Small Business Essentials - Essay Example

Teacher Introduction The start of a convenience store needs a lot of consideration. For instance a lot of attention should be given to the location of the convenience store. It should be located in a place where it is within the reach of many customers so that it can get good business in the area. Many people do not like to travel a lot for buying everyday groceries, such as snacks, bread, dairy products etc. So a convenience store in the neighborhood will prove to be quite beneficial for everyone. Industry Analysis According to the Canadian Convenience Stores Association (2009), the convenience industry of Canada includes over 23,000 retail locations and, excluding automobiles, represents 8.6% of the total retail economy; it is ranked as 5th highest in its category. Every day one in every 3 stores is patronized by the Canadians. The purpose of convenience stores is to serve is the entire region of the population available but its main focus is on those customers who purchase their items besides the normal working hours. Either they get free from work at a later time or have shift working hours and it’s not possible for them to buy the stuff in the normal working hours. Many entrepreneurs try to come up with innovative ideas while they are starting up their new businesses. It should be kept in mind that to be successful for any new business, it should be innovative and attractive enough so that customers do come to check out the business value. National and Regional Economic Performance According to the Canadian Stores Association (2009), the expansionary period of the convenience stores in the years 2006‐2007, the residential development drew the retail sales in Canada. With the changing trends of the market due to inflation and other factors, it was observed that there was slowdown in the manufacturing sector which created weaker jobs and now it is expected that sales will go down to be much slower in the years 2009 and 2010. Recent Trends According to sources Canada’s population is expected to be growing by 4% between 2007 and 2011, the data researched by Canadian Convenience Stores Association (2009) depict that the rate of consumer expenditure was high in 2007 and 2008 (4.5% and 3.4, respectively), but it decreased massively in the year 2009 and will further decrease in the year 2010. Source: http://www.cstorevalue.com/id40.html Challenges to the Convenience Store Industry According to the Canadian Convenience Stores Association (2009), there are 3 main issues which the stores are facing as major challenges and they are firstly the illegal sale of tobacco, secondly the credit card transaction costs, and lastly, the over regulation phase. Convenience store robberies also are an important issue to be dealt with by the passage of time (Duffala 1976). If you were to start up again, what would you change? Couche-Tard is one of the largest convenience store operators that are operating in Canada. Analyzing his success rate, if he were to start up his business again he would know what all loopholes are that still exist in his business. He would overcome all those barriers as he has a lot of experience in the convenience store business market. The most profitable start in the launch of a convenience store is the perfect location of the store itself. The location needs considerable attention so that majority of the customers can get access to the store. Innovations are required in the designing of convenience stores and if it is required to start up the store again then the designing and placement of the stores should be given utmost importance. Competitive Advantage of convenience stores The convenience stores can get a competitive advantage if they expand their product lines on the market shelves. Internet marketing may also form a larger customer base for the convenience stores so that they can get a huge business running up. The convenience stores should consist of cheap foods of all kinds so that people of all categories find something for themselves while they visit the stores (A change of guard at Tesco: A grocer goes | The Economist) Convenience store franchise advantages Franchising in a convenience store can earn one many advantages such as the store can be located in high traffic locations which would make a lot of customers visit the store and the convenience store may be publicly known by many customers as it is located in a busy area. The sales in the convenience stores get the owner year round profits; because of its continuity in sales. The store design can be flexible if it is franchised, the graphics inserted can be eye catching, the customer base may be huge and it may also be offered customizable selection of products. Convenience store franchise disadvantages The disadvantages of franchising convenience stores may be that it may be very costly. The franchises require the franchisee to pay royalty fees or a continuous percentage of the profits they receive. The amount adds up to be very huge and not everyone can afford it. Franchisors may pose a number of operational restrictions on the franchisees. The restrictions can be on products, pricing, policies of the store and all. One major disadvantage of franchising a convenience store is that the growth of the store may be limited because they are not free to make changes in the location or in the products. They have certain instruction to abide by which does not allow them to make their own decisions freely. Usefulness of networking in small business Networking in small businesses can allow one to enhance their business generation skills. By networking in small businesses once can improve their business policies and practices, their product requirements, their employee skills and abilities to work faster and more efficiently. Networking helps to develop versatile knowledge and skills which will help the business to participate in the benchmarking practices present in the industry for that particular business. By networking in small businesses the reputation can be improved and a strong image can be built in the minds of other business customers. New ideas and leads can be developed through networking within different business sources. All in all networking in small businesses can lead to many advantages that are an ultimate necessity for successful placement in the market. References A change of guard at Tesco: A grocer goes | The Economist, Available at: http://www.economist.com/node/16326364?story_id=16326364&source=hptextfeature, Accessed on 21st June 2010. Bainbridge, Robert E. (2009) C- Store Valuations Available at: http://www.cstorevalue.com/id40.html, Accessed on 21st June 2010. Duffala, D. C. (1976). Convenience stores, armed robbery and physical environmental features. American Behavioral Scientist, 20. 227-246. Read More