How to Write a Convenience Store Business Plan: Complete Guide

Whether you’re looking to raise funding from private investors or to get a loan from a bank (like a SBA loan) for your convenience store, you will need to prepare a solid business plan.

In this article we go through, step-by-step, all the different sections you need in the business plan of your convenience store. Use this template to create a complete, clear and solid business plan that get you funded.

For more information on convenience store businesses, make sure to read our guides below:
How Much Does It Cost to Open a Convenience Store?
6 Strategies to Increase Your Convenience Store Sales & Profits
How to Open a Convenience Store in 11 Steps?

1. Convenience Store Executive Summary

The executive summary of a business plan gives a sneak peek of the information about your business plan to lenders and/or investors.

If the information you provide here is not concise, informative, and scannable, potential lenders and investors will lose interest.

Though the executive summary is the first and the most important section, it should normally be the last section you write because it will have the summary of different sections included in the entire plan.

Why do you need a business plan for a convenience store?

The purpose of a business plan is to secure funding through one of the following channels:

  • Obtain bank financing or secure a loan from other lenders (such as a SBA loan)
  • Obtain private investments from investment funds, angel investors, etc.
  • Obtain a public or a private grant

How to write an executive summary for a convenience store?

Provide a precise and high-level summary of every section that you have included in the business plan of your convenience store business. The information and the data you include in this segment should grab the attention of potential investors and lenders immediately.

Also make sure that the executive summary doesn’t exceed 2 pages in total: it’s supposed to be a summary for investors and lenders who don’t have time to scroll through 40-50 pages, so keep it short and brief.

The executive summary usually consists of 5 major sub-sections:

  • Business overview: start by introducing your convenience store business, where it is located, the products you will sell, and the pricing strategy you want to implement. Mention what sets you apart from other businesses. For example, you may offer a hyper convenience store complete with a sit-down restaurant, bakery, pharmacy, and more.
  • Market analysis: summarise the market where you will operate and provide a brief about your target market, target audience, spending capability, etc. Also give certain data points about the convenience store industry in the area where you want to operate (size and growth), as well as an overview of the main competitors, etc.
  • People: introduce your convenience store business’ management and employee structure. Provide a brief (no more than a couple of sentences each) of the knowledge and experience of the team. Also, mention how the company will be structured (management roles and reporting lines)
  • Financial plan: how much profit and revenue do you expect in the next 5 years? When will you reach the break-even point and start making profits? You can include here a chart with your key financials (revenue, gross profit, net profit)
  • Funding ask: what loan/investment/grant are you seeking? How much do you need? How long will this last?
An example of a Funding Ask slide for a convenience store business plan (source)

Download the Convenience Store budget template

  • Lender & investor-friendly
  • Easy-to-use Excel template
  • CPA-developed financials
  • 30+ charts and metrics

2. Convenience Store Business Overview

In this segment of the business plan, you will provide details about the convenience store.

You must answer here some important questions that potential investors and lenders often ask about your business and operations. Here are some examples of questions you must answer:

  • What is the rationale behind you opening a convenience store in your area today?
  • Where will the business be located and why did you select that location?
  • What type of products will you sell through your store?
  • What will be your pricing strategy and why?
  • What will be the legal structure of your company?

a) History of the Project

Any business overview must start with explaining the history of the project. There are 2 components here:

  • Passion & experience of the business owner
  • Rationale behind starting a convenience store today

Passion & experience

You may or may not have prior experience. If you have experience, speak about it and how it will help you to run your business. For instance, you may have worked as a store manager at a popular convenience store for 8 years. Now you want to start your own convenience store business and use your experience and knowledge to run the store efficiently.

Rationale

Is there a certain problem (or perhaps, a set of problems) that your convenience store will try to solve when it comes into existence? For example, there may not be any hyper convenience store in the location that offers a sit-down restaurant, bakery, pharmacy, and other facilities.

But that’s not all! The market must be suitable for a business to exist and thrive. For instance, if you are trying to open a hyper convenience store in an area where there are highly established standalone pharmacies and restaurants with a loyal customer base, you may find it incredibly difficult to make a dent in their customer base.

Similarly, if the target customer base in the location prefers a traditional convenience store and you want to open a limited-selection convenience store, it will not work. 

b) Business Model

This section of the Business Overview should explain the model you want to adopt for your convenience store business. For example:

  • Will you buy an existing convenience store or an existing franchise convenience store, or will you start a new one from scratch?
  • Where will the store be located and what made you select that location?
  • What type of convenience store will you open?
  • What type of products will you focus on?
  • What will be the pricing strategy and why will you select that strategy?

What are the different types of convenience stores?

