How to start a supermarket in Nigeria. In this article, we will be looking at the steps and requirements of setting up a super market in Nigeria.
I would like us to have a clear picture of what a mini supermarket is before we delve into the topic proper. A supermarket can be defined in simple terms as a large self-service retail shop where food and other house hold goods are sold.
The items mostly found in supermarkets include fresh and packaged food, snacks fruits, meat, milk and house hold goods like soap, detergents, kitchen utensils, cooking spices etc.
A mini supermarket can be seen as a small super market located in a semi urban or urban area.
It has all the attributes of a large super market but on a smaller scale. It can be sometimes categorized into the type of shops locally referred to as “corner shops” or slightly bigger than the typical corner shop.
The basic idea of a supermarket is a place where personal and house hold goods as well as food items can be purchased conveniently in retail quantities, and at an affordable price.
Practically anyone can own and operate a mini super market. A working class person in need of an extra stream of income can own one and employ a sales person to take care of the place while he or she is at work.
An unemployed person can also take this up as a sole means of livelihood if the capital is available. This could be really advantageous because such a person will have ample time to monitor the day to day running of the business and also nurture the growth of the business. Such an owner may or may not need to employ a salesperson.
Of course, full time and part time students in tertiary institutions can also get involved in this business as long as they can afford to joggle business and school or maybe hire someone to fill in for them.
As with almost every business in Nigeria, the major challenge is the issue of erratic power supply. A good generator can help to alleviate the situation but this comes with the attendant cost of purchase, fuelling and maintaining the generating plant.
Another major challenge facing business owners is lack of security. Over the years, lots of supermarkets have fallen victim to armed robberies, thefts and break-ins.
Lastly there are numerous people already involved in the same line of business which means there will be lots of competition for customers.
It will only take a business owner who is innovative, driven, committed and determined to thrive in this very lucrative but challenging line of business.
In order to be successful in this business, the following has to be taken into consideration while drawing out a viable business plan.
In setting up a business of this nature, the importance of location cannot be over emphasized. In fact apart from finance, it can be regarded as the single most important factor that will determine the success or failure of the business.
This is because the mini supermarket business will hardly have the available funds to afford an elaborate advertisement campaign hence it has to be located where it will be exposed to potential customers.
Secondly, almost everyone will love to do their shopping in a place that is easily accessible. No one will want to shop in a place where arriving or departing will be a hassle.
In summary, the best place to locate a mini super market in Nigeria is along a busy road or junction where your shop will be exposed to a high stream of consumers.
2. Goods to Concentrate On
Although most super markets normally stock a wide range of items, it is advisable to slightly tailor your stock to appeal to the locality where your mini supermarket is located.
For example, if you are located in a student environment it would pay more to invest in a bit more of stationary like books, pencils, pens, cardboard paper, markers etc., fast selling and easy to cook items like noodles and pasta, maybe a bit more of personal grooming items like deodorants, body sprays, hair products and medium to low end perfumes.
In such environment, it is better to focus on fast moving consumer goods (FMCG) because most students are relatively low income earners hence they tend to buy only what they need, and in small quantities.
In general, the nature of goods to be focused on depends largely on the locality where the shop is situated.
Any potential supermarket owner should carry out a small study on the major commodities that are consumed in the area so that they can accurately target the intended market.
3. Shop Size and Layout
The size of the shop basically determines the layout that will be adopted.
Being a small or medium scale business, you do not want to get a shop that is bigger than your need as this will cost you more than necessary in rent.
Also you do not want one that is too small else the shop will look disorganized and unappealing to customers.
The first step to picking the right size is to have a very clear picture of what is to be displayed and the scale of the shop.
All items on display should be logically arranged in such a way that it is easy for customers to easily locate their desired items. A simple clue is to place like items in the same areas.
4. Business Registration
It is important to make provision for the adequate registration of your business with all the local authorities as well as the Corporate Affairs Commission (CAC).
Also ensure that all the applicable taxes and levies are settled.
The reason for this is simply because it would be quite unhealthy for your business to be closed down for even a day not to talk of a permanent closure.
Besides, running an unregistered business is seen as engaging in illegal activities.
5. Sourcing of Stock
Have a clear plan on how you will secure a steady flow of stock at an affordable rate, to ensure that your mini supermarket never runs out of items and also secure a good profit margin.
Bulk buying of products is a good way of securing goods at good prices.
Efforts should also be made to purchase directly from the manufacturers who usually give discounts and to eliminate the added middle man cost.
Most popular online stores buys their products directly from Aliexpress in China and get it shipped to their supermarkets here in Nigeria. They make serious gains from each items since they are buying very cheap from there.
6. Power Supply
Power is a very important component in the setting up of any mini supermarket because some of the items to be sold such as meat and fruits need to be preserved in freezers, and other items such as drinks also need to be kept cool.
Apart from that, it is important for the supermarket to be kept at a temperature that is convenient and hospitable for customers.
The erratic nature of public power supply means that there will be need to purchase a generating set. When going for a generator, there is need to engage a professional to find out the expected electrical load in the supermarket.
This will help the owner to select the right capacity of generator to purchase because the price of generator increases with the capacity.
All the above factors depend solely on available capital. Anyone intending to setup a supermarket business must consider the capital involved and also have a plan to source for it. Below is a breakdown of possible start up requirements for a mini supermarket.
|Cash at Hand||120,000|
Now that you have read everything needed to start a supermarket in Nigeria, it’s time to take action to implement the ideas.
Work against procrastination and just start it. It’s something you can do on your own, but if you need a consultant to guide you, don’t hesitate to contact us.
If you have any question on this topic, let us know. We will provide answers to them as soon a possible.