If you have always dreamed and wanted to be a store owner or a businessman, this lucrative business opportunity is one of the best options you have right now in the market. This is a great startup that can allow you to understand more about the business world and society and it is rather cheaper to start than many other businesses. I would say this is a fun business too as you get to connect with different suppliers and customers, bonding some great relationships throughout the whole process. Looking into this business itself, if you are staying in an area that has many residents but not so many or any grocery store yet, this would be a great opportunity. However, if there are giant grocery stores such as AEON, Jaya Grocer, Giant and etc. you should always consider them as your greatest threat. You have to remember that the unique selling point of your store is your ease of access(location) and your competitive pricing. Nowadays, cleanliness is a really important factor too when it comes to edibles.
In this article, I will be sharing with you my observations on opening a Mini-Grocery Store in Malaysia:
- Information and Data of Mini-Grocery Store
- Pros and Cons of Mini-Grocery Store
- What are the demand and growth potential
- Startup Cost of an Esports Hub
- Potential Revenue of Esports Hub
- Potential Location of Esports Hub(in KL and Selangor)
- Monthly Cost of a Mini-Grocery Store
- Risk of a Esports Hub
- Should you just buy a business instead?
MUST READ :
All the ideas, calculations and predictions are just a mere understanding and calculations based on theories and case studies. Please do note that following exactly does not guarantee success but rather it’s just a helping hand and a guideline to success.
Our aim is always to have a faster return on investment and a high monthly income! Follow our guides based on your own choices and don’t take high risk investments if you are not capable. We all want to be successful but take things step by step. We do not recommend any businesses as we believe every business is also a high risk business.
Information and Data of Mini-Grocery Store
As prices keep increasing, one thing to worry most about in owning a grocery store is the drastic increase in price of goods from suppliers, and the increase competitiveness when all the prices are increasing. Like we mentioned above, if you are competing with giant grocery stores which are also known as supermarkets you must be prepared for a high competition in your area. Those giant companies get their stocks in bulk, have good connections with suppliers and have a huge customer base thanks to their marketing and branding strategies. Your store will need to stand out from the competition, maybe by being cleaner than them or having special foods or fruits. Being a mini-grocery store you must include groceries of all kinds ranging from:
- Fresh food
- Organic food
- Vegan food
- Gluten-free food
- Frozen foods
- Premade food
- Snacks
- Spices
There is just so much stock and space needed to pack it all in a small store.
Pros and Cons of Mini-Grocery Store
Mini-grocery stores in Malaysia, like similar establishments around the world, come with their own set of pros and cons. These can vary depending on factors such as location, management, and the specific services offered. Here are some general pros and cons:
Pros:
- Steady Demand: Grocery items are essential goods, and there is a consistent demand for them. People need to buy groceries regularly, providing a steady customer base.
- Diverse Consumer Base: Malaysia is known for its diverse population, comprising various ethnicities and cultures. A mini-grocery store can cater to the diverse needs of the community, offering a wide range of products that appeal to different preferences.
- Local Community Connection: Mini-grocery stores often become integral parts of local communities. Building strong ties with the community can lead to customer loyalty and repeat business.
- Flexibility in Product Selection: As the owner, you have the flexibility to tailor your product selection to the specific needs and preferences of your local customer base. This can include stocking local or specialty items.
- Lower Overhead Costs: Operating a smaller store usually involves lower overhead costs compared to larger supermarkets. This can contribute to higher profit margins if managed efficiently.
- Adaptability to Local Trends: Being smaller and more nimble, mini-grocery stores can quickly adapt to local market trends and preferences. This adaptability allows you to stay competitive and meet changing customer demands.
- Potential for Niche Markets: You can carve out a niche for your store by specializing in certain products or catering to a specific demographic. This can set you apart from larger competitors.
- Opportunities for Personalized Service: Smaller stores can offer a more personalized shopping experience. Building relationships with customers and providing excellent customer service can lead to positive word-of-mouth and repeat business.
- Government Support: Depending on government policies and initiatives, there may be support or incentives for small businesses, including mini-grocery stores.