There are various types of convenience stores that you can select. You will start with one vital decision. Either you will buy an existing store (individually owned or a franchise) or you will start from scratch. Either way, there are different types of convenience stores you can start. Here are of them:

  • Traditional stores: These are generally 2,400 to 2,500 square feet in size and offer a variety of products including baked products, dairy products, beverages, tobacco, beauty & health products, frozen & fresh meat, gasoline, limited produce items, etc.
  • Expanded convenience stores: These ones are bigger with sizes ranging between 2,800 and 3,600 square feet. These stores will either offer more grocery options, or they may include a fast-food section with seating arrangements.
  • Hyper convenience stores: These stores are the largest of all with an average size of anywhere between 4,000 and 5,000 square feet. They have different product and service departments. For instance, they may have a separate department for bakery products, a different section for a pharmacy, a sit-down restaurant, etc.
  • Limited selection convenience stores: They are usually small with an area of 1,500 to 2,200 square feet. They sell a mix of grocery products, but the offerings are fewer than traditional stores. Food offerings are also limited to smaller things like hot dogs, popcorn, nachos, etc.
  • Mini convenience stores: Not exceeding 800 to 1,200 square feet in size, these stores have very limited grocery offerings. For food service, they may offer no more than prepared sandwiches. These stores may operate 24 hours a day, but some may choose to operate only 18 hours.
  • Kiosks: These are the smallest of all with the store area not exceeding 800 square feet (usually smaller). They mostly focus on selling gasoline, but some fast-moving items such as confectionaries, snacks, beverages, etc. can also be found.

c) Products

The type of convenience store you want to open will define the type of products you offer. Of course, don’t provide a complete list of all the products you will sell here. Instead, you can list the main categories such as:

  • Bakery products
  • Frozen and fresh meat & fish
  • OTC medicines & beauty products
  • Restaurant (in case of a hyper convenience store)
  • Gasoline
  • Fast-moving products (tobacco, snacks, etc.)

d) Pricing Strategy

Strategy

This is where you will provide an overview of your pricing strategy. For instance, you may charge lower than your competitors because you may be enjoying huge wholesale discounts during inventory acquisition, and you may decide to pass on some benefits to your customers.

Similarly, you may decide to charge higher for certain items than your competitors because you offer 100% organic options for those products.

Pricing table

While it may not be possible to provide a proper pricing table for all products and services that you offer, it is still a great idea to provide a table that gives an overview of your pricing structure.

You can provide an average price based on categories. For instance, you can do something like this:

  • Baked products: $1.25 to $12.45
  • Frozen meat: $4.5 to $8.60
  • Etc.

However, don’t go into extreme details because potential investors are not interested in the nitty-gritty of your pricing. They just need the big picture to assess the profitability, because they will tie your pricing strategy with financial projections.

e) Legal Structure

Finally, your business overview section should specify what type of business structure you want. Is this a corporation or a partnership (LLC)? Who are the investors? How much equity percentage do they own? Is there a Board of Directors? If so, whom? Do they have experience in the industry?

Download the Convenience Store budget template

  • Lender & investor-friendly
  • Easy-to-use Excel template
  • CPA-developed financials
  • 30+ charts and metrics

3. Convenience Store Market Overview

A complete understanding of the market where you want to operate is important for the success of your business. That’s also something you must showcase in your business plan.

For example, if you intend to sell pricey organic products through your convenience store in a low-income area, you will probably not succeed. You must understand the needs and the spending capacity of your target market and tailor your product offerings accordingly.

Therefore, you must cover here 3 important areas:

  • Industry size & growth: how big is the convenience store business industry in your area? What is its growth rate (or decline rate) and what are the factors contributing to its growth or decline?
  • Competition overview: how many competitors are there? How do they compare vs. your business? How can you differentiate yourself from them?
  • Customer analysis: who is your target audience? What type of products do they usually buy at convenience stores? Do they prefer convenience stores to be open 24×7? What is their average bill size per visit? How frequently do they visit convenience stores?

a) Industry size & growth

How big is the convenience store business industry in the US?

According to Statista, the total sales of convenience stores in the US stood at $532.9 billion in 2020. Of this, $243.1 billion came from in-store sale alone (vs. gas sales).

In total, there were 150,274 convenience stores in the US in 2020, of which the vast majority are independent stores.

In other words, each store generates an average annual turnover $1,600,000 (excluding gas sales).

Number of convenience stores in the US (2014-2021)

How big is the convenience store business industry in your area?

After getting a clear picture of the convenience store industry in the US as a whole, narrow down to your location. Unfortunately, it’s likely that you won’t find the number anywhere (at least not for free).

