Value Drivers for a Convenience Store
Convenience stores have always been a favorite for consumers in a rush. With consumer spending expected to rise in coming years, owning a convenience store could be lucrative. However, entering this industry can be risky since the market concentration is so high. According to IBIS World, two major players contribute about 70 percent of industry revenue. Although it doesn’t seem like there is much room for small businesses to thrive, with proper guidance, small businesses can do very well in this industry. Understanding key value drivers for a convenience store can help you be competitive and successful.
Peak Business Valuation, business appraiser, is here to help you increase the value of a convenience store. This is important whether you are buying, expanding, or selling a convenience store. The first step is to receive a business valuation. During a business valuation, we help you determine the fair market value of a convenience store. This will help you understand where your business is at and where it can improve.
As a professional business appraiser, Peak Business Valuation is happy to answer any questions you have about valuing a convenience store. Start by scheduling a free consultation below! See also Valuing a Convenience Store. And, Valuation Multiples for a Convenience Store.
Key Value Drivers for a Convenience Store
This article highlights several key value drivers for a convenience store. For more information, refer to “How to Value a Convenience Store.” You can understand the value of a convenience store by obtaining a business valuation. Peak Business Valuation, business appraiser, is available to help. Schedule a free consultation today!
Location
Acquiring a superior location comes with many advantages in this industry. Most customers at convenience stores are between the ages of 25 and 44. Many of these individuals live in residential areas. Therefore, convenience stores that are in or near residential areas or in high commute/commercial areas are more successful. It is also beneficial to not place your convenience store near any large competitors. Doing so can restrict your potential for growth.
By considering this value driver, you can increase the value of a convenience store. Peak Business Valuation, business appraiser, can provide more guidance during a business valuation.
Product Mix
Furthermore, having the best products makes your convenience store stand out to customers. To accomplish this, it is essential to know what products are trending. Tobacco products are responsible for a large percentage of revenue in convenience stores. Packaged beverages and healthy snacks also have a major influence on revenue. In addition, your store can provide non-edible products like chargers and phone mounts for cars, among other things.
Having a wide variety of trending products can help increase earnings. This boosts the value of a convenience store. Peak Business Valuation, business appraiser, can help you understand how the product mix of your convenience store compares to peers and industry averages. Receiving a business valuation is the best place to start.
Customer Service
Another important value driver for a convenience store is providing quality customer service. High-quality customer service increases the competitive ability of a convenience store. This includes but is not limited to helpful employees, a clean store, and quick and easy service. By improving this value driver you can increase your reputation and customer loyalty. This results in heavier foot traffic and more sales revenue. Both of these factors drive the value of a convenience store.
At Peak Business Valuation, we evaluate the strengths and weaknesses of a convenience store when valuing a convenience store. This includes the quality of customer service. By scheduling a free consultation below, we can help you get started.
Store Layout
Having a strategic store layout is appealing to customers. One method is to have the most popular items nearest to the entry. This allows customers to quickly find what they are looking for and be on their way. After all, the goal is convenience. When stocking, employees should aim to place products in a neat and organized manner. Not only does this make things easy to find, but it makes your convenience store feel cleaner.
Good product presentation will lead to a positive reputation and more sales. When customers see that your store is set up for their needs, it can help increase customer loyalty. This is one of the most important value drivers for a convenience store. Peak Business Valuation, business appraiser, can discuss more strategies to increase revenue and customer loyalty during a business valuation.
Pricing
Next, the best competitors in the convenience store industry are those that offer the best prices. Convenience stores are notorious for being more expensive. This industry competes with grocery stores, dollar stores, and other similar retailers. All of which offer reasonable prices. By offering lower prices, specials, and rewards programs, customers will value your convenience store over other options. Getting a business valuation can help you understand how your pricing strategy compares to others in the industry. Strategically pricing products can increase the value of a convenience store.
Operating Hours
Lastly, keeping a convenience store open for long hours helps provide a steady cash flow. Many value drivers for a convenience store revolve around competition. This factor is no different. Operating for long hours gives you an advantage over other retailers. The longer a convenience store is open, the more customer traffic it will get. Achieving this requires good management and employees willing to work late. Considering this and other value drivers for a convenience store will lead to growth. Peak Business Valuation, business appraiser, is happy to help you understand how your convenience store can be more competitive.
Summary
Understanding value drivers for a convenience store helps guide you on how to maximize the value of a convenience store. If you are looking to buy, expand, or sell a convenience store, it is important to get a business valuation. This will teach you about the strengths and weaknesses of your convenience store.
Peak Business Valuation, business appraiser, works with convenience stores across the country. We encourage you to receive a business valuation for a convenience store with us! Start by scheduling a free consultation today to learn more about valuing a convenience store!
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