How to Start a Corner Shop
Want to start your own corner shop? Our guide gives you all the info you need to get your business up and running.
Table of contents
- What is a corner shop?
- Create a business plan
- Legal obligations
- How much does it cost to open a corner shop?
- Finding a location
- Keep your prices competitive
- Create an incredible payment experience
- Reach your customer base
The humble corner shop — haven of sweet treats, unjudging provider of late night booze pickups and vendor of early morning milk and eggs. Every neighbourhood has its handful of corner shops that enhance the community and service its needs from dawn until dusk.
With over 50,000 operating in the UK, these retailers have a unique place in customers’ hearts. From the quaint village grocery to the 24-hour city newsagent, they’re a British institution that we’ve all come to rely on in one form or another. And while your local corner shop may seem like it’s been around since the beginning of time, you don’t need a dynasty of your own to set up shop.
If it’s your dream to work at the heart of your local community, here’s our guide to get you started. As always, our advice should be seen as just that. Before you put any of it into practice, we highly recommend you consult with legal and financial professionals to ensure this is the right venture for you.
What is a corner shop?
The corner shop a slice of quintessentially British retail. Commonly found on the intersection of a street (hence the name) the corner shop is characterised by its convenience. Most specialise in staples like milk, eggs and bread, as well as sweets, newspapers, lottery tickets and alcohol. Some also offer services like printing and photocopying, postal services and newspaper delivery.
Unlike supermarkets which often set up just outside town centres and bring customers into the area, a corner shop is right where the customers are. Often tucked away on residential streets, they’re easy to visit without so much as changing out of your slacks. And though they’ve faced fierce competition from supermarkets’ ‘local’ and ‘metro’ branches, which match or exceed their stock offering, the independent corner shop still holds its own. Customers prefer them for a number of reasons:
- They’re easy to get to, often no more than a five minute stroll away.
- Staff can be much friendlier, making the time to get to know regulars.
- They can bump into familiar faces rather than rub shoulders with strangers.
- Queues tend to be shorter.
- Corner shops often open earlier and close later (if at all) than supermarkets.
The corner shop can also adapt faster to suit the needs of its location than a supermarket chain. If a once sleepy district of town turns into a bustling nighttime hub, or a new school brings families to an area popular with senior citizens, the corner shop owner is on the front line of this change. They see the rise of new tastes and demands, and without a cumbersome supply chain it’s no problem for them to update their offering and approach.
Running a successful corner shop is all about surpassing the expectations of your regulars. However, if you make an impression on an outsider you could be the reason they move to the area — bringing you more business.
Create a business plan
Before you begin the practical setup of your corner shop, you need to create a business plan. This acts as a vital roadmap outlining where your business is headed. It’s also a helpful reality check — the first year or two of your corner shop business will come with challenges but your business plan helps you prepare. Here’s what it should include:
Your executive summary should provide a topline synopsis of the business (location, size and company ownership), as well as its objectives (or mission statement) and how you plan to meet them. You may also want to include an overview of startup costs and forecasted revenue growth (which is explained later in the business plan).
Every good business owner knows their market inside out. Understanding your competition, fluctuations in customer demand and how your location is destined to change in years to come helps you future-proof your corner shop. Your market analysis is designed to uncover trends and data that inform your business concept. Include a description of the market segmentation and your target market, then highlight your target market’s buying patterns and any gaps in the local area that your corner shop can fill.
Stock and services summary.
Describe the stock and services you intend to sell from your shop in relation to the market analysis you’ve undertaken. Include information on the markup at which stock will be sold and how you’ll source it from suppliers.
Having understood what your business is and what it does, it’s time to detail how you’ll run it. Explain your operational setup: location, premises, employee management, payment systems, stock requirements and so on.
Marketing & sales strategy.
Use insights from your market analysis to outline a strategy for promoting your business in the local area. If there’s something particularly outlandish about your approach, consider the value of regional promotion too. Design your key messages and decide on the most suitable channels to reach potential customers.
Your management skills are key to growth. No matter how much you love your business, it’s unlikely you’ll have the energy to run it from open until close every day of the week, so take the time to create a management summary. This details the members of your team, their responsibilities and the cost of their employment (wages, payroll and training).
Calculate the cost of starting up your business and detail where this money will come from. Use your market analysis to estimate customer demand, then compare stock costs with financial outlay to calculate how long it will take you to reach break-even point. Consider how long your marketing efforts will take to make an impact and what you expect that impact to be.