In that case, you can use our guide to estimate the TAM, SAM, and SOM for your business. Here is an example of how to do it:

We know the average convenience store in the US generates an annual turnover of $1.6 million (in-store sales only). Therefore, if the location where you will operate has a total of 40 convenience stores, the convenience store industry in your area is worth approximately $64 million.

How fast is the convenience store business industry growing in your area?

According to IBISWorld, the convenience store market in the US registered an annual growth rate of 3.1% from 2017 to 2022.

What about the location where you want to open your convenience store? US national averages can be a great addition to your business plan, yet they don’t necessarily help to assess the convenience store business industry where you want to open your store. For example, the industry might be growing in the US, but declining in your region for a number of reasons (businesses shutting down due to losses, etc.).

As you likely won’t find this information online, you can instead rely on the number of convenience stores in the location to calculate the average growth rate of the industry in your area.

For example, if the region had only 34 convenience stores in 2017 and 40 in 2022, you can assume that the average annual growth rate of the convenience store industry in the area is 3.53%, in line with the US national average.

b) Competition Overview

Studying your competitors’ business models is vital. You need to understand what makes them successful or why they fail. A clear understanding of their business model, the products they sell, their marketing strategies, etc., will allow you to provide a better service.

If your competitors are offering nearly the same products, then what is their market share and how do they market their products & services to attract new customers?

It is always a good idea to do some research (if necessary, you may consider physically visiting your competitors without revealing your business intentions) and create a comparative table summarizing their respective product offering, marketing strategy, store size, etc.

Here is a sample table that you can use:

Competitor #1Competitor #2Competitor #3
Locationxxxxxx
Business modelTraditional Convenience StoreExpanded Convenience StoreLimited Selection Convenience Store
Pricingxxxxxx
Store size2,450 sq. ft.3,200 sq. ft.1,800 sq. ft.
Staff7106

Convenience Store SWOT Analysis

SWOT stands for Strength, Weakness, Opportunities, and Threats. This analysis will help lenders and investors better understand how you compare vs. competitors as well as the overall risk and reward profile of your business.

Here is a sample that you can use as a reference:

  • Strengths: A master’s degree in business management, 9 years of experience as a general manager in a convenience store chain
  • Weaknesses: Startup cost, no initial brand reputation
  • Opportunities: Steady growth in residential population as people from other places are migrating to the area owing to its low cost of living, only 2 convenience stores in a 6-mile radius and 3 stores in a 12-mile radius
  • Threats: Existing stores planning on opening new stores

c) Customer Analysis

This is the sub-section where you will provide a detailed analysis of your target audience. Some important points that you must include in your customer analysis include:

  • What in-store products do they usually buy (apart from gas)?
  • How long do they spend in a convenience store?
  • What is the average amount they spend at a convenience store each month?
  • Do they purchase beauty and OTC health products from convenience stores?
  • What is the percentage of smokers and tobacco users in the area? This will give you a fair idea of whether you should stock cigarettes and other tobacco products or not

You can add as many data points as required to validate your business decision. The idea here is to display your deep understanding of the target audience and their needs, preferences, and expectations. This knowledge can help you to tailor your products & services to attract new customers.

Download the Convenience Store budget template

  • Lender & investor-friendly
  • Easy-to-use Excel template
  • CPA-developed financials
  • 30+ charts and metrics

4. Sales & Marketing Strategy

This is the section where you outline your customer acquisition strategy. Try to answer the following questions:

  • What is your Unique Selling Proposition (USP)?
  • What are the different marketing strategies you will use?
  • How do you intend to track the success of your marketing strategy?
  • What is your CAC or customer acquisition cost?
  • What is your marketing budget?

What marketing channels do convenience stores use?

A few marketing channels that convenience store businesses typically use are:

  • Signages (most common)
  • Local listings
  • Loyalty programs
Signage still is by far the largest marketing channel for convenience stores

What is your Unique Selling Proposition (USP)?

In other words, how do you differentiate yourself vs. competitors? This is very important as you might need to win customers from competitors.

A few examples of USPs are:

  • Location: your store may be located in a very busy area
  • Product variety: you may offer varied products for all your customers’ need
  • Pricing: you may have cheaper products vs. competitors

Your USP will depend on your business model, competitor analysis, and target audience. Whatever your USP be, it should be clear and appealing to your target audience.

5. Management & People

You must address 2 things here:

  • The management team and their experience/track record
  • The organizational structure: different team members and who reports to whom?

Management

Small businesses often fail because of managerial weaknesses. Thus, having a strong management team is vital. Highlight the experience and education of senior managers that you intend to hire to oversee your convenience store business.

