You would need a minimum of CAD$204,230 to establish a medium-scale but standard convenience store in Canada. A convenience store is usually a small store that stocks everyday items that are used in households. It is common to find groceries, soft drinks, snack foods, candy, toiletries, tobacco products, and even call cards, newspapers, magazines et al at convenience stores. Some convenience stores even go as far as securing licenses to retail alcoholic drinks, while others secure licenses to operate a mobile money center.

Starting a convenience store business is just like starting any other retail business; it will require start-up capital (money), planning (feasibility studies, market survey, budgeting), and of course licenses and permits. In this article, we will help you with the estimated cost of starting a convenience store business in Canada.

The Estimated Cost of Starting a Convenience Store in Canada

When it comes to starting a standard convenience store in Canada, one is expected to spend the bulk of the start-up capital on leasing a facility and on groceries. In all, these are the key areas you are expected to spend your start-up capital on;

  • The Total Fee for Registering the Business in Canada – $350 (CAD)
  • Legal expenses for obtaining licenses and permits as well as the accounting services (software, P.O.S machines, and other software) – $3,300.
  • Marketing promotion expenses for the grand opening of the convenience store in Canada – $3,580.
  • Insurance (general liability, workers’ compensation, and property casualty) coverage at a total premium – $2,400.
  • The cost for payment of rent for 12 months at $1.76 per square foot in the total amount of $73,300.
  • The cost for facility remodeling (construction of racks and shelves) – $5,000.
  • Other start-up expenses include stationery ($500) and phone and utility deposits ($2,500).
  • Operational cost for the first 3 months (salaries of employees, payments of bills et al) – $20,000
  • The cost for equipping the convenience store – $25,000
  • The cost for start-up inventory – $65,000
  • Storage hardware (bins, rack, shelves, box-cases) – $3,720
  • The cost for store equipment (cash register, security, ventilation, signage) – $3,750
  • The cost for the purchase of furniture and gadgets (Computers, Printers, Telephone, TVs, Sound System, tables and chairs et al): $4,000.
  • The cost of launching a website: $600
  • The cost for our opening party: $3,000
  • Miscellaneous: $5,000

From the rough estimate listed above, you would need a minimum of two hundred and four thousand two hundred and thirty CAD ($204,230) to establish a medium-scale but standard convenience store in Canada.

Please note that this is a rough estimate and we usually advise our readers to directly contact wholesalers and suppliers of the types and brands of groceries they want to retail in their convenience store in order to get the real-time prices of these items. The truth is that, if you are a good bargainer, you can get a better deal that will help you beat down the estimated price as listed above.

Factors That Will Influence the Cost of Opening a Convenience Store in Canada

  1. The Type of the Convenience store

A major factor that will determine the overall cost of opening a convenience store in Canada is the type of convenience store you want to open. There are one-location convenience stores and chains or franchise stores. If you just want to start a convenience store that operates from one location, you are going to spend less when compared to opening chains of convenience stores at the same time.

  1. The Choice of Location

Another major factor that will determine the cost of opening a convenience store in Canada is location. In business, location is a key part of what determines the success of a business. As a matter of fact, there are business consultants and realtors who are specialized in helping people choose an ideal location for their business.

For example, renting or leasing a facility that is off the city center or off a major road will be less expensive when compared to renting or leasing a convenience store facility in a highbrow area.

  1. The Required Licenses and Permits

In Canada, you cannot open a convenience store without first applying for licenses and permits. You would need an operational license, building license, zonal permits, signage permits, and reseller permits amongst others. These licenses and permits cost money and it will influence the overall cost of opening a convenience store in Canada.

In order to get the overall cost of licensing and permits associated with opening a new convenience store in Canada, we advise that you reach out to your provincial government to find out what you need. You also need to consider council and federal requirements.

  1. The Type of Facility

The type of facility you want to operate your convenience store from is also a major factor that will determine the overall cost of opening a convenience store in Canada. As regards the facility, you have the option of renting, leasing or constructing your facility from the scratch. When renting and leasing a shop facility, you will only spend money to modify the facility to fit into the picture you have in mind, but there is a limit you can go and it will be dependent on what the landlord of the facility wants.