Due to the diverse range of stock and produce corner shops sell — including age-restricted items like alcohol, cigarettes, lottery tickets and sharps — there are many legal requirements to consider. To keep your customers, staff and premises covered with the correct insurance, look into:
- Public and product liability insurance
- Stock cover
- Employer’s liability insurance
- Personal accident insurance
- Business interruption insurance
- Business legal protection insurance
- Business buildings and contents insurance
- Personal accident insurance
Some insurance policies will neatly cover all of the above as part of a shop insurance package which you can compare online.
Beyond insurance, there are a range of business licences which you should investigate to ensure you’re operating lawfully. These include:
- Personal and premises alcohol licence
- Food premises approval
- Pavement licence
- Food business registration
- Child work permit
- Public space surveillance (CCTV) licence
- License to play background music
You should also make sure you’re fully equipped to offer a workplace pension to any staff, as it is now a legal requirement.
How much does it cost to open a corner shop?
There are a number of costs involved in opening your own corner shop. If this seems prohibitive, don’t give up — budgets can be scaled to make it happen. Here are five cost factors to consider when you open a corner shop:
The cost of renting or buying a building to house your corner shop is dictated by its location and size. If your budget is limiting, consider how you can adapt your long-term vision into something more affordable for the time being. This could even include setting up a pop-up store at a lower cost to begin with. You also need to factor in the running costs of the space such as any restoration work, rent, utilities, internet, security measures and general maintenance.
The design and layout of your corner shop speaks volumes about your brand and can attract or deter potential customers. Create detailed floor plans and research price ranges before you buy anything — what do you really need and how much can you afford? It’s best to start with the necessities then scale up over time.
Corner shops stock a huge variety of goods with different shelf lives, which means that in addition to the wholesale purchase cost of products, you’ll need to pay for suitable storage (especially for frozen and chilled goods). If you want to sell lottery tickets or travel cards you should make sure you weigh in the setup costs of offering these services too.
As well as running promotions in the lead up to launch day, you should consider which ongoing marketing efforts are worth expenditure. Ads in the local paper as well as paid social media campaigns can provide a strong return on investment when planned strategically.
Due to the size and nature of corner shops, it’s unlikely you’ll need a big team. However, it is wise to have some form of backup for those days that you’re ill or simply need a break. As well as paying employees the National Minimum Wage, factor in the cost of training, pension contributions and any benefits.
Finding a location
The location you choose should tie in with the type of business you want to run. If your dream is a no-frills corner shop serving emergency supplies, a residential area without nearby supermarkets (and other corner shops of course) is a great shout. If you’re considering a more specialist approach, for example by offering whole foods and zero-waste packaging, your location should be based in a community where there is real demand (and disposable income) for this niche. Or if you’re planning to set up shop in a densely populated urban area, consider the direction of footfall so that you can capture potential customers from competitor businesses.
Here are some key factors to think about before you set your heart on a location:
- Does it need/have parking space?
- Is there easy road access for drivers?
- How busy is the local area (down to postcode level)?
- Are there any obstructions that will make it hard for people to find you?
- What’s the ambience and demographic of the area?
- How is the area going to change in the coming months and years?
- How visible is the building itself within its surroundings?
- How vulnerable is the location to competitors?
- What opportunity is there to attract custom from other local businesses?
- Are there any local businesses (such as pubs, schools or gyms) that could increase your footfall?
- What’s the local crime rate like?
Keep your prices competitive
The corner shop is an icon of convenience, but that isn’t always enough to build customer loyalty if you’re charging them far more than the local supermarket. With supermarkets creating smaller branches, the affordability of your products and services is more important than ever. Here are three ways to keep your costs down without impacting your business.
1. Choose an affordable payment provider.
According to the Guardian, it’s estimated that by 2026 cash payments will make up just 21% of the UK total. With more customers expecting your business to offer card and mobile payment methods, there are huge benefits in reducing the cost of these transactions. To do so, choose a provider whose fees and upfront hardware costs are affordable in the short- and long-term.
2. Collaborate with local suppliers.
There’s something special about the way small businesses rally together to sustain survival. Just as you face day to day demands first-hand, so too do your suppliers, which puts you in a great position to break a deal with them. By pledging your custom to them in return for bigger wholesale discounts you can immediately pass the saving on to your customers.
3. Offer loyalty discounts.
It’s tough for small businesses to compete day after day with supermarket special offers, but loyalty schemes that rewards return customers with competitive benefits can keep business sweet without impacting your margins. For example, if customers buy a pint of milk every day Monday to Saturday, offer them Sunday’s free.