Describe their duties, responsibilities, and roles. Also, highlight their previous experience and explain how they succeeded in their previous roles.

It is also important that you explain how their experiences and qualifications help you in implementing the convenience store business you are proposing. If they have specialized training and experience (for example, 9 years of general manager experience in a leading convenience store chain, 7 years of vendor management experience, etc.), add that information.

Organization Structure

Even if you haven’t already hired a general manager, stockist, salesperson, cashier, guard, and other relevant staff members, you must provide a flowchart of the organizational structure defining hierarchy and reporting lines.

Organizational structure example for a franchise convenience store

6. Financial Plan

The financial plan is perhaps, with the executive summary, the most important section of any business plan for a convenience store.

Indeed, a solid financial plan tells lenders that your business is viable and can repay the loan you need from them. If you’re looking to raise equity from private investors, a solid financial plan will prove them your convenience store is an attractive investment.

There should be 2 sections to your financial plan section:

  • The startup costs of your project (if you plan to start a new store, add a new store to your chain, etc.)
  • The 5-year financial projections of your convenience store(s)

a) Startup Costs

Before we expand on 5-year financial projections in the following section, it’s always best practice to start with listing the startup costs of your project. For a convenience store business, startup costs are all the expenses you incur before you start making sales. These expenses typically are:

  • The acquisition of the real estate (if you buy)
  • The lease deposit (if you rent)
  • The renovation and equipment costs
  • Business insurance, etc.

Of course, the startup costs depend on a number of factors, like the number of stores you plan to open, their size, the products you will sell, etc.

For example, it costs on average $290,000 to $351,000 to start a 1,500 sq. ft. convenience store (assuming you need to do a lot of renovation and overhaul).

Note that these costs are for illustrative purposes and may not be fully relevant for your business. For more information on how much it costs to open and run a convenience store, read our article here.

Startup costAmount
Renovation & equipment$250,000 – $300,000
Initial inventory$20,000
Lease deposit$12,000 – $16,000
POS system$3,000 – $10,000
Legal expenses and licenses$2,000
Marketing (Business website)$1,000
Business insurance$2,000
Total$290,000 – $351,000

Download the Convenience Store budget template

  • Lender & investor-friendly
  • Easy-to-use Excel template
  • CPA-developed financials
  • 30+ charts and metrics

b) Financial Projections

In addition to startup costs, you will also need to build a solid 5-year financial model in the business plan of your convenience store.

Note that your financial projections should be built using a spreadsheet (e.g. Excel or Google Sheets) and presented in the form of tables and charts in your business plan.

As usual, keep it concise here and save details (for example detailed financial statements, financial metrics, key assumptions used for the projections) for the appendix instead.

Your financial projections should answer at least the following questions:

  • How much revenue do you expect to generate over the next 5 years?
  • When do you expect to break even?
  • How much cash will you burn until you get there?
  • What’s the impact of a change in pricing (say 10%) on your margins?
  • What is your average customer acquisition cost?

You should include here your 3 financial statements (income statement, balance sheet and cash flow statement). This means you must forecast:

  • The number of customers / orders over time ;
  • Your expected revenue ;
  • Operating costs to run the business ;
  • Capex (cost to renovate / build your store, furniture and equipment, etc.)

When projecting your financials, make sure to sensitize sales volume (customers), pricing as well as the expenses (inventory, salaries, etc.). Indeed, a small change in these assumptions may have a significant impact on your revenues, and most importantly, your profits.

Source: Convenience store financial model template

7. Use of Funds

This is the last section of the business plan of your convenience store. Now that we have explained what your business model is, what type of products you sell, how you get customers, etc., this section must now answer the following questions:

  • How much funding do you need?
  • What financial instrument(s) do you need: is this equity or debt, or even a free-money public grant?
  • How long will this funding last?
  • Where else does the money come from? If you apply for a SBA loan for example, where does the other part of the investment come from (your own capital, private investors?)

If you raise debt:

If you raise equity

  • What percentage ownership are you selling as part of this funding round?
  • What is the corresponding valuation of your business?

Use of Funds

Any business plan for a convenience store should include a clear use of funds section. This is where you explain how the money will be spent.

Will you spend most of the loan / investment in paying your employees’ salaries and the COGS (inventory)? Or will it cover mostly the cost for acquiring the real estate and renovations?

For the use of funds, we also recommend using a pie chart like the one we have in our financial model template where we outline the main expenses categories as shown below.

An example of a Funding Ask slide for a convenience store business plan (source)

Download the Convenience Store budget template

  • Lender & investor-friendly
  • Easy-to-use Excel template
  • CPA-developed financials
  • 30+ charts and metrics