Cons:
- Competition with Larger Chains: Mini-grocery stores may face tough competition from larger supermarket chains that have greater resources, buying power, and marketing capabilities.
- Thin Profit Margins: The grocery industry is known for its thin profit margins. Maintaining competitive prices while covering operating costs can be challenging, especially for smaller businesses.
- Supply Chain and Inventory Management: Managing inventory, dealing with suppliers, and ensuring a consistent supply of fresh products can be complex. Challenges in supply chain management may lead to stockouts or wastage.
- Regulatory Compliance: Adhering to regulatory requirements and obtaining the necessary licenses can be time-consuming and may involve complex processes.
- Rising Operating Costs: Over time, operating costs such as rent, utilities, and labor may increase. Small businesses may find it challenging to absorb these cost increases without raising prices, potentially impacting competitiveness.
- Limited Marketing Budget: Smaller stores often have limited budgets for marketing and advertising. It can be a challenge to compete with larger retailers in terms of promotions and advertising campaigns.
- Dependency on Local Economy: The success of a mini-grocery store is often closely tied to the local economy. Economic downturns or shifts in the local market can impact consumer spending and, consequently, the business.
- Technology and E-commerce Challenges: Larger retailers may have more resources to invest in technology and online platforms. Smaller stores might find it challenging to keep up with technological advancements and the growing trend of online grocery shopping.
- Vulnerability to External Factors: External factors such as natural disasters, political instability, or health crises (as seen with the COVID-19 pandemic) can disrupt supply chains and affect business operations.
- Limited Scalability: Mini-grocery stores may face limitations in terms of scalability compared to larger chains. Expanding the business to multiple locations might be more challenging due to financial constraints and operational complexities.
- Changing Consumer Behavior: Shifts in consumer behavior, such as increased preference for online shopping or changing dietary trends, can pose challenges for brick-and-mortar stores.
What are the demand and growth potential
The demand of mini-grocery stores solely depends on the population in a specific area, not all areas have the same demand and not all areas are suitable for mini-grocery stores. Malaysia has a growing population, but at the same time we do have pasar pagi and pasar malam where most of our population would go to buy groceries. In just recent years as we have rising giants in the supermarket industry is what drives us to buy from grocery stores instead.
As for growth potential, looking into past references in similar industries, 99-Speedmart is one of the noteworthy giants that marked a great spot in malaysia convenience stores industry. Another great example would be the new rising star “Beacon”, they are increasing in their number of stores, so this would be a great example to mark down. If you are to put in full-time and effort into this business, the growth potential is close to unlimited. Additionally, we do encourage and promote that as the owner you should also upkeep yourself in management,leadership and economic courses to improve your own knowledge when it comes to running your own business.
Startup Cost of an Mini-Grocery Store
| Item | Estimated Costs | Notes |
| Rental | RM 12,000 | Assuming 3 months deposit @RM4,000/month |
| Equipments | RM 45,000 | POS Systems, racking system, security, fridge |
| Renovation | RM 40,000 | Standard renovation including lights and deco |
| Marketing | RM 1,000 | Marketing such as instagram and ads |
| Total | RM 98,000 | This is just a prediction for a small mini-grocery |
Based on the current market price in Kuala Lumpur and Selangor area, we do not hope to open at a very expensive area and a very competitive area. Let’s take Semenyih for example, where there is a Jaya Grocer.
Where the price for an intermediate shop-lot is around RM4,000 and there is a huge competitor nearby which is Jaya Grocer. We would aim to have local-fresh food to be in our store, we would also like to have local-fresh fruit from let’s say Cameron Highland to be in our store to increase the demand. Having offers such as buy 1 free 1 or offer after 8 PM for fresh food would be ideal to drive sales.