Let us assume that you want to construct your convenience store facility from the scratch. It means that you will buy the land or property, and construct and equip the convenience store to fit into what you have in mind. With that, you will agree that you are going to spend way more when compared to people that rent or lease a convenience store facility in a low-traffic area. This indeed will greatly influence the overall cost of opening your convenience store in Canada.

  1. The Size of the Convenience Store

Another very important factor that will determine the cost of opening a convenience store in Canada is the size of the convenience store. Of course, the larger the convenience store, the larger the budget to get it up and running.

Aside from the cost of furnishing and equipping the store facility, it will also cost you more to hire employees to man different job positions in the facility. For example, less than a handful of employees can man a convenience store that is in a 10 by 10 facility while it will take about a dozen employees to man a convenience store that is in a 20 by 20 facility.

6. The Cost for Branding, Promotion, and Marketing of the Convenience Store

The cost of branding, promoting, and marketing the convenience store is yet another key factor that will determine the overall cost of opening a convenience store in Canada. Trust me, if you want to win a fair share of the available market in your city, then you must be willing to pay for effective branding, promotion, and marketing of your new convenience store.

As a matter of fact, it is not cheap to come by an expert in branding, promotion, and marketing that will help you compete with brands that are already determining the market direction of the convenience stores industry in your city. So, if you add the cost of paying a branding and marketing expert, it will surely increase the cost of opening your convenience store.

7. The Cost for Furnishing and Equipping the Convenience Store

Another factor that will determine the cost of opening a convenience store in Canada is the cost of furnishing and equipping the store. You need to acquire items that should be found in a convenience store – items like storage hardware (bins, rack, shelves, case), shopping baskets and trolleys, counter area equipment,

Flat Screen TVs, sound system, Satellite dish and decoder, furniture (table, and stools), telephones, filing cabinets, store equipment (cash register, POS machines, security, CCTV, ventilation, signage), and security and fire alarms and prevention gadgets amongst others. All these will cost money and it will influence the overall cost of opening a convenience store in Canada.

8. The Cost for Insurance

The cost of paying for insurance policy cover is yet another important factor that will determine the overall cost of opening a convenience store in Canada. In Canada, you can’t operate a business without having some of the basic insurance policy covers that are required by the industry you want to operate from. Thus, it is imperative to create a budget for insurance policy cover and perhaps consult an insurance broker to guide you in choosing the best and most appropriate insurance policies for your convenience store.

9. The Cost for Registering the Business

The cost of registering a convenience store in Canada is yet another cost that will influence the overall cost of opening a convenience store in Canada. Although the cost of registering a business is affordable, it will no doubt add to the overall cost of opening a convenience store in Canada.

10. Source of Your Supplies

Another major factor that will determine the cost of opening a convenience store in Canada is the source of your supplies. If you get your supplies from a cheaper source, it will help bring down the cost of starting the business.

If you are able to build a robust business relationship with some of the leading producers of tobacco products, beer and wine, lottery tickets, non-alcoholic beverages, gas and automotive supplies, packaged snacks and candy, over-the-counter medication, eggs, and dairy products, dry and canned goods et al, then you would have succeeded in cutting down the cost of your supplies. As a matter of fact, you can even get your supplies on credit.

11. Cost of Recruiting and Training Your Staff

The fact that you are opening a new business means that you are expected to recruit and train your staff to conform to the kind of convenience store you want to operate. The training will help you sell the corporate culture of your organization to the new employees. As expected, it will cost you money to hire expert trainers that will help you bring your new hires up to speed and that will add to the overall cost of opening a convenience store in Canada.

12. The Cost for the Purchase and Customizing of Uniforms

Another factor that will determine the overall cost of opening a convenience store in Canada is the cost of purchasing and customizing uniforms. Employees of the convenience store need to wear uniforms when on duty, and these uniforms will cost you money which is why it must be part of your budget if you are looking towards opening a convenience store in Canada.

13. The Cost for Grand Opening of the Convenience Store 

You must not open your convenience store without first organizing an opening party to officially launch the business. This means that the cost of the grand opening of the convenience store is part of the factors that will determine the overall cost of opening a convenience store in Canada. You can choose to do a soft opening if you are operating on a low budget or you can go for a grand opening party.