and other food-related specialty products.
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.
After registering a domain name, consider setting up a professional email account (@yourcompany.com). Google's G Suite offers a business email service that comes with other useful tools, including word processing, spreadsheets, and more. Try it for free
STEP 2: Form a legal entity
Establishing a legal business entity such as an LLC prevents you from being personally liable if your olive oil 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.
State & Local Business Licensing Requirements
Certain state permits and licenses may be needed to operate an olive oil 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 more 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 olive oil store is usually 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 olive oil store:
- 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 olive oil 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 an olive oil store:
- 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 olive oil business will be in compliance and able to obtain a CO.
If you plan to sell food at your Olive Oil business, 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 inspection can be found here.
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 olive oil store
The approach to promotion and marketing of an olive oil store depends on the store's target customers and its location. Stores which cater to tourists should focus on advertising online and attending local events aimed at tourism. Stores with predominantly local residents as customers can focus on creating goodwill and word-of-mouth advertising through newsletters, conducting free tastings, and offering classes.
Recommended: Get started with local advertising for your business with a $300 credit from Yelp.
How to keep customers coming back
The uniqueness of an olive oil store may attract customers to come in once, but to get them to return, stores need to provide a great product, fantastic service, and a good value. A knowledgeable and friendly staff is critical to a store's success, so owners should be open to investing in the training of employees. It is also important that stores constantly update the products they carry to find which sell the best.
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 Olive Oil 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?
Foremost, an olive oil store is like any other retail store. A potential owner needs to have a background in managing a retail operation. Due to the business' tiny niche, a new owner should also have extensive knowledge about olive oil and olive oil-related products, besides a real passion for the products.
What happens during a typical day at an olive oil store?
Besides handling the normal daily operations associated with all shops, including ordering, receiving, stocking, selling, and bookkeeping, owners of olive oil shops have several unique day-to-day responsibilities. Education plays a huge role in creating a profitable olive oil retail business. This means owners need the ability to train their staff effectively and to teach new and existing customers about a store's complete product line.
What are some skills and experiences that will help you build a successful olive oil store?
Besides retailing skills, an owner of an olive oil store needs to have extensive knowledge about their store's products in addition to knowledge about olive oil in general. Owners who have experience teaching and cooking will have an advantage when holding classes and tastings or demonstrating how to cook using olive oil. Some local municipalities may require food safety certification, so earning a ServSafe certificate or other food handling certificate may be beneficial.
What is the growth potential for an olive oil store?
Although the popularity of olive oil shops in the US has wavered somewhat over the past few years, the sale numbers for premium olive oil are still strong. One of the largest barriers to the continued popularity of this type of business comes from the potential for local or national bans on "fill-your-own" olive oil stores similar to the ban enacted in Britain in 2014. Industry insiders predict that as more Americans become more aware of the superiority of artisan olive oil, sales will bounce back.
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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.
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 an olive oil store?
An owner needs to learn as much as he can before opening a store. Owners who are not confident in their knowledge of olive oil can get a head start by enrolling in a course. The Olive Oil School offers several classes which are worth investigating. Those entirely new to retail sales will tremendously benefit by partnering with a company which offer mentoring and franchising opportunities.
How and when to build a team
Owners should start building a solid team of trained employees from Day 1 through on-the-job training and off-site education.