Create an incredible payment experience
When you’re the owner of a corner shop, your business is convenience. That means you should be accepting every form of payment your customers have. Gone are the days of the static, clunky till — there’s now technology that will make each purchase memorable.
The Point of Sale
Your point-of-sale (POS) system should be integrated with a payment processor and be set up take any form of payment: chip + PIN, contactless and mobile payments (like Apple Pay). When you’re creating your point-of-sale setup, aim for a system that:
Is simple and beautiful.
A well-designed corner shop counter stands out from all the noise and invites people to come and make their purchase. In a fully-stocked store, cords and bulky systems look messy, so choose a neat POS system that keeps your countertop clutter-free.
Is easy to use.
A simpler payment experience creates happier customers, gets more of them through the checkout and cuts queueing time. Choose an user-friendly card reader and make it easy for customers to enter their PIN.
Offers inventory management.
If you’re selling services such as newspaper delivery or produce that doesn’t scan, inventory management enables you to quickly add and select items on your POS menu, track what’s being sold and send low stock alerts to help you effectively manage your inventory.
Has data analytics capabilities.
Though it may sound technical, an analytical approach helps to grow your business — and it doesn’t have to be complex. A POS with integrated business analytics provides information on your most (and least) popular products, how much each of your customers is spending and who your loyal regulars are. With the ability to download this information on the go, you’ll gain sales insights to help improve your business strategy.
Helps you manage your employees.
Even without an army of staff, a system that helps you manage the one or two you do have will make life a lot easier. POS-integrated employee management helps you set levels of access, track time, check performance and even empower staff to take payments from their own mobile device.
You may find that some business customers or those buying subscription services prefer to be invoiced. A manual approach can be incredibly time-consuming, so opt for digital invoicing instead. This allows you to create, customise, send and track invoices on the move and receive payments quickly.
Reach your customer base
Resist the temptation to rely solely on your convenient location for thriving business – even small, local businesses can benefit from proactive marketing. When you find a moment between serving customers, stocking shelves and tracking your business performance put together a marketing strategy. Keep it simple and true to the nature of your business.
Direct mail is one of the most traditional forms of marketing and there’s a reason it’s stuck around for so long. Successful direct mail marketing has a clear message and simple design. People hate junk mail, so focus entirely on one key benefit or offer that will appeal to recipients. Keep the layout stripped-back too, include your logo and use brand colours that reflect the appearance of your shop.
The most modest things can be transformed into compelling content on social media. Twitter offers a fantastic opportunity to have public discussions with your customers about what’s in stock, what they’d like to see on the shelves and the general day-to-day business of your store. People love seeing this level of customer service. It makes them feel connected and others will be keen to join the community your business is building.
With Instagram, you can curate a beautiful collection of photos that reflect the diverse and colourful nature of your business — think jars of sweets, a happy customer with their morning paper or the view from your shop window on a sunny afternoon. It’s all about telling a story that people want to be part of.
Facebook provides customers with an opportunity to check-in when they visit your shop. You can also create a company Page and share entertaining content that will appear in people’s feeds throughout the day. Run competitions and advertise promotions that are exclusive to your Facebook followers. As with all social media, don’t over-market to your followers, the majority of your posts should be designed to entertain.
With any social media channel, you can tap into user generated content to increase engagement at no cost and very little effort from you. Encourage people to take selfies outside your shop with the goods they buy or using them at home. This is one of the most powerful ways to create trust and brand awareness — and all you have to do is ask customers if they’d be willing.
Everyone likes a party. They represent something particularly communal that works for a local business like a corner shop. To get the most from the time and money you put in, here are some launch party tips:
- Have clear goals. A launch party gets your business’ name out and about, but you need to consider specific metrics if you want to measure the success its success and use that insight for future events. For example, do you want a certain number of people to sign up to your email list or join your Facebook Page on the night?
- Keep it DIY. After just setting up shop, it’s unlikely you’ll be feeling flush. Skip the private hires and ask your friends and family to help out with the preparations.
- Invite the old-school way. If you’re still in the process of building a following on social media, use word-of-mouth and direct mail to invite people. In a neighbourhood setting, this grassroots approach can work wonders.
- Give people a reason to come. Whether it’s a BBQ, face painting or freebies from your store, people are more likely to come if there’s a specific pull. This is a real opportunity to show your generosity and fun side, and prove yourself as a core part of the community.