Potential Revenue of Mini-Grocery Store
Our revenue will mostly likely only come from sales of our products and membership. Having online delivery and e-commerce shops would be ideal too. We cannot make a strong judgment for potential revenue due to the fact that the price of goods fluctuates a lot especially in times where our economy is still not so stable. However, we would like to target RM 1,700 a day or more totalling up to RM 50,000 or more a month. This is because if we sell 1Kg of chicken drumstick it would be around RM 20++, if 1 person buys 1 KG we would expect at least 50 customers to buy chicken a day and that would have already made up RM 1,000 a day. This assumption is only made because chicken is a meat that malaysians consume everyday and also based on the fact that malaysia is multiracial and there are many foods that some religions can’t therefore, chicken would be a food that all should be able to consume.
However, there is always instances where the demand of the area is not sustainable enough to have high potential revenue or even any revenue.
Potential Location of Mini-Grocery Store(in KL and Selangor)
We have only did our research on KL and Selangor.
For KL : [COMING SOON]
For Selangor : [COMING SOON]
Monthly Cost of a Mini-Grocery Store
| Item | Estimated Costs | Notes |
| Rental | RM 4,000 | At an average place at most location available |
| Staff | RM 9,000 | This is a bit tricky, but we run part-time and full-time at the same time. |
| Electricity & Water | RM 10,000 | Aircon and light/heavy duty fridge. POS systems and security systems. Air-con and circulation system. |
| Total | RM 23,000 | This is just a prediction for a small Mini-Grocery |
Heavy duty air-con and fridges are going to take up a large sum when it comes to the costs. They consume a lot of electricity and this is going to vary by the brands and also the amount of time it is open and closed. Another fact for that is that, the fridges have to be on 24/7 and there must be spare fridge to be able to store all the food in case if any of fridge spoils so the food wouldn’t spoil.
Risk of a Mini-Grocery Store
| Risk | Potential Solutions |
| Intense Competition | – Differentiation through unique products or services |
| – Customer loyalty programs | |
| – Effective marketing strategies | |
| Economic Downturn | – Diversification of product offerings |
| – Cost management and control | |
| – Emphasize value and affordability | |
| Changing Consumer Preferences | – Regular market research |
| – Flexibility in adjusting product offerings | |
| – Explore e-commerce integration | |
| Supply Chain Disruptions | – Diversify suppliers and sources |
| – Efficient inventory management systems | |
| – Continuous risk assessment | |
| Rising Operating Costs | – Improve operational efficiency |
| – Negotiate favorable terms with suppliers | |
| – Regular cost-benefit analysis | |
| Regulatory Changes | – Stay informed about regulatory changes |
| – Implement robust compliance protocols | |
| – Establish good relations with authorities | |
| Technology Disruption | – Establish an online presence |
| – Embrace technology for operations | |
| – Staff training for technology adaptation | |
| Dependence on Key Suppliers | – Cultivate strong relationships with multiple suppliers |
| – Explore alternative sources for essential products | |
| Security Concerns | – Implement security measures (surveillance systems, alarms) |
| – Staff training on security protocols | |
| Health and Safety Concerns | – Implement stringent hygiene protocols |
| – Clearly communicate safety measures to customers | |
| – Enhance online services | |
| Currency Fluctuations | – Explore hedging strategies to mitigate currency risks |
| – Consider sourcing locally to reduce exposure to currency fluctuations | |
| Environmental and Sustainability Risks | – Adopt environmentally friendly practices |
| – Communicate sustainability initiatives to customers | |
| – Engage with the local community on sustainability |
Should you just buy a business instead?
The answer is clearly no, unless the price of acquisition is higher than the startup price and the location is good. Always understand there must be a reason why the owner is selling, there is no reason to let go of a good business.
Key Takeaways:
A mini-grocery store is a great business to pursue, the monthly revenue is extraordinary when you find a great location. It is greatly scalable as you can expand to more locations and have more shops around Malaysia.
The effort to open this business is considered low. BUT every business has its own risk of losing all its money please do consider that too.
MUST READ :
All the ideas, calculations and predictions are just a mere understanding and calculations based on theories and case studies. Please do note that following exactly does not guarantee success but rather it’s just a helping hand and a guideline to success.
Our aim is always to have a faster return on investment and a high monthly income! Follow our guides based on your own choices and don’t take high risk investments if you are not capable. We all want to be successful but take things step by step. We do not recommend any businesses as we believe every business is also a high risk business.
